Background

On 19 January 2026, the demissionary Minister of Social Affairs and Employment submitted the legislative proposal implementing the EU Pay Transparency Directive 2023/970 (the Directive) for advice to the Council of State. The Council of State issued its advice on the legislative proposal on 1 April 2026, which was published on the website of the Council of State on 7 April 2026. 

For further background information on the Directive and prior developments regarding the Dutch implementation proposal, we refer to our earlier news articles: Pay Transparency Directive adopted by the European Union, Dutch implementation proposal of the European Pay Transparency Directive, Update on Dutch implementation of Pay Transparency Directive, and Dutch implementation proposal of the EU Pay Transparency Directive amended.

Advisory opinion of the Council of State

Within the Dutch legislative process, the Council of State has an advisory role. It issues opinions on draft legislation, focussing on, among other things, the legal basis and the practical enforceability of the proposed legislation. Its advice is not binding on the government or parliament.

In its advice on the draft legislation implementing the EU Pay Transparency Directive, the Council of State identifies a number of matters which, in its view, call for either amendments to the draft legislation or further clarification in the explanatory memorandum. Below, we discuss four key issues identified in the Council of State’s advice.

(i) Administrative burden

The Council of State notes that the proposed measures aimed at mitigating the pay gap between men and women will have substantial implications for employers and will result in an increase of administrative burden and regulatory pressure. It remains unclear how it will be determined whether the intended results have been achieved. The Council of State emphasises that it is important to address this. In this regard, a realistic explanation in the explanatory memorandum regarding the effectiveness and efficiency of the Dutch implementation of the measures is desirable.

In this context, the Council of State also considers that the Labour Inspectorate’s oversight will be primarily administrative in nature, as the Labour Inspectorate can only verify whether the employer’s mandatory wage reports are present, not whether they are accurate. The Directive provides for the option of having the vast majority of employers’ wage reports drawn up by a national government service. According to the Council of State, this option could reduce the administrative burden for employers and enhance comparability of the data. The Council of State recommends explaining more clearly in the explanatory memorandum why this option is not being utilised. It also advises to investigate whether it might still be feasible to reduce the administrative burden on employers, potentially in the long term.

(ii) Implementation deadline and first pay reporting date

The Council of State draws attention to the fact that the Directive’s implementation deadline will be missed. The explanatory memorandum does not sufficiently address the potential consequences of exceeding the implementation deadline and the potential risks to the State and the parties concerned.

In addition, the Council of State points out that the explanatory memorandum stipulates that, in deviation from the Directive, employers with 150 employees or more must submit their first pay report ultimately on 7 June 2028. As the Directive leaves no room for deviation from the deadline, the Council of State recommends aligning the deadline for the first wage report with the date included in the Directive (i.e. 7 June 2027).

(iii) Gender registration

The Council of State addresses issues relating to gender registration. The explanatory memorandum provides that in order to comply with the obligations under the draft legislation, employers must register the gender of employees (i.e. male or female), but do not have to report on non-binary persons. The Council of State points out that this does not make clear whether employers can completely disregard the compensation of non-binary individuals when calculating average wage levels and preparing wage reports, or whether the compensation of non-binary individuals must be included in some other way. The Council of State therefore recommends elaborating on this matter in the explanatory memorandum.

(iv) Personal data

The Council of State points to the tension between the protection of personal data and the aim of transparency regarding pay differences. Some degree of openness about remuneration is unavoidable to achieve the purpose of the Directive, but this openness should be kept as limited as possible. Where pay data can be traced back to individuals, such data should therefore be processed only within the scope permitted by the Directive.

Since no use has been made of the option under the Directive to grant access to identifiable pay data only to employee representatives or the Labour Inspectorate, the Council of State considers it important that the explanatory memorandum further addresses how employers can effectively restrict the use of such information by recipients to the exercise of the right to equal pay.

Next steps

The advice of the Council of State does not alter the substantive obligations arising from the draft legislation proposal. This was also in line with expectations, as the draft legislation is based on the Directive, which allows for only very limited deviations.

The next step in the legislative process will be the preparation by the Minister of an ‘Additional Report’ (Nader Rapport), in which the advice of the Council of State will be addressed and any amendments to the proposal will be set out. Subsequently, the draft legislation, together with the advice and the ‘Additional Report’, will be submitted to the House of Representatives. The subsequent parliamentary process may lead to further changes, including amendments to the legislative proposal during the legislative debate. We will continue to monitor developments closely and provide updates as soon as further guidance becomes available.

In the meantime, employers are advised to prepare for the upcoming pay transparency obligations. In this regard, we would like to note that the European Commission, in cooperation with the European Institute for Gender Equality, has recently published guidelines on gender‑neutral job evaluation and classification, including a toolkit which aims to provide guidance, recommendations and examples to support compliance with the Directive (see EU-wide guidelines on gender-neutral job evaluation and classification: Step-by-step toolkit).

Contact us

Should you have any questions, please do not hesitate to contact us.

This news article only discussed the status of the Dutch implementation process. For information regarding the status of the implementation of the Directive in Belgium and Luxembourg, please contact our Employment & Benefits colleagues in those countries.