Background and Objectives

The primary objective of the Directive is to promote equal pay between men and women by introducing concrete measures to increase pay transparency. The Directive sets binding obligations and minimum standards designed to strengthen the enforcement of the equal pay principle through improved transparency and accountability mechanisms. For further information on the Directive, we refer to our blog of March 2024, which provides for an overview of the background of the Directive as well as the obligations arising from the Directive.

In the explanatory memorandum accompanying the Dutch implementation proposal, the Dutch legislator explains that despite progress in women’s labour market participation and financial independence, significant inequalities still exist in the Netherlands. Persistent gender pay gaps and pension disparities illustrate this. The legislative proposal aims to make such differences more visible and easier to address, by increasing transparency around pay structures, empowering employees to claim their right to equal pay, and by encouraging objective pay practices and good employer conduct through public accountability.

Dutch method of implementation

The Dutch legislator opted for “pure implementation” (zuivere implementatie) of the Directive, meaning that the legislative proposal aims to adhere as closely as possible to the literal provisions of the Directive and includes only what is strictly necessary to ensure compliance. As such, there is no broader national interpretation beyond the Directive’s scope.

The Directive will be implemented through amendments to several existing Dutch Acts, including:

  • the Equal Treatment of Men and Women Act (Wet gelijke behandeling van mannen en vrouwen, Wgbmv);
  • the Works Councils Act (Wet op de ondernemingsraden, WOR), and
  • the Placement of Personnel by Intermediaries Act (Wet allocatie arbeidskrachten door intermediairs, Waadi).

Implementation of the Directive will primarily take place through the Wgbmv, as it already governs equal treatment in employment and applies to all workers, regardless of contract type. Amendments to the WOR and Waadi are intended to clarify the responsibilities of works councils and to address the specific position of temporary agency workers.

Key elements proposal and employer obligations

Scope

In accordance with the Directive, the legislative proposal has a wide scope and applies to employers in both the public and private sector, including temporary employment agencies (uitzendbureaus), and covers all employees, including (i) part-time employees, (ii) fixed-term employees, (iii) employees in managerial roles, and (iv) temporary agency workers (uitzendkrachten).

Key obligations / measures

The main obligations for all employers involve: (i) establishing objective pay structures, and (ii) complying with the transparency obligations. Additional obligations apply to employers with more than 100 employees, namely (i) complying with the pay reporting obligations, and (ii) complying with the pay evaluation obligations. Each of these obligations are further discussed below.

Role of the works council

As already follows from the foregoing, the Directive includes several provisions that require the active involvement of employee representatives in shaping company-level policies and decisions. In the Dutch implementation proposal, this responsibility is primarily assigned to the works council, which is mandatory for companies with 50 or more employees.

Some employers may not have a works council, despite exceeding the threshold (for example, because the employees are not interested in forming one when this is proposed by the employer). In that regard, it is important to note that the explanatory memorandum explicitly states that such companies are generally not in compliance with the WOR and therefore cannot fulfil the obligations under the Directive / Dutch implementation that depend on involvement of the required employee representation.

The memorandum further clarifies that no alternative arrangements will be made for these non-compliant companies. The reasoning is that allowing such exceptions would undermine the integrity of the employee participation framework and set a negative precedent for the implementation of future EU directives. As such, the current legislative proposal clearly implies that for companies with 50 employees or more, the existence of a works council is a prerequisite for compliance with certain obligations under this regulation.

Smaller companies may instead have an employee representative body, which also qualifies as an employee representative under the Directive. However, if no such body exists in smaller companies, it is explicitly stated that they can still comply with the obligations outlined in the legislative proposal.

Enforcement

Civil law

The aim of the legislative changes is to make access to justice as easy as possible and thereby promote compliance with the principle of equal pay. Individual employees can file a wage claim in court if they believe that pay discrimination applies. In this regard it is important to note that the legislative proposal introduces a shift in the burden of proof for employers who fail to meet pay transparency and/or reporting obligations, meaning that if employers fail to meet these requirements, it will trigger a presumption of pay discrimination in court proceedings. This again illustrates the importance of having a works council when meeting the threshold under the WOR. As mentioned above, a company without a works council while being obliged to have one cannot fully fulfil the obligations under the Directive / Dutch implementation, resulting in a shift in the burden of proof in favor of the employee.

Additionally, a change is introduced, whereby, contrary to the general rule in legal proceedings, the court may order the employer to cover the legal costs if the court finds that the employee had valid reasons for filing the claim and deems this cost allocation appropriate, even if the employee ultimately loses the case. The aim is to keep legal proceedings as accessible as possible for employees.

Administrative law

A specific body will be designated with the task of monitoring and raising awareness. The responsibility for this role is assigned to the Dutch Labour Inspectorate (Arbeidsinspectie).

In addition to its monitoring duties, the Dutch Labour Inspectorate will also have enforcement powers. These powers come into play when an employer fails to comply with a specific obligation and when such non-compliance is designated as a violation. Non-compliance with the following obligations will allow for administrative penalties (with a maximum of EUR 10,300 (2024 figures)):

  • Absence of pay structures;
  • Failure to comply with the right to information of employees; and
  • Failure to report or conduct a pay evaluation.

Next steps

The legislative proposal is currently open for internet consultation until 7 May 2025. Based on the feedback received, changes might still be made to the current proposal. It is expected that the legislative proposal will be submitted to the House of Representatives in the third quarter of 2025. The legislative proposal will then have to be considered and adopted by the House of Representatives and subsequently by the Senate.

The final Dutch implementation legislation is expected to enter into force with immediate effect from 7 June 2026. However, the reporting obligations will be introduced in phases, depending on the size of the employer, as outlined in the table above under 'pay reporting obligations'.

Although the final legislation may differ slightly from the current proposal, we deem it advisable for employers to already start preparing by:

  • reviewing and, if necessary, updating pay structures (in consultation with the works council);
  • setting up systems to be able to provide information that may be requested by the employees, or that is necessary for pay reporting;
  • assessing any pay differences to be able to resolve it prior to the first report is due in 2027; and
  • establishing a works council if required under the WOR in order to be able to fulfil the obligations under the new legislation.

We will continue to closely monitor developments concerning the legislative proposal. Should you have any questions following this news blog, please do not hesitate to contact us. We are happy to assist you.