News detail

Starting January 1, 2027, employers are expected to face new rules regarding pay transparency. The Dutch Act implementing the EU Pay Transparency Directive aims to provide more openness about salaries and contribute to narrowing the gender pay gap. The bill is currently before the House of Representatives (Tweede Kamer). Therefore, the target implementation date of January 1, 2027, is not yet final.

What is going to change?

The new law affects various aspects of employment, from recruitment and selection to the way salaries are determined.

Employers will, among other things, have to:

Provide more salary information during job applications. Candidates will receive more clarity about the salary or salary range of a position.
No longer ask candidates about their previous salary. A salary from a previous job may no longer be used as a starting point for a new salary.
Use objective criteria for salary determination. Employers must be able to explain why someone earns a specific salary.
Give employees more information about remuneration. Employees will gain more rights to gain insight into how salaries are determined within an organization.
Report pay gaps. Employers with 100 or more employees will face an additional reporting obligation.

As a result, it becomes more important that salary decisions are not only clear to HR and management, but also easily explainable to employees and applicants.

Why is this law coming?

The gender pay gap still exists. According to recent figures in the Netherlands, the average hourly wage for women in the business sector is 14.5% lower than that of men. Part of this can be explained by factors such as work experience, job role, or education. However, not every difference is self-evident or easy to explain.

This difference does not always arise from conscious discrimination. Previous salary agreements, negotiation differences, and unclear remuneration structures can also play a role. Even so, there remains a group of people who do not always know what their colleagues earn.

The European Commission wants to change this by having employers provide more clarity about their remuneration policy. This is not about making individual salaries public, but rather about insight into how salaries are determined and what factors influence their development. The underlying thought is simple:

"Transparency makes unequal pay visible. What is visible can be discussed and resolved."

This also yields immediate benefits for employers. An open and fair remuneration system ensures:

Greater mutual trust on the work floor;
A more attractive and stronger employer brand;
Clearly and logically substantiated salaries;
A minimal chance of legal conflicts;
An edge in recruiting talent in a tight market.

Reporting obligation for the Pay Transparency Act

Almost all employers will face new, strict rules. You will soon need to be very open about pay when searching for and hiring staff. This is what changes:

There will be a salary range for a position, based on qualifications and experience rather than gender.
It will be clear to everyone how you can earn more.
Applicants will know the salary range in advance.
Employees have the right to ask what colleagues earn.

The new rules regarding transparency in recruitment, selection, and remuneration will in principle affect a broad group of employers. There are additional obligations for larger organizations. For example, employers with 100 or more employees will face a periodic reporting obligation regarding pay gaps between men and women. Employers are obligated to take action if there is an unexplained difference in salary between employees.

Organization size -> Expected reporting obligation

Fewer than 100 employees -> No legal reporting obligation.

100 up to 249 employees -> Report every 3 years.

250 or more employees -> Report annually.

How do you prepare your company?

Do not wait until the new rules are official. Adjusting your pay policy takes a lot of time. You can already take these 5 steps now:

List all positions and salaries: Check if there are major differences and why that is the case.
Check the functions: Ensure that jobs that look alike are also evaluated in the same way.
Make clear rules: Write down why someone receives a certain salary and how you can earn more.
Adapt the application process: Ensure recruiters no longer ask candidates about their old salary.
Help your managers and HR: Train them on how to neatly explain how salaries were chosen.

Need help?

Do you have questions about the impact of the Pay Transparency Act or would you like help with preparation? Feel free to contact us; we are ready to support you!