On 7 April 2026, the Council of State (Raad van State) issued its opinion on the legislative proposal implementing the European Directive (EU) 2023/970 on pay transparency for men and women (Pay Transparency Directive). It introduces a package of measures aimed at promoting equal pay for men and women by increasing transparency around pay levels and pay structures. Key measures include enhanced pay transparency obligations, reporting requirements, and the obligation for employers to implement a system of job evaluation and job classification that ensures equal pay for equal or equivalent work.
Administrative burden
The Council of State acknowledges the importance of promoting equal pay between men and women, yet expresses concerns about the practical feasibility of the legislative proposal. In particular, the Council of State points to the substantial consequences the proposal will have for employers, including significant administrative burdens. This concern mirrors our analysis that the proposal’s practical viability would benefit from distinguishing between, on the one hand, what may reasonably be expected from employers in cases of substantial pay disparities and, on the other hand, what is proportionate where only minor pay differences exist. Such differentiation would help limit unnecessary administrative burdens.
Expectations
In addition, the Council of State cautions against overly optimistic expectations regarding the effectiveness of the legislation. It stresses that legislation alone does not automatically lead to changes in practice. A realistic explanation of the expected effectiveness and efficiency of the Dutch implementation is therefore considered essential.
National public authority for pay reports
The Directive allows Member States to designate a national public authority to prepare, to a large extent, employers’ pay reports. This option could significantly reduce the administrative burden for employers and improve the comparability of reported data. The Dutch legislator has chosen not to make use of this option. The Council of State notes that the explanatory memorandum does not sufficiently explain this choice and recommends that the government provide a clearer and more substantiated justification for not using this Member State option.
Other points of attention
The Council of State identifies uncertainties regarding the inclusion of non‑binary employees in the reporting obligations. Additionally, it stresses the importance of striking a careful balance between transparency about pay differences and the protection of personal data. The use of information traceable to individuals must be strictly limited to lawful purposes, ensuring that employees’ privacy is safeguarded as much as possible.
Implementation issues and reporting deadlines
The explanatory memorandum acknowledges that the implementation deadline of 7 June 2026 will not be met. The Council of State recommends explicitly addressing the consequences of this delay. It also notes that the Directive does not allow deviation from the prescribed deadline for the first pay transparency report for employers with 150 or more employees and advises aligning the Dutch reporting timetable accordingly.