European Pay Transparency Directive: Implementation Challenges, Status, and Risks

All EU member states must transpose (or implement) European Directive (EU) 2023/970 on pay transparency (hereafter referred to as the “Directive”) into national legislation by June 2026 at the latest. Many countries already have rules regarding equal pay, gender-neutral job evaluation and classification systems, and reporting obligations, but the Directive requires additional steps and a more uniform approach.

Transposition is progressing slowly and unevenly across Europe, with varying reasons and challenges in each country. This article discusses why transposition is delayed in different countries (with a focus on Belgium, the Netherlands, and Norway), the current status of this process, and the risks associated with late transposition.

Why is transposition taking so long?

Belgium

According to the Organization for Economic Co-Operation and Development, Belgium is among the countries with the smallest gender pay gap in Europe.¹ The principle of equal pay for all wage components, including classification systems, is firmly anchored in Belgian legislation, and reporting obligations already exist. Policymakers and social partners (i.e., employer representatives and trade unions) believe Belgium already scores well on pay transparency, which limits the sense of urgency.

Other issues often take priority. The federal coalition agreement still contains labor law measures that need to be enacted, while sectoral negotiations for 2025-2026 are in full swing.

There is also concern about additional administrative burdens, especially among employers and sector organizations, which warn against overregulation. Workable solutions are being sought, but this slows down the process.

A key feature of Belgian labor law—and possibly the main cause of delay—is the “social dialogue” model. Many employment conditions are not only laid down in national legislation but also in collective labor agreements (CLAs). These CLAs can apply nationally but are often sector-specific (e.g., chemicals, technology, logistics) or even at the company level. New rules must therefore be incorporated into various legal sources and aligned with each other. This consultation between the government and social partners ensures broad support for new rules, but the process takes considerable time because decisions are only made once a broad compromise is reached.

The Netherlands 

In September, the Dutch government announced that the country will not meet the June 2026 deadline for implementing the Directive. It clarified that one of the main reasons for the delay is the need for more time to shape national regulations and their implementation in such a way that employers can fulfill their obligations effectively and with as little administrative burden as possible.

While the Dutch government did not specify the other reasons for this delay, it is evident that the national elections of October 2025, following the collapse of the Dutch government in June 2025, are a contributing factor.

Besides, the implementation of the Directive is just one of several key employment law matters currently being addressed by the Ministry of Social Affairs and Employment. Other urgent issues include the classification of employment relationships, with several legislative proposals currently under discussion.

Norway 

Norway is part of the European Economic Area (EEA), but not of the EU, together with Iceland, Liechtenstein, and Switzerland. The Pay Transparency Directive has so far not been formally incorporated into the EEA Agreement. The Norwegian Ministry is currently waiting for this to happen and will not issue a consultation paper on implementation before the matter is settled at the EEA level.

What is the current status of implementation?

Progress varies greatly by member state. Some countries have already started concrete projects and adjustments, while others are still in the preparatory phase.

Belgium

Although little seems to be happening on the surface, preparations for transposition are underway behind the scenes. The core challenge is to reconcile the European ambitions for pay transparency with the Belgian reality of social dialogue, multi-level regulation, and administrative feasibility. To implement Article 4.2 of the Directive, the Belgian federal government has launched the BE-MAGIC project (Belgium – Modernisation and Adaptation of Gender-neutral Instruments of Classification). This initiative develops gender-neutral job classifications and analysis tools. Although the project initially focuses on job classifications and evaluations in sectoral CLAs, individual companies can also use the developed tools when drafting or revising their pay structures. As part of the project, the applicable legal framework and the implications of the Pay Transparency Directive for developing new tools and methodologies have already been examined. Currently, existing sectoral job classification and evaluation systems, as well as pay-related benefits, are being analyzed for gender neutrality to comply with the Directive.

In addition, the social partners are examining what adjustments are needed to the existing national CLA No. 25 (equal pay for male and female employees) and CLA No. 38 (recruitment and selection). The legislature will mainly focus on making existing reporting obligations compliant with the Directive and developing a specific arrangement for the public sector.

The Netherlands

The Dutch government has announced that the new target date for the legislation to come into force is January 1, 2027. To this end, the Dutch government intends to send the legislative proposal to the Council of State for its opinion before the end of 2025, after which the proposal will be submitted to the House of Representatives and then the Senate for discussion.

The new target date of January 1, 2027 means that the reporting obligation for employers with 150 or more employees will apply for the first time in the 2027 calendar year, instead of the 2026 calendar year. The date by which the other employers subject to the reporting obligation (those with 100 to 150 employees) must report will be implemented in accordance with the Directive.

Meanwhile, members of the European Parliament have raised concerns about this delay. MEPs Kira Marie Peter-Hansen and Evelyn Regner have sent a letter to the European Commission requesting clarification on the planned response to the Dutch government’s postponement. The Commission’s reaction could include formal steps to ensure compliance with the Directive, such as initiating an infringement procedure that could ultimately lead to the imposition of financial sanctions.

Norway 

At the EEA level, a draft Joint Committee Decision is under consideration, but several steps remain before the Directive becomes part of the EEA framework. 

Since the Directive has not yet been incorporated, Norway currently has no deadline to ensure that national rules comply with it. For now, the provisions of the Equality and Anti-Discrimination Act continue to apply, including the existing rules on equal pay for equal work and reporting obligations on gender equality. 

For a current overview of the implementation status in all EU member states, request access to the Littler Tracker.

What are the risks of late transposition?

It is unlikely that the transposition deadline will be met in all European countries.

Delayed transposition of the Directive poses significant risks for companies. Without sufficient preparation time, companies will be limited in their ability to adapt internal processes and pay structures, as well as to set up the necessary reporting systems. This can lead to legal uncertainty, operational disruptions, and an increased risk of errors in complying with new obligations. Inadequate preparation can also lead to unrest among employees and discussions about pay differences, especially when transparency obligations are introduced abruptly.

To mitigate these risks, it is important that companies begin to analyze and prepare their internal processes and pay structures now for the upcoming obligations.

Conclusion

The Directive prompts all member states to take action, but the national implementation and pace of progress vary greatly.

The coming year will be decisive for how pay transparency is put into practice in Europe. By anticipating now and preparing well, companies can not only comply with the new regulations but also contribute to a fairer and more transparent pay policy within their organization.