Impending Arrival of the Pay Transparency Act in the Netherlands: Five Practical Steps for Employers

The Dutch law implementing the European Pay Transparency Directive (the “Directive”) is working its way through the legislative process. Once passed, as drafted, it will take effect on January 1, 2027. Employers will then face new obligations regarding equal pay, pay transparency, and—just as important—the justification of their remuneration policies.

To support employers in this regard, the Verwey-Jonker Institute has published a practical guide on establishing an objective and gender-neutral pay structure (the “Guide”). 

Although the Guide does not have legal status, it does provide an initial specific indication of what will shortly be expected of Dutch employers.

1. Start with a critical job analysis 

An objective pay structure starts with clear job descriptions. In practice, jobs often evolve over time or are inadequately defined. As a result, important tasks or responsibilities may have been overlooked, and jobs may have been incorrectly evaluated.

Employers would therefore be wise to verify whether all job descriptions (still) align with actual duties.

2. Review the job evaluation

According to the Guide, jobs can be evaluated in three ways: 

• through a recognized job evaluation system, 
• based on collective bargaining agreement reference jobs, or 
• using a company's own analytical scoring system. 

Regardless of which method is chosen, the evaluation must be based on at least four objective criteria: skills, effort, responsibility, and working conditions. 

A periodic review of the results (for internal use) may help to identify unintended gender bias.

3. Remuneration policy: clearly document differences

For equivalent jobs, the Guide offers practical tips for establishing pay scales.

In this regard, pay attention to job families within pay scales where equivalent jobs are remunerated differently, without this being justifiable on the basis of gender-neutral and objective remuneration criteria.

Not every pay gap is prohibited. Differences may be justified, for example, based on demonstrable, relevant work experience, objectively measured performance, or a temporary labor shortage allowance.

The key point, however, is that such differences (i) are established in advance, (ii) are transparent, and (iii) are applied consistently. Under the new regulations, it will become increasingly difficult to justify a pay gap after the fact.

4. Start thinking about privacy now

Pay transparency also raises privacy concerns—an aspect that is sometimes overlooked in the discussion.

Employers will have to analyze more remuneration data and—for larger organizations—will also have to report on this. However, this does not mean that individual salaries will be disclosed. The Directive expressly maintains the protection of personal data.

This calls for carefully designed processes. For example:

• use aggregated or pseudonymized data whenever possible; 
• restrict access to salary information to employees who need it; 
• clearly define the purpose of the processing; 
• check whether the privacy policy and processing register comply with the new requirements; 
• get HR, Legal, Privacy, and—where necessary—the Data Protection Officer as well as the works council involved in a timely manner. 

As this covers sensitive personal data,¹ privacy deserves a clear place in the implementation project. 

5. Do not wait until 2027

A careful overall compliance process is  important. Consider establishing a well-balanced evaluation committee, providing training in recognizing unconscious bias, and conducting periodic reviews of the pay structure.

Many organizations may see their biggest challenge not necessarily in adjusting individual salaries, but in being able to explain why jobs are equivalent, why pay differences exist, and why they are objectively justified.

Conclusion

The Guide is not binding, but it does provide some guidance. Employers that update their job descriptions, review their job evaluations, document objective remuneration criteria, and establish privacy-compliant processes in 2026 will be better prepared for the implementation of the Directive in 2027.