Update on the Wage Transparency Bill⚖️

Last week, the Advisory Division of the Council of State published its opinion on the bill to implement the European Directive on pay transparency between men and women.

To recap the rationale behind this directive: to increase transparency regarding pay and pay policies, and to make unjustified pay gaps between men and women more visible and easier to address. The bill includes provisions on access to pay criteria, employees’ requests for information, and reporting obligations for employers (with more than 100 employees). So there is work to be done.

The Council of State is critical of the feasibility of the proposal, particularly for employers. The advisory opinion emphasizes that the proposal imposes significant administrative burdens and additional obligations on employers.

Furthermore, the Council of State raises questions about the chosen implementation approach. For instance, the Division asks why the option of having the government centrally handle part of the payroll reporting was not utilized, as this could have potentially reduced the administrative burden on employers. It also requests further clarification on, among other things, the unfeasible implementation deadline of June 7, 2026, and whether this will affect the first reporting dates. In addition, privacy issues remain, and the Division recommends providing clarity on whether, and if so, how employers must include the compensation of non-binary individuals when complying with the proposal’s obligations.

The Council of State’s message is clear: the government will need to provide further justification and clarification on several points of this bill before the process can move forward. This is relevant for employers because the practical impact of this law is not yet fully determined or clear in all respects.

Employers would be wise to, at a minimum:

• Adjust the hiring process where necessary: provide clarity on the salary range prior to the compensation discussion and stop asking about previous salary(ies);
• Ensure that job profiles or descriptions are up to date;
• Establish and/or review a job evaluation system. Determine which positions can be placed in the same category.
• Place the categories on the salary scale and determine the ranges for those categories.
• Check for any unjustified pay gaps between men and women in the same category and resolve these as much as possible.

Read the Council of State's opinion here. 

Do you have any questions about this bill? Please contact Dennis Oud, Tessa Sipkema, Elke Hofman-Bijvank, or Noa Bilogrevic.