At PWN Netherlands, Financial Intelligence is one of our three core pillars because we believe financial confidence is fundamental to professional growth. Understanding the policies, legislation, and workplace practices that influence pay equity empowers professionals to advocate for their worth and make informed career decisions.
That's why we're sharing this important update on the EU Pay Transparency Directive. While much of the responsibility sits with employers, these changes also strengthen employees' rights and represent an important step towards greater transparency and fairness in the workplace.
This is good news when it comes to the fight to close the gender pay gap between men and women in Europe.
The EU Pay Transparency Directive (EU) 2023/970 (the Directive) was agreed upon in 2023 and has come into effect as of June 2026.
The EU pay transparency rules will, according to the EU Commission: “increase pay transparency, strengthen enforcement of the principle of equal pay between women and men, and improve access to justice for victims of pay discrimination” (source).
Currently the unadjusted gender pay gap in the EU stands at 11.1% (source). This is defined as the average difference in pay between male and female employees expressed as a percentage of the average gross hourly earnings of male employees (source).
The Directive’s intention is to reduce the gender pay gap. It focuses mainly on:
- transparency obligations
- pay reporting
- pay evaluation
- and the creation of objective pay structures.
What does it mean for organisations and employees?
- Employers must ensure that job vacancies and titles are gender-neutral and non-discrimination is applied throughout the complete recruitment process
- Transparency on starting salaries or salary range during application process must be implemented
- Asking about previous salary is not permitted anymore
- Pay reporting and pay evaluation obligations for employers with 100 employees or more
- Employees may request information on their remuneration and average pay levels performing the same or equivalent work
Status of implementation in the Netherlands
Each EU Member State is required to implement the Directive into their own local legislation by 7 June 2026. The Netherlands, however, has postponed the Dutch implementation law (Wet implementatie Richtlijn loontransparantie mannen en vrouwen) until 1 January 2027.
The European Commission did not agree with the Dutch postponement of the implementation of the Directive and stressed the importance of pay transparency for achieving equal pay between genders. Regardless of the implementation into local law, companies should have already prepared for the new rules and be ready to comply with them.
Summary
The introduction of the EU Pay Transparency Directive marks significant progress towards closing the gender pay gap across Europe. Although the Netherlands has delayed implementation until January 2027, organisations should already be preparing for the new requirements, and professionals should be aware of the rights these changes will bring.
By understanding developments such as these, we can all become more informed advocates for fair pay, transparent workplaces, and equal opportunities - helping create environments where everyone can thrive and be recognised for the value they bring.