The EU Pay Transparency Directive explained
Directive (EU) 2023/970 changes what you must tell employees and applicants about pay, and requires larger employers to measure and report their pay gap. Below is what changes and when.
Last updated: 10 August 2026. This page is a plain-language explanation, not legal advice. No rights can be derived from its content.
What the directive is about
Equal pay for equal work has been in European and Dutch law for decades. The problem was enforcement: an employee who suspected being underpaid could almost never prove it, because pay was invisible. Directive (EU) 2023/970 reverses that. It requires employers to make pay transparent, shifts the burden of proof onto the employer, and obliges larger organisations to measure and report their pay gap.
The directive entered into force on 6 June 2023. Member States had until 7 June 2026 to transpose it into national law.
What employers are actually required to do
Before employment starts
- Applicants receive information about the starting salary or salary range in advance, either in the vacancy text or before the interview.
- You may no longer ask applicants about their current or previous pay.
- Vacancies and job titles must be gender-neutral, and the recruitment process non-discriminatory.
During employment
- Employees gain the right to information about their own pay level and about average pay levels, broken down by sex, for colleagues doing the same work or work of equal value.
- Clauses preventing employees from discussing their pay are no longer permitted.
- You must make the criteria for pay, pay progression and promotion accessible. Those criteria must be objective and gender-neutral.
Reporting and assessment
- Employers with one hundred or more workers report on the pay gap between female and male workers, including the median, the distribution across pay quartiles, and the proportion receiving variable pay.
- Where a category of workers shows a difference of five percent or more that cannot be justified by objective, gender-neutral criteria, and that is not remedied within six months, a joint pay assessment with workers' representatives follows.
- In a dispute, the burden of proof lies with you as employer, not with the worker.
The five percent threshold is the hinge
What determines whether you have a problem is not the unadjusted pay gap, but the part you cannot objectively explain. An organisation with a ten percent unadjusted difference fully attributable to job level and tenure is fine. An organisation with a three percent difference nobody can account for is not. Which is why measuring alone is not enough: explaining and documenting is the work.
Deadlines by company size
| Number of workers | Frequency | First report |
|---|---|---|
| 250 or more | Annually | By 7 June 2027 |
| 150 to 249 | Every three years | By 7 June 2027 |
| 100 to 149 | Every three years | By 7 June 2031 |
| Fewer than 100 | No reporting obligation | Other obligations still apply |
Note the detail that is often missed: the year you report on precedes the moment you report. The data you will account for in 2027 or 2028 is being built up in your payroll system right now. Waiting until the reporting date means looking back at a year you can no longer steer.
Where the Dutch law stands
The Netherlands missed the transposition deadline of 7 June 2026. The state of play:
| 1 April 2026 | The Advisory Division of the Council of State adopts its opinion on the bill (published 7 April). |
|---|---|
| 21 May 2026 | The implementing bill (parliamentary document 36949) is submitted to the House of Representatives. |
| 7 June 2026 | The European transposition deadline passes without a Dutch act in force. |
| 1 January 2027 | Intended entry into force of the Dutch act. The European Commission has indicated it does not accept the delay. |
The bill amends, among others, the Dutch Equal Treatment of Men and Women Act. Because entry into force moves to 2027, the bill assumes a first report in 2028 covering reporting year 2027 for employers with 150 or more workers. While the bill is before parliament, those dates may still change.
Why the delay is not a reprieve
The directive has effect even without a Dutch act. The reversed burden of proof and the right to pay information are provisions workers and workers' representatives can invoke in proceedings once the transposition deadline has passed. And the delay changes nothing about the reporting year: the 2027 figures accumulate in your records whether the law starts in January or in June.
What you can do now
- Bring your pay data together. In most organisations salary, bonus, allowances and job information sit in different systems. Merging them takes longer than the analysis itself.
- Decide what counts as work of equal value. Without a defensible job classification, any outcome is contestable. This is the step that takes longest.
- Measure the gap and explain it. See what the difference is and which part can be objectively substantiated.
- Document the method. The answer is not the only thing that counts, so is the traceability of the route to it.
- Fix what can be fixed, well before the reporting date. The six-month window after a finding is short.
The first four steps are exactly what Equal Pay Monitor does. The Approach page shows how the engagement runs, and the sample report shows what the result looks like.