NETHERLANDS Trends and Developments Contributed by: Tijmen Noordoven, Maarten Minnaard, Claire Huijts and Annemeijne Zwager, Rutgers & Posch
inform employees of these rights at least once per year. Employers may no longer impose confidentiality regarding individual pay levels on employees. Reporting obligations Large employers (those with at least 100 employees) are subject to a reporting obligation. Employers must report on the gender pay gap within their undertak - ing, covering both fixed and variable pay components. After consultation with the works council, this report must be submitted to a monitoring body to be desig - nated. The monitoring body will publish the data on a national public website. The specific details of this process will be further elaborated upon in secondary legislation. If the report reveals a pay difference that the employer cannot objectively justify, the employer must remedy this, in close co-operation with the works council, within a reasonable period. If the difference exceeds 5% within a job category and the situation is not rectified within six months, the employer must conduct a joint pay assessment. The employer must obtain the works council’s approval for the measures taken to address pay differences, whether below or above 5%. Employers with more than 100 employees must report every three years, with the first report due by 7 June 2030 at the latest. Employers with more than 250 employees must report annually, with the first report due by 7 June 2027 at the latest. Role of the works council The works council plays a significant role in the imple - mentation of the Directive. The works council is grant - ed the right to approve the pay structure, measures taken to address unjustified pay differences, and the pay assessment. Furthermore, the works council must be consulted prior to the submission of the pay report and is granted additional information rights. Where a collective bargaining agreement applies, trade unions may assume the role of the works council, provided the matter is comprehensively regulated in the collec -
has occurred. This presumption does not apply if the employer can show that non-compliance with the Directive was manifestly unintentional and of a minor nature. The Directive introduces a system of administra - tive supervision and enforcement. The Netherlands Labour Inspectorate will oversee compliance with the new pay transparency obligations. In the event of a breach, the Inspectorate may enforce compliance through a warning, an order subject to a penalty, or a fine. Outlook In April 2025, the Dutch government published the draft bill for the implementation of the Directive on pay transparency between men and women for public consultation. The draft bill provides for so-called pure implementation, meaning that the government has chosen not to provide for broader national measures than those required by the Directive. The implement - ing legislation must still be adopted by parliament and must enter into force by 7 June 2026 at the latest. From Promise to Personal Pension Pot: the Dutch Pension System in Transition On 1 July 2023, the Netherlands enacted the Future of Pensions Act ( Wet toekomst pensioenen , Wtp), marking the beginning of a fundamental reform of the Dutch occupational pension system. The Wtp shifts the focus from a promise of fixed pension benefits to a system in which each participant builds up a more personal pension capital. While the legal framework is now in place, the implementation trajectory is com - plex and fraught with practical and legal challenges. Since all transitions must be completed by 1 January 2028, time is running out and employers need to take action as soon as possible. From defined benefit to defined contribution Under the old system, participants usually accrued pension entitlements based on a defined benefit promise. Pension funds bore investment and longevity risks and were required to maintain significant buffers to safeguard nominal pension promises. By contrast, the Wtp introduces a flat rate defined contribution- based system. Each participant accrues a personal pension capital, and the resulting pension outcome
tive bargaining agreement. Other relevant elements
The Directive entails a further shift in the burden of proof. If an employer has not complied with the pay transparency obligations of the Directive, a presump - tion of pay discrimination applies. The employer must then demonstrate that no pay discrimination
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