Implementation of the Pay Transparency Directive: the Council of State’s opinion

On 7 April 2026, the Council of State issued an opinion on the bill to implement the European Pay Transparency Directive (Directive (EU) 2023/970), which aims to strengthen the rules on equal pay for men and women through transparency obligations and enforcement measures. For further background on this bill, see the article PTD implementation – Netherlands update. Below are the key points from the Council of State’s advice.

Administrative burden and uncertain impact
The Council endorses the objective – reducing pay gaps – but has reservations about the means. Obligations such as pay reporting, transparency towards job applicants and employees, and the (re)design of job evaluation systems entail considerable administrative burdens and regulatory pressure. At the same time, it is unclear how the effectiveness of these measures will be assessed and to what extent they will actually contribute to reducing pay gaps. Expectations should therefore not be too high; legislation alone does not change practice.

The Labour Inspectorate points out that the directive also offers the possibility of having pay reports largely drawn up by a national government agency, which could reduce burdens and improve comparability. However, the government currently considers this unfeasible due to insufficient available data.

Supervision, enforcement and implementation     
The Council also has concerns regarding enforceability. The Labour Inspectorate’s supervision will likely be limited to checking whether a report has been drawn up, not whether its content is accurate. For employers, the emphasis is therefore on formal compliance, whilst employees may dispute the content.

The bill introduces a monitoring body to collect and publish wage reports, likely an implementing agency of the Ministry of Social Affairs and Employment. The Council believes that clarity on this matter is needed sooner rather than later and that, if this task falls to the Ministry, it must be explicitly laid down in law. There is also uncertainty regarding feasibility and preconditions.

Implementation
The directive must be implemented by 7 June 2026 at the latest, but this appears unfeasible; the intended date of entry into force is 1 January 2027. The Council notes that the consequences of this delay have not been sufficiently elaborated and must therefore be clarified.

Furthermore, the proposal deviates by postponing the first pay reporting requirement for employers with ≥150 employees to 7 June 2028 instead of 7 June 2027. According to the Council, the Directive does not allow for this, and this could undermine the effectiveness of EU law. The Council therefore recommends aligning the reporting deadline with the Directive. It is not clear how this would work in practice. If this recommendation were to be adopted by the legislator, it would lead to a remarkable situation: the implementing legislation will not yet be in force in 2026, but a pay report for 2026 must be submitted in 2027. In our view, the legislator would be wise in that case to also stipulate that no penalties may be imposed for this first report.

Privacy and pay data
The Directive requires the recording of gender, but the explanatory notes are unclear on how to deal with non-binary employees; the Council recommends clarifying this. There is also a tension between transparency and privacy, as pay information can be traced back to individuals and may only be used to a limited extent. Employers must therefore not only comply with transparency obligations, but also carefully organise their data processing and internal structure.

Conclusion
The implementation of the Directive is complex. Although the objective is widely endorsed, there are doubts regarding feasibility, administrative burdens and effectiveness. The deviation from the directive’s implementation deadline and limited enforceability also raise questions. We cannot therefore emphasise enough that employers would be well advised to prepare in good time, paying attention to pay data, job evaluation and privacy. We are, of course, happy to assist with this.