Their input prompted further refinement of the legislative proposal. This is evident from the government’s legislation calendar, which published draft regulations with explanations that include the refinements – in principle, the legislative text will not be made public until the Council of State’s advice has been adopted.
Amendments based on consultation and advice
The key amendments added to the refined proposal and the Explanatory Memorandum are as follows:
- The term “pay structure” has been amended and replaced by “a job evaluation and classification system”.
- The definition of “employer” has also been changed. In principle, the proposal now aligns with contractual employer. The legislative text no longer refers to the term “enterprise” within the meaning of the Works Councils Act (Wet op de ondernemingsraden).
- The requirement that the works council must confirm the accuracy of the information provided under the reporting obligation has been removed from the legislative proposal.
- The proposal includes measures to increase transparency before commencement of employment. It clarifies that there is no obligation to include the salary in the job vacancy notice. Employers must at least provide information about the pay margin before the pay negotiations.
- Regarding the right to information, the proposal clarifies that when providing information on average pay levels for categories of workers, employers may, as much as possible, use data that must be reported.
- It also clarifies that the obligation to use personal data solely for applying the principle of equal pay applies to everyone who has access to the personal data.
- Additionally, a few changes were made regarding the position of supplied workers in the context of pay reporting. The principle that supplied workers must be included in the host company’s reports has not changed, only the manner of inclusion. If there are any supplied workers, the report must consist of two parts: one about the host company’s own workers and one about the supplied workers. The host company must base the section on supplied workers on the terms of employment shared with the supplier under the general information requirement of the Placement of Personnel by Intermediaries Act (Wet allocatie arbeidskrachten door intermediairs). The applied categories of workers performing equal work or work of equal value must be the same in both sections.
Opinion of the Council of State
The Division had various reservations about the legislative proposal and advised taking these into account before submitting the proposal to the Dutch House of Representatives. The legislative proposal will subsequently need to be approved by both the Dutch House of Representatives and the Dutch Senate.
The Council of State’s main recommendations are as follows:
- The Division recommends providing reasons for abandoning the Member State option under which national administrations would draw up pay reports based on available data, as this would reduce the administrative burden and increase comparability. It recommends further exploring ways to reduce the administrative burden.
- The Division considers a realistic overview of the measures’ efficiency and effectiveness desirable, given the substantial administrative and regulatory burden.
- The Division requests to clarify on how to deal with non-binary employees: should their remuneration be excluded, or included under either the male or female category – and if so, on what basis?
- The Division recommends strengthening the safeguards to protect personal data: the Directive provision on limited use of traceable pay data has not been implemented and the legal basis for personal data processing should be clarified.
- The Division further recommends providing clarity, as soon as possible, on which agency will be the monitoring body and whether the set preconditions for feasibility can be met in good time.
- Finally, the Division recommends adressing the consequences of exceeding the implementation deadline of 7 June 2026 and the first reporting date of 7 June 2027. The Directive offers no scope for a later date, even if these deadlines are exceeded. The Division recommends aligning the reporting date with the Directive.
In conclusion
It is advisable for employers to start considering the obligations that implementation will entail now, so that they can comply with the new requirements regarding pay transparency in good time. The Ministry of Social Affairs and Employment has commissioned a guide and checklist to help employers establish a sound job evaluation and classification system (pay structure).