What does pay transparency mean for your organisation?

Wage transparency on the way: this is what the new EU directive means for employers

Introduction

The European Union is pushing for more equality in the workplace. An important step in that direction is the introduction of Directive (EU) 2023/970, which revolves around pay transparency. The aim: to combat unequal pay and promote fairer working conditions.

In the Netherlands, this European directive is currently being transposed into national legislation via a draft bill. If adopted, this proposal will bring significant changes for employers. They will then be obliged to disclose salaries, remuneration policy and pay differences between employees.

For many organisations, this means a drastic change. Not only will you be obliged to be transparent about salary information, you must also be able to clearly explain why any pay differences exist.

At Marxman Lawyers, we understand that this raises many questions. That is why we not only support organisations legally, but also actively think along about the practical and human impact. We look at the consequences for your employees, internal communication and corporate culture.

What specifically will change?

The current draft bill contains a number of obligations to help employers identify and address inequality. The main changes are:

• Transparency in job postings Employers will be obliged to include the starting salary or corresponding salary range in their job postings. This will help potential candidates know what to expect.
• Right to information Employees will have the right to ask for insight into the salary levels of colleagues with similar positions. This strengthens the ability to discuss unequal treatment.
• Reporting obligation for large employers Organisations with more than 100 employees will be obliged to report periodically on pay differences between male and female employees. This will make structural inequality visible.

These measures not only require administrative preparation, but also have an impact on the dynamics within your organisation. If unexplained pay differences come to light, this can lead to unrest. Employees may question the remuneration policy or the lack of transparency. Adequate preparation is therefore essential.

Wage transparency requires diligence

While salary transparency sounds simple in theory, in practice it touches on sensitive issues such as appreciation, trust and fairness. It touches the heart of your organisation: your people.

Companies that do not prepare sufficiently risk tensions and ambiguity within teams. That is why we recommend getting started now with the following steps:

• Map your pay structure Make sure you know exactly how the current pay structure is structured and why certain employees earn more or less. Consider experience, education, performance or other objective factors.
• Communicate openly and clearly Explain clearly to employees how the remuneration structure was established and on what basis choices were made. Transparency starts with clear communication.
• Make a future-proof plan Prepare for information requests or mandatory pay gap reports. This will prevent you from having to act under pressure later.

By starting early, you will maintain peace and confidence within your organisation.

Marxman Advocaten looks beyond the rules

At Marxman Lawyers, we believe that legal changes are not isolated. We look not only at the law, but also at the broader context in which your organisation operates. Think about internal communication, human resources policy, culture and cooperation.

We guide organisations step by step through this change. From analysing the pay structure to drafting policies and communication plans, we offer tailor-made support.

Want to be well prepared?

Wondering how best to prepare for these new obligations? Then contact our Labour & Organisation team. We will be happy to help you with legal advice, support and practical solutions.

Want to know more?

Want to read the full text of the directive? Then view the official text of Directive (EU) 2023/970 here.