Pay transparency legislation on the way: is your organization ready for 2027?

What does the new pay transparency law involve?

The European Pay Transparency Directive has been in force since 2023. The Netherlands is now developing its own legislation that turns this directive into practical rules. The government is aiming for introduction on January 1, 2027. The bill still has to pass both houses of parliament, so the exact details may still change.

But the direction is clear. As an employer, you will need to better explain how pay is determined in your organization. How do you set a starting salary? When does someone get a raise? What criteria do you use for a bonus? And can you show that those criteria apply to everyone in the same way?

This does not mean all salaries become public. The law mainly focuses on transparency about pay policy and insight into differences between men and women who do equal or equivalent work.

Why is pay transparency legislation coming?

Equal pay for equal or equivalent work is already required. So why extra rules?

Because in practice it is often hard to see whether pay is truly equal. An employee usually does not know what colleagues in similar roles earn. And as an HR manager, you do not always have the full picture right away either.

Salaries might sit in your payroll system, job levels in your HR system, and bonuses in a separate file. Different parts of the organization may use different job titles or salary structures. You can calculate an average pay gap, but you still will not know where that gap comes from.

Are relatively more men in higher roles? Do women on average start lower in a scale? Do men receive bonuses more often? Or do they progress faster? Those are the kinds of questions you will soon need to be able to answer.

What does pay transparency mean for you as an employer?

The new rules affect more than just your salary administration. They also impact your job architecture, recruitment, HR processes, and communication with employees.

You will need to evaluate roles objectively and in a gender-neutral way. What knowledge and skills does a role require? How much responsibility does it involve? What effort and working conditions come with it? Using criteria like these, you determine which roles are equal or equivalent.

Recruitment changes as well. Candidates must receive timely information about the starting salary or salary range for a role. Asking about their current or previous salary will no longer be allowed. This helps prevent an existing pay gap from simply being carried over to the next job.

And what do you do when an employee asks how their salary compares to colleagues doing equivalent work? You need to be prepared for that too. Employees will gain more rights to information about their own pay and about the average pay of men and women in comparable roles.

Have you already defined who handles these questions? Do you know which data you are allowed to share? And can you deliver that information quickly and carefully? These may not be issues yet, but they will land on HR’s plate in the foreseeable future.

Pay transparency reporting obligation: when is it your turn?

Does your organization have at least 100 employees? Then you will also face the reporting obligation for pay transparency. You report on, among other things:

• the average pay gap between men and women;
• differences in bonuses and other variable pay;
• the distribution of men and women across pay quartiles;
• pay differences within groups doing equal or equivalent work.

How often you report depends on the size of your organization. Under the current bill, employers with at least 250 employees report annually. Organizations with 150 to 249 employees do so once every three years. Both groups report for the first time by June 7, 2028 at the latest, covering calendar year 2027. For organizations with 100 to 149 employees, a three-year cycle also applies. They report for the first time by June 7, 2031 at the latest, covering calendar year 2030.

Does that still feel far away? Consider how much work it can take to make roles properly comparable, bring all pay components together, and explain any deviations—especially if your organization consists of multiple entities, countries, or collective agreements.

You found a pay gap. Can you also explain it?

An example: your analysis shows that men in a certain job group earn more on average. What does that tell you?

Not enough yet. Maybe they have longer tenure. Maybe they have different responsibilities or demonstrably more relevant experience. Maybe the difference mainly sits in variable pay. There can be an objective, gender-neutral explanation. But can you also demonstrate that explanation?

As HR, you need not only to signal that a difference exists, but also to find out what causes it. Are starting salaries determined the same way everywhere? Does everyone get the same opportunities to progress? Are bonus criteria clear and applied consistently?

With a pay gap of at least five percent within a category of equivalent work, a joint pay evaluation may be required. That applies when there is no objective explanation and the difference is not corrected within six months. That five percent is therefore not automatically a violation, but it is a clear signal to dig deeper.

How do you analyze pay transparency with Power BI?

You might still be able to do the first analysis in Excel. But what happens when you want to zoom in on departments, roles, countries, salary scales, and bonuses? And when you want to keep tracking the development afterward?

The Power BI dashboard for pay transparency from worldofwork™ brings your HR and salary data together. The dashboard can be connected to various HR and payroll systems, including AFAS, Visma, Workday, HiBob, Cornerstone, and Personio. In one environment you can see, for example:

• how the average and total pay of men and women compare;
• where differences sit in base salary, bonuses, and other pay components;
• how men and women are distributed across scales and pay quartiles;
• which roles, departments, countries, or organizational units stand out;
• where you need to dig further.

See a deviation somewhere? Then you can click through to the underlying group. That way you do not have to manually put different files side by side, and you discover more quickly which factors play a role.

What does a pay transparency dashboard already deliver today?

You do not have to wait for the first report. Right now you can run a baseline measurement for pay transparency and discover where your organization stands. Is all the data available? Do your job classifications align well with your salary data? Can you explain differences? And where might your policy have been applied less consistently than you thought?

The dashboard helps you answer those questions step by step. You see what is already set up well, where information is missing, and which groups need extra attention. After that you can track whether measures have an effect and whether new differences arise.

At worldofwork™ we help you with the connection to your systems, choosing the right indicators, and setting up the dashboard for your organization.

Is your organization ready for the pay transparency law?

The law is still being developed, but you can already start preparing today. The sooner you know where you stand, the more time you have to get your data, job architecture, and pay policy in order.

Want to know how well prepared your organization is for the pay transparency law? With the pay transparency dashboard from worldofwork™ you see where differences arise and which steps are still needed.

Get in touch with us and discover how you can turn scattered salary data into clear insight. At worldofwork™ we are happy to think along with you, within your resources and budget.