EU Pay Transparency Directive: Netherlands vs Italy Implementation Compared

The EU Pay Transparency Directive (2023/970/EU) is reshaping how employers across Europe manage compensation. With member state transposition deadlines set for June 7, 2026, countries are finalizing their national laws. The Netherlands and Italy — two major EU economies — have taken notably different approaches. Understanding these differences is essential for any organization with operations in both jurisdictions.

EU Pay Transparency Directive: Core Requirements

The directive establishes minimum standards across four key areas:

• Pay transparency before employment: Employers must disclose the initial pay range or fixed pay in job postings or before the interview. Asking candidates about their salary history is prohibited.
• Right to information (RTI): Employees can request pay information for themselves and comparable workers, including average pay levels broken down by gender. Employers with 50+ employees must also disclose criteria used for pay progression and career advancement.
• Gender pay gap reporting: Employers with 100+ employees must publish gender pay gap data at regular intervals. Where the gap exceeds 5% and is not justified by objective, gender-neutral factors, a joint pay assessment with worker representatives is required.
• Enforcement and remedies: Member states must establish penalties for non-compliance, including fines. The burden of proof shifts to employers in pay discrimination cases once the employee establishes a prima facie case.

Both the Netherlands and Italy have now published their implementation laws. Let's examine each in detail.

Netherlands: Draft Implementation Bill (Submitted May 21, 2026)

The Dutch government submitted its draft implementation bill to the House of Representatives on May 21, 2026. Several key features stand out:

Pay Reporting Deadlines Confirmed

Despite advice from the Council of State to align reporting deadlines more closely with the directive, the government has maintained the original timeline: employers with 150+ employees must submit their first gender pay gap report by June 7, 2028. This gives Dutch employers roughly two years to prepare.

Treatment of Non-Binary Employees

The Netherlands has taken a pragmatic approach to non-binary employees. They are excluded from pay gap reporting calculations but must be counted when determining employer size and proportion calculations. Employers may record gender based on identity documents, and non-binary employees can choose to be categorized as male or female for reporting purposes. This flexibility aims to balance inclusion with the binary nature of current reporting requirements.

GDPR vs. Pay Transparency: A Hardline Stance

One of the most controversial aspects of the Dutch bill is its prioritization of pay transparency over GDPR privacy concerns. The government has decided not to implement indirect disclosure to worker representatives. Instead, it asserts that providing pay information directly to employees is GDPR-compliant even if the data could be traced back to identifiable individuals. This position puts the Netherlands at odds with the Dutch Data Protection Authority (AP), which has raised concerns about re-identification risks, especially in small teams. Employers should monitor this debate closely, as it may lead to future amendments or enforcement conflicts.

Role of Collective Bargaining

While the Netherlands has a strong tradition of collective bargaining, the draft bill does not give collective agreements a central role in defining equal work, as Italy does. Instead, the bill focuses on employer obligations and individual employee rights.

Italy: Legislative Decree No. 96/2026 (Effective June 7, 2026)

Italy transposed the directive through Legislative Decree No. 96/2026, effective June 7, 2026. The Italian approach is distinctive in its reliance on national collective bargaining agreements (NCBAs).

Central Role of NCBAs

In Italy, NCBAs are central to defining "same work" and "work of equal value." Internal company systems can only supplement, not replace, the NCBA framework. This means that employers must first look to the applicable NCBA to determine whether roles are comparable. This approach provides a standardized baseline but may be less flexible for organizations with unique job structures.

Pay Ranges and Salary History Ban

Job postings must include a pay range, and employers are prohibited from asking candidates about their salary history. This aligns with the directive's requirements and aims to break the cycle of historical pay discrimination.

Right to Information with Privacy Safeguards

Employees have the right to request pay information annually. Where the number of comparable employees is small (making re-identification likely), privacy safeguards apply. This balanced approach addresses GDPR concerns while still providing transparency.

Gender Pay Gap Reporting

Employers with 100+ employees must report gender pay gap data on a phased timeline. Crucially, if the gap exceeds 5% and is not justified by objective factors, a joint assessment with worker representatives is triggered. This is a lower threshold than some other member states and will require proactive monitoring.

Pay Progression Disclosure

Employers with 50+ employees must disclose the criteria used for pay progression and career advancement. This includes both objective criteria (e.g., performance, tenure) and the process for applying them.

Penalties

Non-compliance can result in significant penalties. While the exact amounts are set by the decree, they are designed to be dissuasive and proportionate.

Comparison: Netherlands vs. Italy

Compliance Checklist for Multi-Jurisdictional Employers

If you operate in both the Netherlands and Italy, follow these steps:

1. Audit current pay structures: Map all roles to NCBAs in Italy and to internal job families in the Netherlands. Identify any unexplained gender pay gaps.
2. Prepare job posting templates: Ensure all postings include a pay range. Remove any questions about salary history from application forms.
3. Establish RTI procedures: Create a process for handling employee requests for pay information within the required timeframe (typically 2-4 months). Ensure privacy safeguards are in place for small comparator groups in Italy.
4. Implement pay progression criteria: Document and communicate the criteria used for promotions and raises. This is mandatory for employers with 50+ employees in both countries.
5. Set up gender pay gap reporting: For the Netherlands, prepare for the June 7, 2028 deadline. For Italy, identify your first reporting date based on the phased timeline. Begin collecting data now.
6. Monitor the 5% threshold: If your gender pay gap exceeds 5%, prepare to conduct a joint pay assessment with worker representatives.
7. Stay informed on GDPR developments: In the Netherlands, monitor the debate between the government and the Data Protection Authority. Consider seeking legal advice on the best approach to data disclosure.

Best Practices for Pay Equity Compliance

Beyond legal compliance, leading organizations are using pay transparency as a strategic opportunity to attract talent and build trust. Consider these best practices:

• Conduct proactive pay equity audits before regulatory deadlines force them.
• Communicate your pay philosophy internally to build understanding and trust.
• Use technology to track pay data across jurisdictions and generate required reports efficiently.
• Train hiring managers on the salary history ban and how to discuss pay ranges with candidates.
• Engage with worker representatives early to align on methodology for pay assessments.

For organizations managing compliance across multiple EU member states, tracking each country's specific requirements is a significant challenge. AIGovHub's HR compliance tools can help you monitor pay equity, generate gender pay gap reports, and stay ahead of evolving obligations in the Netherlands, Italy, and beyond.