The Flemish government has formally approved a draft decree aimed at implementing key components of the European Union’s Pay Transparency Directive, signaling a significant step toward closing the gender pay gap within the region. This legislative move, spearheaded by Flemish Minister for Equal Opportunities Caroline Gennez, focuses on the regional government’s authority to enforce compliance through a robust system of administrative and criminal sanctions. While the federal government and social partners within the National Labour Council still hold the responsibility for the broader transposition of the Directive into Belgian labor law, the Flemish initiative marks the first concrete regional effort to establish a punitive framework for employers who fail to adhere to forthcoming transparency standards. The decree specifically targets the persistent wage disparity between men and women, which remains a cornerstone of the European Union’s broader social and economic policy agenda.
The Legislative Framework and Flemish Jurisdiction
The approval of this draft decree by the Flemish government follows the adoption of the EU Pay Transparency Directive (Directive 2023/970) by the European Parliament and the Council in May 2023. Under the European framework, member states have until June 7, 2026, to transpose the Directive’s provisions into their respective national laws. In the complex institutional landscape of Belgium, jurisdiction over labor and employment matters is divided between the federal government and the regional authorities (Flanders, Wallonia, and Brussels). While the federal level dictates the core of individual and collective labor law, the regions possess specific powers regarding employment mediation, the professional reintegration of workers, and the monitoring of certain employment standards.
The Flemish government’s latest action utilizes its "limited but vital" powers to oversee compliance and impose penalties. By establishing a framework for criminal or administrative fines, Flanders is positioning itself as a proactive enforcer of the Directive’s goals. According to the draft decree, companies operating within the Flemish region that refuse to disclose required pay information or are found to be engaging in deliberate wage discrimination will face financial consequences. While the exact amounts of these fines are currently undergoing further legislative refinement and have not yet been finalized, the intent is to provide a deterrent strong enough to alter long-standing corporate cultures of pay secrecy.
Chronology of the Pay Transparency Initiative
The path toward this Flemish decree began with the European Commission’s proposal for pay transparency in 2021, driven by the realization that the gender pay gap in the EU had stagnated for nearly a decade. Following intensive negotiations, the Directive was officially signed into law on May 10, 2023.
In Belgium, the federal government initially took the lead in discussions within the National Labour Council (NAR/CNT), where employer organizations and trade unions began debating the practicalities of reporting requirements. However, progress at the federal level has slowed significantly in early 2024, largely due to the political focus shifting toward the upcoming general elections in June.
Recognizing a window of opportunity following International Women’s Day in March 2024, Minister Caroline Gennez introduced the Flemish draft decree to ensure the region would not lag behind in its enforcement capabilities. Following its approval by the Flemish government last Friday, the decree must now proceed to the Flemish Parliament for a formal vote. If passed, it will establish the legal basis for labor inspectors in Flanders to begin auditing pay structures once the federal reporting requirements are fully active.
Supporting Data: The Reality of the Wage Gap in Belgium
The urgency behind the Flemish decree is underscored by varying but consistent data regarding gender-based wage inequality. According to Minister Gennez, women in Belgium currently earn an average of seven percent less than their male counterparts. This figure reflects the "unadjusted" gender pay gap, which compares the average hourly earnings of all working men and women.
Data from Statbel, the Belgian statistical office, provides a more nuanced view. While Belgium boasts one of the lowest gender pay gaps in the European Union—partially due to the country’s strong system of collective bargaining and automatic wage indexation—disparities remain stark in specific sectors and at higher levels of management. For instance, in the private sector, the gap often widens to over 11% in certain financial and legal services.
Furthermore, the "adjusted" pay gap, which compares men and women in the same positions with similar levels of experience and education, still shows a persistent "unexplained" difference of approximately 2% to 3%. The EU Pay Transparency Directive, and by extension the Flemish decree, aims to eliminate this unexplained portion by forcing employers to justify pay differences based on objective, gender-neutral criteria such as skills, effort, responsibility, and working conditions.
Official Responses and Political Justification
Minister Caroline Gennez has been vocal about the ethical and economic necessity of the new measures. In her official statement following the cabinet’s approval, she emphasized that equal pay is not merely a social goal but a fundamental right. "Equal pay for equal work is only logical, and it’s the foundation for a more equal and fairer society," Gennez stated. She further argued that the current system allows for a lack of accountability, noting that "employers get away with this far too often. That has to stop. Pay transparency is important, and employers who refuse to disclose pay information and deliberately discriminate should be punished with fines."
The response from the Flemish business community has been more cautious. While organizations like Voka (the Flanders’ Chamber of Commerce and Industry) and Unizo (the organization for SMEs) generally support the principle of equality, they have expressed concerns regarding the administrative burden the Directive may impose. Business leaders have warned that smaller companies may struggle with the complex reporting requirements and have called for a "pragmatic" implementation that avoids excessive "gold-plating" of the EU rules.
On the other side of the spectrum, Belgian trade unions have welcomed the Flemish move, calling for even stricter federal legislation to ensure that workers’ representatives have a central role in analyzing pay data and negotiating corrective measures when gaps are identified.
Broader Impact and Implications for Employers
The Flemish decree, once fully implemented alongside federal law, will fundamentally change the recruitment and HR landscape in the region. The EU Directive, which the Flemish sanctions will enforce, introduces several revolutionary concepts for the Belgian workplace:
- Ban on Salary History Inquiries: Employers will no longer be permitted to ask job applicants about their previous salary history. This is intended to prevent past wage discrimination from following a worker into a new role.
- Right to Information: Employees will have the right to request information from their employer on their individual pay level and the average pay levels, broken down by sex, for categories of workers doing the same work or work of equal value.
- Mandatory Reporting: Companies with more than 100 employees will eventually be required to publish reports on their gender pay gap. If the gap exceeds 5% and cannot be justified by objective factors, the employer must conduct a joint pay assessment in cooperation with workers’ representatives.
- Shift in Burden of Proof: In legal proceedings regarding pay discrimination, the burden of proof will shift to the employer. It will be the company’s responsibility to prove that there was no discrimination, rather than the employee’s responsibility to prove that there was.
For companies operating in Flanders, the introduction of regional fines means that the cost of non-compliance has just risen. HR departments will need to conduct thorough internal audits of their current pay scales and job classification systems to ensure they are gender-neutral. The Flemish government’s decision to pursue criminal sanctions in addition to administrative ones indicates that the region intends to treat wage discrimination with the same level of severity as other forms of workplace safety or environmental violations.
Analysis: The Road to 2026
The Flemish government’s "partial" implementation is a strategic move to set a precedent before the federal government completes its legislative work. However, the effectiveness of the Flemish sanctions will ultimately depend on the quality of the federal reporting standards. If the federal government does not provide clear guidelines on how "work of equal value" is defined, the Flemish inspectors may find it difficult to apply fines in practice.
Moreover, the quietude at the federal level and within the National Labour Council suggests that the most difficult negotiations—regarding the specific thresholds for reporting and the role of unions in "joint pay assessments"—are yet to come. The Flemish decree serves as a signal to the federal authorities and social partners that the regions are ready to act and that the status quo of pay secrecy is no longer tenable.
As the decree moves to the Flemish Parliament, the focus will shift to the technical details of the fines. Stakeholders will be watching closely to see if the penalties are calculated based on a percentage of company turnover—similar to GDPR fines—or if they will be fixed amounts per violation. Regardless of the final numbers, the Flemish government has made it clear: the era of "getting away with" pay inequality in the northern region of Belgium is coming to an end. This legislative step ensures that when the full weight of the EU Pay Transparency Directive hits in 2026, Flanders will already have the enforcement machinery in place to hold employers accountable.
