Family policy in Bosnia and Herzegovina’s entities (Federation of Bosnia and Herzegovina and the Republic Srpska) is incoherent, with its different elements being scattered across different ministries and levels of government. The system is found to be inapt to respond to the needs of families, thus enhancing gender inequalities in the labour market and within families. As a country aspiring to join the European Union, Bosnia and Herzegovina, together with other countries of the Western Balkans region, participates in regular policy dialogue with the European Union institutions. The latest European Commission assessment of the country’s Economic Reform Programme identifies low employment of women as one of the key challenges and implicitly calls for the country to develop an employment-oriented family policy. By analysing the system of family policy and its recent policy developments, the article assesses the country’s capacity to respond to the recommendation and create conditions for greater participation of women in the labour market. The question is whether the European Union’s conditionality and recommendations have the potential to transform the current family policy arrangements in the entities.