Studies of the upward transfer of power to European Union (EU) institutions have long focused on how integration is progressed. However, the burgeoning literature on differentiation has brought flexibility and variation into the picture. This contribution aims to add to this strand of literature by examining the ‘path to differentiation’ within EU working time regulation as it has unfolded over time. It identifies the ‘opt-out’ as a means of differentiation adopted to overcome policy deadlocks within collective decision-making, albeit one with unforeseen consequences. In particular, the contribution investigates the causes and effects of differentiation by examining (1) its origin, (2) the ‘logic of variation’ or ‘opt-out spiral’ that spurs differentiation and (3) the implications of differentiation over time. We conclude that differentiation has dynamic and broad consequences that are likely to produce sub-optimal policy outcomes and a decline in integration over time.