ELA EU Pay Directive
GERMANY
Legislation Addressing the EU Pay Directive
Draft legislation implementation:
• No, the Directive has not yet been implemented in Germany. There is still no official draft bill from the Federal Government for its implementation
• To date, there is only a final report from a Commission (the Commission) appointed by the responsible minister, containing proposals for the "low-bureaucracy implementation of the Pay Transparency Directive"; this is merely a proposal and is not legally binding
• The Commission's report is available at the following link:
Abschlussbericht der Kommission "Bürokratiearme Umsetzung der Entgelttransparenzrichtlinie" - BMBFSFJ.
There is no official English version of this document
• It is unclear when a draft bill or concrete implementation can be expected; actual implementation is unlikely before 2027
• In terms of content, the Commission's report is the only point of reference; it envisages, in particular:
o An exemption for employers with fewer than 50 employees from the obligation to provide unsolicited information regarding pay progression criteria
o Limiting the right to information to once a year, starting no earlier than 2027, and subsequently no earlier than one year after the last disclosure
o Limiting the right to information to the total gross remuneration from the previous year.
o No reporting obligation for companies with fewer than 100 employees
o Retention of minimum size requirements for comparison groups, specific emphasis on data protection, and/or limiting the right to information to employee representatives (or denying the claim if the comparison group is too small)
o Exclusion of former employees (who have already left the company) from the comparison.
o Preferential treatment for pay systems based on collective agreements
o Designating the works council—rather than the trade union—as the competent body for joint pay assessment, with no provision for substitute representation in the absence of a works council
Application
Recruitment and job applicants
What information must an employer provide to job applicants in relation to pay (i.e. what does "initial pay range" include – basic pay, bonus, family leave payments, pension, stock options, etc)?
Currently, there are no employer information obligations in the recruitment process comparable to those in the Directive; the claims and rights under current law apply only to employees already employed by the employer;
How and when must this information be provided?
In this regard, the Directive will likely be implemented as intended; there are no indications of any deviation from the Directive.
Does the salary history ban apply equally to internal candidates?
Currently, there is no general prohibition against asking about previous salary (including for internal applications); however, such questions are generally permissible only if they relate to the position or the work to be performed;
Likely in the future, as provided for in the Directive
Can employers' use salary history information already known to them when determining salaries for internal hires/ promotions?
Yes, the employer is currently permitted to use information already known to it; this presents no issue regarding either data protection or pay transparency; the Commission has made no statement on this matter
Does local law require that the job vacancy notices and job titles are gender neutral?
e) Yes, job advertisements and job titles are already prohibited from discriminating on the basis of gender.
Transparency of pay and pay progression policy
What information must an employer make available to workers about workers’ pay, pay levels and pay progression under local law?
Currently there is no obligation to provide information proactively; merely the right to request information;
The Commission proposes an exemption from the obligation to provide information proactively for employers with fewer than 50 employees;
Otherwise, no details regarding the implementation of the obligation to provide information proactively
Has local law clarified what are the "objective and gender-neutral criteria" that should be used to determine pay, pay levels and pay progression?
The current legislation includes examples (nature of the work, training requirements, working conditions, and factors related to the labor market, performance, and work results);
The Commission proposal aims to align with criteria set out in the Directive
Are there any exemptions based on headcount?
The Commission proposes exemption from the obligation to provide unsolicited information for companies with fewer than 50 employees
Individual rights to pay information
A worker is entitled to request and receive information on:
- their individual pay level; and
- the average pay levels broken down by sex for workers performing the same work as them or work of equal value to theirs
What is considered to be "pay" for the purpose of this provision?
a) Currently, employees can obtain information about their current average gross monthly base salary and two other individual remuneration components (Commission proposal: total gross remuneration from the previous year)
Gross monthly salary comprises all basic and minimum remuneration as well as all other forms of compensation granted—directly or indirectly, in cash or in kind—by virtue of the employment relationship
Can any pay components be excluded for the purposes of calculating gross hourly pay (for example, can voluntary benefits, stock options or "pay" components that do not appear on a payslip be excluded?)
German law does not currently provide for a specific option to exclude voluntary payments; however, in addition to the base salary, only two further remuneration components must be disclosed (Commission proposal: total gross remuneration of the previous year).
Within what period of time must the information be provided?
Requests for information must be answered by employers not bound by or applying collective agreements within three months; the law does not specify a concrete deadline for employers bound by or applying collective agreements, though the three-month period presumably applies here as well (in the future, the deadline under the Directive will likely be two months)
How should this information be provided?
Requests for information must currently be answered in text form; a handwritten signature is not required, nor is a paper format, but the response must be recorded in some fixed manner (e.g., email); the Commission makes no proposals in this regard
Are there any exemptions based on headcount?
Currently no right to information against employers with generally fewer than 200 employees (no Commission proposal deviating from the Directive, likely for all employers in the future)
Is a worker entitled to request this information individually and/or through workers representatives and/or through an equality body?
Yes, employees generally turn to the works council for this purpose, if one exists; however, the employer may fulfill the claim (Information from the works council will in future only be provided insofar as the works council acts as a messenger)
What rights does a worker have where the information is alleged to be inaccurate or incomplete?
Employees may contact the works council and, if necessary, enforce the right to information in court (failure to satisfy the right to information results in a reversal of the burden of proof to the employer's detriment); likely still possible in the future, but no concrete indications
Does an employer need to inform workers of their entitlement to request this information?
Currently, the employer is not required to inform the employees of their right to information (no Commission proposal deviating from the Directive)
Does local law require that employers provide this information in the local language, or can it be provided in English?
The current law contains no specific requirement regarding the language in which the information is provided; this is usually done in German;
No indications regarding the future, but likely German—or whatever is customary at the company
Prohibitions on workers disclosing pay information
Contractual clauses that prevent employees from disclosing information about their pay are prohibited under the Directive.
Can employers impose any restrictions on workers to prevent them from disclosing their own pay, and/or average pay information obtained pursuant to an information request?
Clauses prohibiting employees from disclosing their salaries are currently common and permissible; however, it is unlikely that this will remain allowed in Germany in the future, and there are likely no other ways for employers to prevent such disclosure
If existing contracts contain pay secrecy clauses, what actions (if any) are required to bring those contracts into compliance (e.g., must such clauses be formally rescinded or is the existing pay secrecy clause simply unenforceable)?
It is not yet foreseeable how so-called legacy contracts are to be handled; German courts have already issued conflicting rulings on this regarding other issues:
it is quite possible that not all contracts will need to be amended—rather, the rule might simply cease to apply, meaning only that such clauses may not be included in new contracts
Gender pay gap reporting
Are the pay gap reporting deadlines the same as those set out in the Directive?
Current reporting: every five years for companies bound by or applying collective agreements; otherwise, every three years;
No Commission proposal deviating from the Directive regarding timeframes, but continued preferential treatment for employers bound by or applying collective agreements
Please confirm what gender pay gap information employers must provide under local law (and include detail on headcount thresholds).
Currently, companies with generally more than 500 employees are required to produce a report detailing measures to promote gender equality and their impact, as well as measures to achieve equal pay for men and women or a justification as to why no such measures have been taken. Additionally, a breakdown by gender of the total number of employees and the average number of full-time and part-time employees. No proposal deviating from the Directive in the Commission report
Does local law specify a uniform reference or “snapshot” date for assessing headcount or pay data for reporting purposes?
No Commission proposal in this regard.
What pay information (if any) is an employer required to publish and where does it need to be published (i.e. on its website).
Currently there is no publication; the report must be attached to the management report and disclosed in the company register. In future, it must be made available to employees, employee representatives, and the supervisory authority, but there is no requirement for broad publication (exception: recruitment processes)
Is an employer required to provide the information to an authority and if so when?
No details regarding this in the Commission report; report must be submitted to the supervisory authority; no further information on how the authority handles the report
Does local law specify how employers should consider employees that choose not to identify with a particular gender?
The law currently refers to men and women, and the commission report contains no further statement regarding other genders.
National Workforce Thresholds
Does national law apply different workforce thresholds than those set out in the Directive (100/150/250 employees) for any pay transparency or reporting obligations?
Currently, the right to information applies only to employers with, as a rule, more than 200 employees;
Employers with, as a rule, more than 500 employees are encouraged to conduct an internal review process (not mandatory!);
Reporting obligations apply to companies with, as a rule, more than 500 employees—every three years for companies bound by collective agreements, and every five years otherwise;
The Commission intends to waive reporting obligations for employers with fewer than 100 employees and the obligation to provide information proactively for employers with fewer than 50 employees
in the future.
Are there any sector-specific or size-specific exemptions or adjusted requirements?
No other exceptions (sector- or industry-specific); partially relaxed rules for companies bound by collective agreements, as a higher level of pay equality can be assumed in these cases due to the collective agreement;
Commission intends to maintain preferential treatment for employers bound by or applying collective agreements
Dealing with Gaps & Joint Pay Assessments
Where gender pay differences are not justified on the basis of objective, gender-neutral criteria, in what timescale must an employer remedy the situation?
Currently no deadline; no Commission proposal deviating from the Directive in this regard (six months after reporting; otherwise, joint remuneration assessment)
Does local law specify how an employer should remedy the situation?
Current legislation provides only for "appropriate measures to remedy the situation"—specifically, an increase in the remuneration that is too low; in this regard, the Commission has made no concrete proposals deviating from the Directive.
How must an employer work in close cooperation with workers’ representatives, the labour inspectorate and/or the equality body in remedying the situation?
No specific involvement of the works council/equal opportunities officer in remedying identified inequalities, merely a general right/obligation to participate; the Commission proposes the works council as the competent body for joint remuneration consultations (Expansion of participation but still no genuine right of co-determination in the future either)
Does local law define ‘close cooperation’ – is it just in consultation with, or must there be agreement?
Currently no further specification of the cooperation; the Commission report also contains no concrete details on this, although the Commission intends to strengthen the works council’s rights in the future—albeit without granting a genuine right of co-determination (no requirement for agreement!).
In what circumstances does local law require an employer to conduct a joint pay assessment?
Currently there is no obligation for a joint remuneration assessment; no Commission proposal deviating from the Directive, merely a proposal from the works council as the competent body for joint assessment
What information must be included in the joint pay assessment?
Currently no joint salary assessment; no concrete proposal from the Commission regarding which information is to be transmitted; under German law, the information to be transmitted is generally that which is necessary for a comprehensive assessment by the works council.
To whom must an employer make the joint assessment available?
No proposal from the Commission in this regard; hence, presumably, to the Monitoring Body either
Data Protection
Where the provision of information would lead to the disclosure of the pay of an identifiable worker, does local law limit access to the relevant information and if so, how?
• Currently no risk, as there is no right to information where the comparable activity is performed by fewer than six employees.
• The Commission intends to maintain the minimum size requirement and additionally highlight data protection aspects, but it also supports the Directive: information potentially to be provided only to employee representatives or the supervisory authority, or no entitlement to information
Breach of pay transparency and pay gap reporting requirements
What sanctions, penalties or other measures may be imposed on an employer in the event of breach of gender pay reporting or pay transparency requirements under local law?
• Reversal of the burden of proof in the event of failure to fulfill the obligation to provide information
• No further sanctions (administrative fine, criminal penalty); potential claim for damages due to discrimination
• No details regarding sanctions in the Commission report
Rights to equal pay – rights of action
What rights of action under local law are available to a worker as a result of any alleged infringement of the right to equal pay?
• Action before the labor court against the employer—based on the provisions of the Wage Transparency Act—seeking equal pay going forward and compensation for the past pay gap (plus potential additional damages for discrimination)
• No specific details in the Commission report on how access is to be facilitated for employees.
Workers Representatives
How does local law define ‘workers’ representatives?
In principle, works council/staff council; representative committee for executive staff; supervisory board in large companies (and, outside the company, trade unions, though not for matters of pay transparency).
If the employer does not have any workers’ representatives, what are its obligations in relation to the provisions of the Directive referring to workers' representatives?
Currently, employees in companies without a works council approach the employer directly. In principle, all matters are to continue to be handled via the works council (including, in particular, remuneration assessment); however, where no works council exists, employees are to approach the employer directly, and the joint remuneration assessment is to be dispensed with.
What rights do workers' representatives have?
The position of the works council is to be strengthened as envisaged by the Directive yet in a moderate manner; currently, there is only a rather general right to information and competence regarding claims for disclosure; according to the Commission, there will be greater scope for consultation in the future, but no genuine right of co-determination
If workers’ representatives have not been engaged in the right way and/or in a timely fashion, what are the consequences under local law?
Currently, no specific sanctions are provided for in the Wage Transparency Act; Only general sanctions apply (invalidity of a measure, the works council’s right to demand cessation of an action);
No specific proposals from the Commission; potential linkage to the sanctions system; overall, a tendency to rely on general regulations, as the intention is not to create a new form of co-determination.
What obligations exist in relation to workers’ representatives’ rights to be consulted on pay gap information and access to the relevant methodologies applied?
Currently only a right to information; in the future, joint assessment of remuneration with the works council (but no genuine right of co-determination)
What rights of action are available to a worker or workers’ representatives in event of breach of gender pay reporting or pay transparency requirements under local law?
Affected employees can sue for the wage differential—covering both future and past periods—and also enforce their right to information;
The Wage Transparency Act currently makes no specific provision for works councils to take action, allowing only for recourse to general legal mechanisms (such as an action for an injunction or a suit to enforce participation rights);
Based on the Commission's report, it is currently impossible to foresee how the path to the courts will be structured in the future or what changes may occur
Member State Support
What support in terms of technical or other assistance and training has been provided, or is promised, for employers?
• The Commission proposes providing all employers with certain free tools that comply with the Directive’s requirements—such as for job evaluation and the formation of comparison groups—as well as standardized reporting templates;
Overall, the aim is to ensure legal certainty and facilitate implementation;
Access to necessary infrastructure is to be made easier for employers
• There are currently no further—and specifically no more concrete—indications regarding support for employers in implementing the future requirements.
Other/Additional
Is there anything else notable in your jurisdiction? For example, additional secondary legislation or guidance.
• Generally no further indications beyond the Commission report