Pay Equity Germany

Basic Summary

Germany's Entgelttransparenzgesetz (Pay Transparency Act) of 2017 grants employees the right to request information about the pay of colleagues performing equal or equivalent work. The General Equal Treatment Act (AGG) prohibits gender-based pay discrimination. Germany must transpose the EU Pay Transparency Directive (2023/970) by June 2026.

Key Legislation

Entgelttransparenzgesetz (Pay Transparency Act)

Effective: July 6, 2017

Applies to employers with more than 200 employees.

Key provisions:

1. Individual right to information: Employees can request information about the criteria and procedures for pay determination and career progression
2. Comparative pay information: Employees can request the average monthly gross pay of at least six colleagues of the opposite sex performing equal or equivalent work
3. Reporting requirements: Employers with 500+ employees must report on measures to promote equal pay (if subject to management reporting obligations)

General Equal Treatment Act (AGG)

Prohibits discrimination based on gender (and other protected characteristics) in all aspects of employment, including remuneration.

Burden of proof: Shifts to employer once employee establishes facts suggesting discrimination.

Individual Information Rights

Eligibility

• Employers with 200+ employees
• Employee must have been employed for at least 6 months

Information Request Process

Employee can request:

1. Pay determination criteria: Factors and procedures used to determine their pay
2. Comparative pay data: Average gross monthly pay (including bonuses, allowances) for:
   • At least 6 employees of the opposite sex
   • Performing equal or equivalent work
   • Broken down by up to two individually named pay components

Equal or equivalent work defined as:

• Same or similar activities
• With comparable requirements regarding training, skills, effort, and responsibility

Employer Response

Timeline: Within 3 months of request

Content: Must provide:

• Criteria for pay determination
• Average comparative pay (if at least 6 comparators exist)
• If fewer than 6 comparators, employer may refuse (to protect individual data privacy)

Format: Written response, can be electronic

Limitations

• Requests limited to once every two years (per employee)
• Employer can refuse if fewer than 6 valid comparators
• No obligation to disclose individual salaries

Reporting Requirements

Scope

Employers with 500+ employees and subject to commercial or cooperative law management reporting requirements.

Content

Report must describe:

• Measures taken to promote equal pay
• Effects of such measures
• Published within management report (Lagebericht)

Frequency: Annual (as part of management report)

Voluntary Workplace Reviews (Betriebliche Prüfverfahren)

Employers are encouraged (but not required) to conduct voluntary internal pay equity audits using:

• Comparative pay analysis by job category and gender
• Evaluation of pay structures and criteria
• Development of action plans to address gaps

EU Pay Transparency Directive (2023/970)

Germany must transpose by June 7, 2026. Expected new requirements:

1. Pay range transparency: Salary information in job ads or before interview
2. Pay history ban: Cannot ask about current/prior compensation
3. Enhanced information rights: Individual and category-level pay data
4. Mandatory reporting: Gender pay gap reporting for 100+ employees (phased)
5. Joint pay assessment: Required if ≥5% unexplained gap persists

Enforcement and Remedies

Enforcement Bodies

• Federal Anti-Discrimination Agency (ADS): Guidance and support for discrimination complaints
• Labour courts (Arbeitsgerichte): Adjudicate pay discrimination claims

Employee Remedies

• Back pay: Difference between pay received and pay to which entitled
• Damages: Compensation for material and non-material harm
• Legal costs: Prevailing employee recovers attorney fees

Employer Penalties

• Reputational harm from public legal disputes
• No specific administrative fines under current law (may change with EU Directive transposition)

Best Practices

Proactive Compliance

1. Transparent pay structures: Clear, documented pay grades and criteria
2. Gender-neutral job evaluation: Use objective factors (skill, effort, responsibility, conditions)
3. Regular pay audits: Identify and remediate unjustified gaps
4. Response process: Establish workflow for handling information requests within 3-month deadline

Pay Information Requests

• Train HR to handle requests accurately and timely
• Maintain data on job classifications and comparators
• Document pay-setting rationale for defensibility

Collective Bargaining

Germany has strong collective bargaining coverage. Collective agreements (Tarifverträge) often set:

• Detailed pay scales by job category and seniority
• Transparent progression criteria
• Equal pay provisions

Employers covered by collective agreements generally have lower pay gap risk due to standardized pay structures.

Resources

• Federal Ministry for Family, Seniors, Women and Youth (BMFSFJ): https://www.bmfsfj.de
• Federal Anti-Discrimination Agency (ADS): https://www.antidiskriminierungsstelle.de
• Entgelttransparenzgesetz (full text): https://www.gesetze-im-internet.de/entgtranspg/
• General Equal Treatment Act (AGG): https://www.gesetze-im-internet.de/agg/
• EU Pay Transparency Directive: https://eur-lex.europa.eu/eli/dir/2023/970/oj

Compliance Calendar

Date	Action
Ongoing	Respond to employee pay information requests within 3 months
Annual	Publish pay equality measures in management report (500+ employers)
June 7, 2026	EU Directive transposition deadline
Post-2026	New reporting and transparency obligations (to be specified)

---

Disclaimer: This guide is for informational purposes only and does not constitute legal advice.