The clock is ticking: The EU Pay Transparency Directive must be transposed into German law by June 7, 2026. However, a draft bill has still not been presented—making timely implementation highly unlikely.
For employers, however, this is by no means a green light: As of June 8, 2026, the directive’s provisions may already take effect indirectly, as German labor courts will be required to interpret existing national law—in particular the Pay Transparency Act, which has been in force since 2017—in a manner consistent with the directive. As a result, the legal and economic risks associated with pay discrimination are already increasing—even without a new implementing law.
What does this mean specifically for employers? In addition to the information obligations during an ongoing employment relationship pursuant to Art. 6(1) of the Directive, employers now also have information obligations toward job applicants: According to Art. 5(1)(a) of the Directive, there is a right to be informed of the starting salary or a corresponding salary range.
Employers must also conduct so-called job evaluations to determine which positions constitute the same or equivalent work. If employees assert such claims for information—and this will be possible in the future regardless of the size of the company—these must be answered in writing within two months at the latest (Art. 7(4) of the Directive). Furthermore, employees must be informed annually of their right to information pursuant to Art. 7(3) of the Directive.
In addition to such requests for information, employers may face subsequent equal pay lawsuits, i.e., claims for damages seeking back pay for the pay gap. If the employer cannot rebut the presumption of gender-based discrimination and the pay gap is not justified by objective, gender-neutral criteria, the employer faces substantial claims for back pay (see, e.g., Federal Labor Court, judgment of Oct. 23, 2025 – 8 AZR 300/24), and under certain circumstances even against external managing directors (see LG Bochum judgment of Dec. 2, 2025 – 17 O 56/24).
Companies are therefore required to introduce and apply a consistent and non-discriminatory compensation system—otherwise, in the event of a dispute, a so-called “upward adjustment” may be required.
We are happy to advise you on any questions regarding equal pay.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.