Remuneration Transparency Act: A look ahead

The coalition committee set the outline for a Remuneration Transparency Act in October 2016, thereby affirming that the current gender pay gap between men and women is no longer acceptable. The Act is planned to come into force in summer 2017. The draft law expressly states that it aims to promote and enforce the equal pay principle, meaning that equal pay must be granted for equal or comparable work and that direct or indirect wage discrimination based on gender is prohibited.

The essential content is as follows;

  • Agreements violating the equal pay principle are null and void and employees have a claim to be paid the same salary that would have been paid absent the gender pay discrimination.
  • Employees are entitled to request information regarding the applicable salary structure (eg, how is the salary level determined and what is being paid for equal tasks). This will apply to employees at sites with more than 200 employees of the respective employer.
  • Employers with more than 500 employees are required to review and assess their pay structure at least every five years. If gender pay discrimination is found such practice must be eliminated.
  • Employers with more than 500 employees that are required to publish a status report under the German Commercial Code will have to make and publish a report in which they explain their measures to promote equality and their measures to fight gender pay discrimination.