The EU directive on equal opportunities for men and women aims to bring more clarity about salary structures and reduce potential unequal treatment in the payment of women and men. However, this concern imposes numerous new obligations on companies, leading to significant additional bureaucratic burdens.

The federal government must implement the directive requirements into national law by June 7, 2026. Consequently, reporting obligations will soon apply to companies with more than 100 employees (previously 500). These must regularly prepare reports on gender-specific wage disparities. If a discrepancy of more than five percent is evident, employers are obligated to, within six months, undertake measures to eliminate it in collaboration with the works council.

In addition, all employees will have the right to information about their individual remuneration and the average compensation for comparable jobs – broken down by gender. Employers must inform about this right annually.

Upon the activation of the new rules, greater transparency will also be required in the hiring process. Salary entry levels or a salary range must already be stated in job advertisements.

The directive also foresees strict sanction mechanisms, compensations, and rules for the burden of proof that come into play when companies fail to comply with the directive's obligations. For example, in the event of a lawsuit concerning pay discrimination, the burden of proof lies with the employer to demonstrate that no discrimination occurred. Companies will thus be required to comprehensively document wage decisions to possibly provide evidence that wage differences are justified. The German legislator must also ensure that violations of the directive, for instance concerning reporting and information obligations, result in fines. In cases of unjustified wage disparities, companies face claims for damages and compensation from employees.

Further information can be found on the BMBFSFJ website.