Pay Transparency in Germany – Are You Prepared For the New Information Claims?

3 minute read | January.18.2018

Since January 6, 2018, employees in Germany may bring a claim to information on their peers' salary under the Pay Transparency Act (Entgelttransparenzgesetz – EntgTranspG). Learn how to react when you receive the first information claim.

Which Companies Are in Scope?

Only companies with more than 200 employees employed in an operation in Germany are in scope.

Who Can Bring Information Claims?

All employees can bring an information claim, no matter whether female or male, no matter whether full-time or part-time, no matter whether on a fixed-term or unlimited term. Also, this is a day one-entitlement, so there is no qualifying period.

What Information Can be Requested?

Salary of co-workers in similar positions and the criteria and the procedure for determining his or her own salary. Specifically, the information right comprises the average monthly gross salary of at least six colleagues of the other gender who perform the same or the same type of work. Also, the employee can ask to be provided with information about up to two remuneration components (e.g. bonus, company car) at his or her option.

Are There Any Form Requirements?

Yes. The employee's right to information may be exercised in textual form, for example by email. Written form (i.e., a signed document) is not required. Oral requests, for example in a meeting or over the phone, do not suffice.

Also, the employee needs to specify the (alleged) same or same type of work in the request. However, if the employer holds the view that the employee does not perform the same or the same type of work specified in the request, the request is not void. Instead, the company needs to provide the information for the work they consider to be the same or the same type.

What Are the Requirements for the Reply?

The employer has to provide details on the salary of the specified comparison group on the basis of the statistical median of the gross salaries and two other remuneration components, if requested. However, for data privacy reasons this only applies if there are at least six individuals of the opposite sex in the comparison group.

If the company is bound by a collective bargaining agreement or the employment contract refers to a collective bargaining agreement, the employer may just refer to the applicable salary groups

What About Timing?

The company will be obligated to provide an employee with the requested information within three months in textual form (again, for example by email) after the information request. If the employer does not meet the employee's request or does not answer it properly or in due time, the employee may enforce the claim by filing a lawsuit or filing a complaint with the works council, if any.

Who Will Gather and Issue the Information?

In companies bound by collective bargaining agreements, the information shall be both gathered and issued by the works council. In companies with an existing works council but not bound by collective bargaining agreements, employer and works council may choose whether the right to information shall be exercised by the works council or the individual employee.

What Happens if the Company Does Not Comply?

If the employer does not fulfill its information obligations, in the event of a dispute, the burden of proof for a violation of the equal pay principle is being reversed, meaning that the employer will have to show and prove that no violation of the equal pay principle has occurred, and must put forward reasonable justification for unequal payment.

How Often Can Information be Requested?

A new information claim may be brought by the same employee every two years after the last request. However, during the first three years since the entry into force of the Act, the next information claim may only be brought after three years after the first one.