Germany has missed the EU deadline for pay transparency and Brussels has refused to extend the implementation deadline: now what?

The deadline for transposing the European Pay Transparency Directive has passed, yet a German transposition law has still not been enacted. For companies, this is by no means a green light: labour courts are already increasingly aligning themselves with European guidelines. Find out in our new article what impact this may have on rights to information, remuneration systems and the assessment of pay gaps, and why companies should review their processes now.

The deadline for implementing the European Pay Transparency Directive (“EUPTD”) expired on 7 June 2026, and Germany, like many other European countries, has not yet even produced a draft bill. The EU is now threatening to launch infringement proceedings. Furthermore, in response to an enquiry, the European Commission explicitly announced at the end of May 2026 that it would not be including the EUPTD in a so-called “stop-the-clock” package of measures, as it considers the EUPTD to be essential for fully realising the right to equal pay for women and men. This means that the last hope of the implementation deadline being postponed has also been dashed.

What does this mean for businesses?

At this point, a distinction must be made between public and private employers. Whilst public employers are directly and mandatorily subject to the EUPTD from 8 June 2026, it has no direct effect on private employers. Employees cannot therefore derive any direct claims against their employer under the EUPTD. However, despite the lack of national implementation, the labour courts already have to interpret existing national law in line with the Directive and will be guided by the requirements of the EUPTD even without its formal implementation.

Even under the present legal situation, companies are already obliged pursuant to the currently applicable version of the German Pay Transparency Act (Entgelttransparenzgesetz, “EntgTranspG”) and the general prohibition of discrimination not to make any impermissible differences in pay between women and men for the same or equivalent work. Case law derives the principle of substantive pay equality from Article 157 TFEU (Treaty on the Functioning of the European Union); a provision that has direct effect in relations between private parties. According to the Federal Labour Court (Bundesarbeitsgericht, “BAG”), this substantive pay equality applies to every single component of pay, whereby the concept of pay is to be interpreted broadly and can even cover benefits provided only after the employment relationship has ended.

What does an interpretation in line with the Directive mean in concrete terms?

In its decision of 23 October 2025, the Federal Labour Court has already paved the way with the so-called ‘pair comparison’. In its opinion, just one single person of the opposite sex (pair comparison) is sufficient as a benchmark to substantiate a claim for equal pay. The employer must merely demonstrate and, where necessary, prove that it pays the claimant a lower wage than that paid to the person of the opposite sex who has been used for the comparison, and that the claimant performs the same or at least equivalent work. This alone, within the meaning of Section 22 of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, “AGG”) – when interpreted in accordance with EU law – establishes the presumption of a discrimination on grounds of sex. Even if the comparison group is in fact larger or the median salary is lower than that of the designated person used for the comparison, according to the Federal Labour Court, the employer is obliged to pay the remuneration that it paid it to the person used for the comparison in the pair comparison if it cannot rebut the presumption of discrimination on grounds of sex.

This makes the consequences of an interpretation of the current laws in line with the Directive crystal clear; namely, a minimum comparison group within the meaning of Section 12(3) sentence 2 of the EntgTranspG or the median pay is ultimately no longer relevant.

In case of an interpretation in line with the Directive, the courts are merely prohibited from interpreting the law contrary to its wording (‘contra legem’).

Handling of claims for information after expiry of the implementation deadline

This therefore raises the question of how, specifically, claims for information from employees, for example, should be handled from 8 June 2026 onwards. The main problem here is that the right to information under the EUPTD is significantly more extensive than under the current version of the German Pay Transparency Act. For instance, a right to information can currently only be asserted in companies regularly employing more than 200 persons and, even then, only once every two years. Under Section 12(3) sentence 2 of the German Pay Transparency Act, employers are only required to provide a comparative pay figure if the comparable role is performed by at least six employees of the opposite sex. The EUPTD contains none of these restrictions. However, employers can currently still invoke these restrictions when responding to requests for information.

Caution is still required when responding to requests for information regarding the equivalence of the work performed. It is anticipated that the courts will assess the comparability of a job at least on the basis of the four minimum criteria of the EUPTD (skills, workload, responsibility and working conditions), as these requirements will likely be used as an interpretative benchmark for Section 4(4) of the German Pay Transparency Act in an interpretation in line with the Directive.

As a precautionary measure, employers should disclose not only the median pay, as required by the current German Pay Transparency Act, but also the average pay of comparable employees – provided, of course, that this does not directly expose the employer to a presumption of pay discrimination. Furthermore, pay differences must be assessed on the basis of objective, gender-neutral criteria.

Implications for reporting obligations, pay confidentiality clauses and the like

Conversely, an interpretation in line with the Directive will not lead to a reporting obligation regarding a possible gender pay gap, as this would be contrary to the law, given that the German Pay Transparency Act in its current version does not provide for such a reporting obligation. Furthermore, according to statements by the Federal Ministry for Family Affairs, it is expected that companies will be given until early 2028 to adapt to the new legal situation. Therefore, a reporting obligation regarding the gender pay gap is unlikely to be introduced before then.

Clauses in employment contracts that oblige employees to maintain confidentiality regarding their remuneration are already invalid under current law and should ideally be removed immediately from standard employment contracts or termination agreements in order to avoid providing grounds for a reversal of the burden of proof. For the same reason, employers should already refrain from asking about a candidate’s previous salary during job interviews.

Employers who have not yet taken action should now seize this opportunity to future-proof their remuneration system and establish EUPTD-compliant processes for responding to requests for information. For compliance reasons alone, a thorough review of one’s own remuneration landscape and the identification of areas requiring urgent action are essential. We would be happy to assist you in this process.

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