The European Union is implementing the Pay Transparency Directive to reduce the wage gap between male and female employees. According to the new regulation, job applicants will be able to learn the salary range before starting a job. Employers will be prohibited from asking about previous salaries.
The European Union’s “Pay Transparency Directive” No. 2023/970 will be implemented in all member countries starting in 2026. Under the directive, employers will be required to disclose employees’ salary information.
In Germany, women still earn on average 16% less per hour than men. When considering equivalent positions and qualifications, the gap decreases to 6%. Experts indicate that the primary reason for the gap is the prevalence of women in low-paying jobs and part-time employment.
According to the new regulation, job applicants will be able to learn the salary range before starting a job. Employers will be prohibited from asking about previous salaries. Large companies will be required to regularly report gender-based pay disparities. If pay discrimination is detected, employees will be able to demand full payment, and the burden of proof will be on the employer.
Equality and Education Minister Karin Prien announced that the directive will be implemented as is. While unions argue that the implementation is necessary, employers express concerns about bureaucracy and interference with collective bargaining freedom.
According to a survey by international consulting firm Willis Towers Watson, a large portion of companies in Germany still do not disclose salary ranges during job interviews. About half of them do not plan to do so in the upcoming period. Employers are wary of increased salary negotiations and employee reactions.
