Germany: EU Pay Transparency

Why should I read this?

Germany is seeing a recent wave of equal pay litigation.

In the most recent case, the Federal Labour Court (BAG) held that different salaries between colleagues of the opposite sex amounted to a presumption of gender-specific discrimination. It clarified that neither additional circumstances nor a “preponderance of probability” are required to trigger that presumption and shift the burden to the employer to show that there was no discrimination.

With equal pay in the spotlight in Germany as it continues to work towards its transposition of the EU Pay Transparency Directive, it is anticipated that the current litigation landscape on this topic will continue to gather pace.

This briefing outlines the latest BAG decision, highlights the potential wider impact of the decision and provides a summary of what employers in the EU should be doing now to prepare for the implementation of the EU Pay Transparency Directive. 

“The era of quiet pay gaps is ending. Transparency and fairness are reshaping German pay practices, driven by the evolving litigation landscape and upcoming legal reform.”
Merle Templin, Partner

What do I need to know?

Equal pay for equal work is a fundamental principle of German labour law. However, gender-based pay disparities persist. In recent years, German courts have increasingly addressed equal pay issues.

In a recent case in the BAG, a female manager alleged that her remuneration was significantly lower than that of male colleagues performing equivalent work. She sought compensation and adjustment based on the highest paid individual in that comparator group, submitting that the fact that her pay was lower gave rise to a presumption that this disadvantage was based on gender.

At the previous stage in the proceedings, the Regional Labour Court (LAG) had held that (overwhelming) probability is required for an employee to rely on this presumptive effect. A comparison of salary data could not be based on just any employee of the opposite sex in a large comparison group. Further, any presumption of discrimination would be further weakened because the female employee’s salary was lower than the median, indicating there are other reasons for the difference in salaries. Additionally, the male colleague she compared herself to earned in excess of the male median, indicating again that the salary difference had other (non-discriminatory) reasons.

The BAG confirmed that salary comparison between one male and one female employee respectively is a legitimate method to identify potential discrimination. It also clarified that no further evidence or overwhelming probability is required to justify this presumptive effect, for example comparing  salary to the respective gender median salaries. It referred the case back to the LAG to determine whether the presumed discrimination could be refuted by the employer.

Anticipated impact

The number of equal pay lawsuits is expected to increase significantly once the EU Pay Transparency Directive is transposed in Germany, including due to the Directive requiring Member States to provide employees with significantly improved enforcement mechanisms than currently exist in Germany. In contrast to Germany’s current Pay Transparency Act, there will be extended information and reporting obligations, easier access to legal recourse, together with an unprecedented focus on not only equal work but also on work of equal value.

Given the BAG’s confirmation that salary comparison between one male and one female employee respectively is a legitimate method to identify potential discrimination and shift the burden to the employer to prove discrimination does not exist, Germany may also now see an increase in lawsuits filed by individuals who claim systematic pay discrimination based simply on salary comparison by gender, without any other supporting factors, and regardless of the relation between the respective median (or average) salaries.

Strategic implications for employers and how we can help

Ensuring equal pay compliance will typically be a cross-functional responsibility, including legal, HR, compensation, payroll and pay equity teams. Forming a working group early and identifying areas that may require external support will be essential.

With our established equal pay practice, we are ideally placed to support employers with pay transparency compliance, including readiness for the EU Pay Transparency Directive requirements. Some of our recent work in this area includes:

• reviewing pay architecture through the lens of work of equal value to advise on compliance
• conducting pay gap analyses against current practices
• advising on local legal developments
• developing action plans
• advising on how to structure the project to maximize privilege and the confidentiality of sensitive pay data and potential gaps
• drafting local and EU consistent templates and processes
• delivering training

We also have a proven track record of representing employers in leading cases which have shaped the law in this field. We use that experience to provide proactive and practical advice to employers on steps they can take to reduce the risk of equal pay disputes and litigation.

Additional resources

Our pay transparency interactive tracker has been designed to help our clients track pay transparency developments, as well as providing access to essential FAQs, timelines and briefings. Please contact your usual Eversheds Sutherland contact for access.

Our pay transparency masterclass training course is designed to support companies with their pay transparency readiness and to provide a comprehensive understanding of how the requirements of the Directive translate into practical actions. Using our unique 10 step roadmap towards compliance, this course will guide delegates through the essential considerations at each stage, to equip them with the knowledge to progress projects towards compliance and to identify and manage risk areas along the way.

The press release of the Federal Labour Court Judgment of 23 October 2025 – 8 AZR 300/24 can be found at Anspruch auf Entgeltdifferenz wegen Geschlechtsdiskriminierung - Paarvergleich - Das Bundesarbeitsgericht. See also our briefings on the previous cases of Baden-Württemberg Regional Labour Court (LAG) of 19 June 2024 - 4 Sa 26/23 and Baden-Württemberg Regional Labour Court (LAG) of 1 October 2024 - 2 Sa 14/24.