In the last legislative period, the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth committed to nothing less than closing the so-called “Gender Pay Gap”. According to the evaluation of the Ministry, this gap would amount to up to 21% with regard to the gross hourly salary (BT-Drs. 18/11133, 18). For this purpose, after lengthy disputes regarding legal policy and legal doctrine, the Act on Salary Transparency (Entgelttransparenzgesetz, EntgTranspG) was decided, which entered into force on 6 July 2017 and came into full effect as of 6 January 2018.

Core of the Regulation

The cornerstone of the legal re-regulation is a claim for information of the employee vis-à-vis the works council or, in special constellations, vis-à-vis the employer, which has been standardized in Section 10 EntgTranspG. It has been possible to assert this claim for information since 6 January 2018 (see Section 25 (1) sentence 1 EntgTranspG). By doing so, en passent, the works council is also strengthened, since it is equipped with additional access rights to the salary structure system of the company.

However, this claim does not exist in every employment relationship and in relation to random peer groups.

On the one hand, the information claim only exists in companies with regularly more than 200 employees at the same employer. Smaller and mid-sized companies are, therefore, not affected by the re-regulation.

The claim refers to the criteria and the procedure to determine the salary as well as information on the salary for comparable work. It is therefore decisive what “comparable work” means. The employee has to expressly name this in text form vis-à-vis the works council or employer respectively. Pursuant to Section 10 (1) EntgTranspG, “comparable work” is “identical or equivalent” work. It can, therefore, constitute a great challenge for the applicant to name identical work. Apart from piecework on assembly lines where each employee performs standardized, repetitive movements, it will probably be difficult to name such “identical work”. Factors such as the type of work, qualifications and working conditions play a more important role here. These are factors that allow for a greater scope and can therefore be more easily named by employees.

If the information is subsequently refused, this will lead to a favourable procedural advantage for the employee. Pursuant to Section 15 (5) EntgTranspG, there will be a reversal of the burden of proof. In this respect, the employer will have to prove in an action that there is no violation of the equal pay requirement laid down in Section 4 (4) EntgTranspG.

If a discrimination is found after the information has been provided, the person affected has several options. On the one hand, the respective employment contract could be re-negotiated and a respective compensation amount could be agreed for the time that has elapsed. But there is also the opportunity to seize the courts. If this is indeed gender discrimination, pursuant to Section 15 (2) Equal Treatment Act, it is possible to claim the performance that has been withheld, i.e. lack of salary, and the respective employment contract can be concluded in a non-discriminatory manner. 

This individual information claim is accompanied by a salary check for companies with regularly more than 500 employees pursuant to Section 17 EntgTranspG. These should regularly check the equal pay requirement and, in doing so, in particular pay attention to special salary regulations, various salary components and their application and adjust the regulations in the company if required.

Outlook

However, the practical implications remain unclear. On the one hand, it is not possible to predict how many employees will actually assert the information claim or even enforce it in court, since many employees shy away from such a procedure against their own employer. On the other hand, the bureaucratic effort, in particular in relation to the salary assessment procedure, is high for the companies affected. For this reason, hardly any companies will want to help the “target regulation” of Section 17 EntgTranspG to be applied. Consequently, there are still many obstacles in the way of real equal treatment. The first evaluation of the federal government which his expected for two years after enforcement of the regulation, can therefore be highly anticipated.

Christof Kleinmann, Lawyer, Accredited Specialist in Employment
Dr. Christoph Gerhard, Trainee