A major shift in how employers handle salaries is coming. The EU Pay Transparency Directive (Directive 2023/970) must be implemented into German law by June 7, 2026.
It’ll give you the right to know what your colleagues earn, and the right to see a salary range before you even sit down for a job interview.
What is the EU Pay Transparency Directive?
The EU Pay Transparency Directive was adopted on May 10, 2023. The goal is to strengthen equal pay for equal work between men and women. The directive introduces pay transparency and enforcement mechanisms to reduce the gender pay gap.
How the gender pay gap changed over the years in Germany ->
However, this new directive will also make it difficult for the companies to exploit expats by paying them less than their German counterparts.
Wage gap between Germans and expats in Germany ->
Germany already has a pay transparency law (EntgTranspG). But it has major gaps. The EU Directive tightens the existing Pay Transparency Act.
What changes for you as an employee in Germany?
- You will know the salary before the interview: You (the job applicant) will be entitled to information about the starting salary or pay range before the interview. In addition, the employer is not allowed to ask about your current salary.
- You can ask what your colleagues earn: Employees can request information about their individual pay level and the average pay of their comparison group, broken down by gender.
- Pay secrecy clauses become invalid: The clause that prevents you from discussing your salary with colleagues will no longer be valid.
- The burden of proof shifts to your employer: Today, proving pay discrimination is your problem. Under the new rules, if your employer does not comply, they have to prove they did nothing wrong.
- Compensation for discrimination has no cap: Workers who suffer gender-based pay discrimination are entitled to full compensation, without a fixed upper limit. Such compensation includes
- back pay,
- related bonuses or payments in kind,
- compensation for lost opportunities,
- non-material damage,
- plus interest.
What changes for employers in Germany?
- Salary ranges in job ads: Every job posting must include a starting salary or salary range. This applies to all employers, public and private, regardless of size.
- Regular pay gap reporting: Companies with more than 250 employees will be required to report annually. Companies with 100–249 employees will be required to report every three years. Companies with fewer than 100 employees will not be required to report. The first reports for employers with 150 or more employees are due in June 2027, covering 2026 pay data.
- The 5% trigger rule: If an employer’s pay gap analysis reveals an unjustified gender pay gap of at least 5% within a group of workers doing equal or equivalent work, the employer must conduct a joint pay assessment together with employee representatives (the Betriebsrat). This is not optional.
- Works councils gain more power: Germany’s works councils will gain a stronger formal role in pay audits, joint assessments, and follow-up measures when gaps are identified.
What does this mean for expats?
The Directive applies to all workers with an employment contract or employment relationship under national law, including part-time, fixed-term, and agency workers, as well as trainees and apprentices. Your nationality does not matter.
- When you apply for your next job in Germany, you will see a salary range in the job posting.
- Your employer cannot ask what you earned in your previous role. It doesn’t matter whether that was in Germany or abroad.
- You’ll can request information on what colleagues in comparable roles earn, broken down by gender.
- If you suspect you are being underpaid relative to colleagues doing the same work, the legal framework for challenging that will be substantially stronger than it is today.
English-speaking lawyers specialized in labor law ->
Prepare now if you believe you are underpaid
The new law is expected to be implemented in 2026, with rights available in 2027.
If you believe you are currently underpaid relative to colleagues in a comparable role, document your case now. The new law will make it easier to claim compensation.
You can check the official Directive text at EUR-Lex.
