Frankfurt am Main – On Workplace Pay Equity Day on November 4, IG Metall is calling for a swift and worker-friendly implementation of the EU Pay Transparency Directive.
It must be transposed into national law by early June 2026. To this end, the responsible commission will submit its report to the Ministry of Family Affairs in a few days, on November 7. The directive aims to eliminate the pay gap between men and women. A legal basis for this already exists in the Pay Transparency Act, but employee representatives still observe a lack of commitment and a resistant attitude on the part of employers.
IG Metall views the need to revise the Pay Transparency Act based on the EU directive as an opportunity. “There must finally be clarity and fairness regarding pay in the workplace. Our experience has shown that the more rights employees have in this area, the easier it is to close the pay gap. The role of unions and works councils should therefore be a focal point in the legislative process,” demands IG Metall President Christiane Benner. “Co-determination is crucial for fairness, and this also applies to the principle of ‘equal pay for equal work!’”
Women in Germany still earn less than men, even when they perform the same or equivalent work according to objective criteria. Structural factors—such as a higher rate of part-time work (often involuntary), family-related career breaks, and gender stereotypes—mean that, on average, women still earn 16 percent less than men. In the metal and electrical industries, however, where there are strong collective bargaining agreements and companies often have co-determination, the gap is only 10 percent.
The EU Pay Transparency Directive provides for an expansion of the existing right to information to all employees. In addition, it establishes new obligations to analyze pay structures and prepare a report on the pay gap. Furthermore, employers will be required to actively eliminate the pay gap. The EU Pay Transparency Directive provides for close involvement of employee representatives.
These requirements must not be watered down in the national legislative process under the pretext of streamlining bureaucracy. IG Metall will advocate for this both at the workplace and at the political level.
FURTHER INFORMATION: WHAT DOES THE DIRECTIVE PROVIDE FOR?
Objective and gender-neutral pay structures: Employers must implement gender-neutral and transparent pay structures that ensure equal pay for equal or equivalent work. In doing so, they must use objective, gender-neutral criteria agreed upon with employee representatives.
Duty to Provide Information During the Application Process: Employers must provide applicants for a vacant position with information regarding the starting salary or salary range and the applicable collective bargaining agreements for the position in question.
Obligation to Provide Information on Pay Criteria: Every employer, regardless of company size, must, on their own initiative, inform all employees about the criteria used to determine pay levels, the individual components of pay, and pay trends.
Individual Right to Information: Employees have the right to information regarding their own pay as well as the average pay of employees performing the same or equivalent work (broken down by gender). The employer must inform employees annually of their right to this information.
Reporting Requirement on the Pay Gap: Employers with 100 or more employees must report on the gender pay gap. To do so, they must provide specific information: the pay gap in average and median pay and in individual pay components, as well as the pay gap within individual employee groups performing the same or equivalent work. Companies with 250 or more employees must report annually starting June 7, 2027. The information must be submitted to an authority yet to be designated, which will publish it.
Employee representatives must be involved in establishing the criteria for determining the same or equivalent work, as well as in defining the groups of employees. They must be consulted regarding the report and have access to certain additional information. They also have the right to request clarification regarding the data provided. Some of this information must also be disclosed to employees, who likewise have the right to request clarification. If an unexplained pay gap is identified, the employer must eliminate the gap within a reasonable period of time in cooperation with employee representatives.
Joint Pay Assessment: If a pay gap of more than 5 percent is identified in any employee group—and this gap cannot be justified or eliminated within six months—the employer must conduct a joint pay assessment in cooperation with employee representatives. To this end, the proportion of men and women in each group, the average pay, and the pay gap must be determined, and the reasons for the gap as well as remedial measures must be identified. The remedial measures are to be implemented in cooperation with employee representatives.
Enforcement mechanisms: Employees are entitled to equal pay for equal and equivalent work, as well as to damages or compensation. To enforce these claims, a relaxation of the burden of proof is to be introduced. Additional sanctions, such as fines, may be imposed for violations of transparency obligations.
