(Low-bureaucracy) implementation of the Pay Transparency Directive (EUPTD): The Commission's final report of 24 October 2025

1. The extended right to information (on pay): Consistent and complete data system

a) Status quo: The right to information on pay according to Sections 10ff. EntgeltTG 1.0

(1) Section 10 of the current version of EntgeltTG 1.0 grants employees an individual right to information for the purpose of verifying compliance with the principle of equal payvis-à-vis employers with regularly more than 200 employees (Section 10 (1) EntgeltTG 1.0).

(2) The persons specified in Section 5 (2) EntgeltTG 1.0, i.e. in particular employees and persons employed for vocational training purposes, are entitled to information. Job applicants are not entitled to information.

(3) The right to information must be asserted against the works council if a works council is elected (Sections 14 (1), 15 (2)  EntgeltTG 1.0) regardless of whether the employer is bound by or applies collective agreements, and against the employer in all other cases (Sections 14 (3), 15 (1) EntgeltTG 1.0). The employer is not obliged to actively inform the employee about the right to information and its legal framework.

(4) In terms of content, the right to information refers to the remuneration of the comparable activity of the employee making the claim, which extends to all employees of the opposite sex with the same or equivalent activity (Section 10 (1) sentence 2 EntgeltTG 1.0). The employee making the claim must reasonably specify the relevant comparative activity in their claim for information; without such a specification, there is no claim and the claimant cannot ask for information about a comparative activity in their claim for information.

The specific requirements for the comparative job are set out in Section 4 (1) and (2) EntgeltTG 1.0, according to which 

• an equal job is an identical or similar job, and
• an equivalent job is a job that can be considered to be in a comparable situation based on a number of factors.

For the assessment of the same/equivalent activity, Section 4 (2) sentence 2 EntgeltTG 1.0 specifies a catalogue of standard examples, according to which the factors to be taken into account include, among other things, the type of work, the training requirements and the working conditions.

(5) In order to fulfil the employee's right to information, the employer must, within three months of the claim being made, provide the employee – or, in the case of application of collective bargaining agreements to the relevant employment and elected works council, the works council – with the statistical median of the average gross monthly remuneration and up to two individual remuneration components relating to the remuneration of employees of the opposite sex. (Sections 10 (1) and (2), 11 (3) sentence 2, 15 (3) EntgeltTG 1.0).

If the employer considers the comparative activity specified by the employee to be not equal or equivalent according to the standards applied in the company, it must provide a comprehensible justification for this based on these standards and refer the information to the activity that it considers to be equal or equivalent (Section 15 (4) sentence 1 EntgeltTG 1.0).

If the comparative activity covers fewer than six employees of the opposite sex, the employer may refuse to provide the information on the grounds of data protection, citing the (too) small cohort of persons (Section 12 (3) EntgeltTG 1.0).

The information must be provided in writing or in text form.

(6) The employee making the claim may, in principle, submit the request for information every two years; in exceptional cases, a follow-up request may be submitted before the expiry of this waiting period if the conditions relating to the same/equivalent work have changed significantly (Section 10 (1) sentence 2 EntgeltTG 1.0).

(7) If the remuneration information provided reveals a gender-related pay gap, this shall be considered, according to the latest understanding of the German Federal Labour Court (Bundesarbeitsgericht, BAG) in its judgement of 23 October 2025 (8 AZR 300/24), as an indication of gender-related pay discrimination (Section 22 of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG) and, in order to avoid a labour court ruling ordering the employer to pay the difference in remuneration to the employee making the claim, the employer must present objective reasons (e.g. in relation to performance or responsibility) that justify the different levels of remuneration.

b) The requirements of the EUPTD and the Commission's proposals for implementation into EntgeltTG 2.0

(1) In addition to employees in an employment relationship, job applicants are also entitled to information (Art. 5 EUPTD).

(2) All employers are obliged to provide information, regardless of the size of the company.

(3) Employees can assert their right to information either against their employer, against the employee representative body within the company, or against the inter-company equal treatment body (Art. 7 (2) EUPTD). The Commission states that if the claim is asserted via the works council, the latter should merely act as a transmission agent (‘messenger’) without bearing any responsibility for the content of the information.

The employer must actively inform the employee annually about the right to information and its legal framework.

(4) The right to information relates to the remuneration for the comparable activity of the employee making the claim, which extends to all employees of the opposite sex with the same or equivalent activity (Art. 7 (1) EUPTD).The assessment of the same or equivalent work should be based on the following factors: skills, stress, responsibility and working conditions (Art. 4 (4) EUPTD). In individual cases, additional criteria may be taken into account if relevant and justified (Recital 26 EUPTD).

(5) The information provided must relate to individual pay levels and average pay levels (broken down into gross annual pay and the corresponding gross hourly pay) and must be broken down by gender (Art. 7(1), 3(1)(b) EUPTD). The information must include all components of remuneration. The Commission recommends that (i) the information should contain a transparent and comprehensible explanation of how the comparison group was formed in order to avoid queries from employees making claims and thus reduce the administrative burden, (ii) only active employees should be taken into account and employees who have left the company should not be included in the formation of comparison groups, and (iii) the information should (only) contain information on the total gross remuneration paid in the previous year (actual remuneration), broken down into gross annual remuneration and corresponding gross hourly remuneration, and no further differentiation should be made according to individual remuneration components in order to avoid complexity and bureaucracy. For employees covered by collective agreements/collective agreements, the right to information should be limited (only) to notification of the applicable collective agreement pay group.

The EUPTD does not contain any quantitative limitation of the right to information with regard to comparable employees of the opposite sex. The Commission proposes to retain the previous threshold of Section 12 (3) sentence 1 EntgeltTG 1.0 (at least six employees of the opposite sex) in EntgeltTG 2.0.

The employer must provide the information within two months (Art. 7 (4) EUPTD).

According to Art. 7(1) EUPTD, the information must be provided in writing. If implemented 1:1 in domestic law, this formal requirement would include a handwritten signature (wet signature) on the information documentation. The Commission correctly argues that the obligation to provide information can also be fulfilled appropriately in text form.

(6) The EUPTD does not contain any time limit for the repeated assertion of the right to information. The Commission proposes that the right to information can be asserted at most once a year and expires three years after it arises in order to ensure legal certainty for employers. 

(7) Member States should take appropriate measures in their domestic implementation legislation to ensure that the right to information on pay is enforceable in court and, when asserting claims for payment arising from unjustified gender-related pay gaps, take into account the gender-related pay gap in the distribution of the burden of proof in favour of the employee making the claim (Art. 14 et seq. EUPTD).

The Commission proposes to regulate the consequences of the pay transparency reports for the burden of proof and presentation in legal disputes concerning gender-related pay gaps in EntgeltTG 2.0, whereby a pay gap of less than 5% documented in the pay transparency report should be sufficient to refute the appearance of gender-related pay discrimination.

2. Extended reporting requirements: More companies, shorter cycles and more detailed information

a) Status quo: Reporting requirements under Sections 21 et seq. EntgeltTG 1.0

(1) Employers with generally more than 500 employees are required to report if they are obliged to prepare a management report in accordance with Sections 264 and 289 of the German Commercial Code (Handelsgesetzbuch, HGB) (Section 21 (1) EntgeltTG 1.0). This essentially applies (only) to corporations and partnerships with legal entities as shareholders.

(2) The reporting cycle depends on the collective agreement situation: employers bound by or applying collective agreements must report every five years. Employers not bound by collective agreements are required to report every three years with a three-year reporting period.

(3) Employers must present the content of their measures to promote gender equality and their effects in the reports, as well as their measures to achieve equal pay for women and men. The report must also include information broken down by gender (1) on the average total number of employees and (2) on the average number of full-time and part-time employees.

b) The requirements of the EUPTD and the Commission's proposals for implementation in the EntgeltTG 2.0

(1) According to Art. 9 EUPTD, employers with generally more than 100 employees are now required to report, regardless of their legal form or accounting obligations.

For employers with fewer than 100 employees, the introduction of a reporting obligation by the Member States may be made optional (Article 9(5) EUPTD). The Commission recommends that this option shall not be used.

(2) The reporting frequency is determined solely by the size of the workforce: Employers with more than 250 employees are subject to an annual reporting obligation, and employers with between 150 and 249 employees are subject to a three-year reporting obligation, whereby this obligation will not apply to employers with up to 149 employees until 7 June 2031 (at the latest).

(3) From now on, the content of the report shall include the following detailed information, which is based on systematic data collection: (1) the gender pay gap, (2) the gender pay gap for supplementary or variable components, (3) the average gender pay gap, (4) the average gender pay gap for supplementary or variable components, (5) the proportion of employees receiving supplementary or variable components, (6) the proportion of employees in each pay quartile, (7) the gender pay gap between employees in groups of employees, broken down by normal basic pay or salary and by supplementary or variable components (cf. Art. 9(1)(a) to (g) EUPTD).

With regard to form and presentation, the Commission recommends explicitly limiting the reporting obligation to text form (Section 126b of the German Civil Code (Bürgerliches Gesetzbuch, BGB). In order to avoid redundant obligations, harmonisation with existing sustainability and reporting obligations, in particular the CSRD, is also suggested. In addition, the Commission advocates extensive standardisation of reports through digital templates and automated evaluation options, for example via a central monitoring body. However, the certification of certain software tools is rejected by a majority in order to avoid barriers to innovation and not to restrict the market. To reduce the administrative burden, the establishment of secure, automated transmission channels for reports is also advocated, for example via existing systems such as DATEV interfaces. 

One focus of the Commission's statements is the clarification of the term ‘remuneration’ in the context of reporting requirements. The majority of the Commission is in favour of using the remuneration actually paid (actual remuneration) as a basis rather than a target or target remuneration. In principle, all remuneration components should be included in the calculation. However, remuneration components that are not linked to work performed during the reporting period (e.g. severance payments) and low-value benefits in kind or minor remuneration (e.g. discounted canteen meals) are to be excluded. Benefits that are not granted by the contractual employer, such as certain share option programmes, may also be excluded.

The Commission also recommends using the gross annual remuneration (for the previous year) as the key reference value, differentiating only between basic remuneration on the one hand and all supplementary and variable remuneration components on the other. A more detailed breakdown of all remuneration components and the disclosure of the median value should not be mandatory. In addition, gross hourly remuneration should be disclosed, with the Commission predominantly advocating that this be based on the contractually agreed working hours. The calculation should be based on full-time equivalents. In order to avoid distortions (particularly with regard to the 5% limit in Article 10(1) of the EUPTD), the Commission also advocates allowing indicators to be reported separately for each country of employment; this specifically applies to EU foreign branches/establishments without legal personality.

Further, the majority of the Commission is in favour of separately considering employees covered by collective agreements and those not covered by collective agreements in order to be able to identify any pay differences more precisely and evaluate them appropriately.

Finally, the Commission clarifies that, for the calculation of the gender pay gap, both the average and the median gender pay gap must be determined on the basis of the actual gross annual pay and the corresponding gross hourly pay. Referring to target or reference pay is considered problematic under EU law and impractical.

3. (New) Participation and involvement rights of the works council

a) Status quo: Participation rights of the works council in the context of pay analysis and pay transparency

(1) The works council's right of co-determination may initially arise from Section 87 (1) No. 6 of the German Works Constitution Act (Betriebsverfassungsgesetz, BetrVG), insofar as the performance of pay analyses requires the use of technical equipment designed to monitor the behaviour or performance of employees. This is particularly the case if the employer uses software-based HR tools or personnel management systems to analyse pay structures. According to the case law of the BAG, the introduction and use of such systems is subject to comprehensive co-determination, regardless of whether there is an intention to monitor (see only BAG, decision of 23 October 2018 – 1 ABR 36/18).

(2) In addition, the works council has rights of inspection, evaluation and information arising from Section 80 (1) no. 2 and no. 2a BetrVG and Section 13 EntgeltTG 1.0. According to Section 13 (2) and (3) EntgeltTG 1.0, the works council is entitled to inspect and evaluate the remuneration lists, whereby the presentation must be separated by gender and include all remuneration components.

However, the scope of this right of inspection and evaluation is not unlimited. The BAG has clarified that the right of inspection and evaluation under Section 13 (2) sentence 1 EntgeltTG 1.0 requires that the works council be responsible for responding to individual requests for information. If the employer assumes responsibility for fulfilling the requests for information, the works council's right of access and evaluation does not exist under this provision (BAG decision of 28 July 2020 – 1 ABR 6/19).

Irrespective of this, however, the works council retains the general right to information and notification under Section 80 (1) BetrVG, which entitles it to request from the employer the information necessary for it to perform its duties. This general right to information can be particularly important if specific participation rights under the EntgeltTG do not apply or are restricted.

b) The requirements of the EUPTD and the Commission's proposals for implementation into EntgeltTG 2.0

The EUPTD gives employee representatives a greater role in the ongoing implementation and monitoring of pay transparency instruments. The participation of employee representatives is no longer merely ancillary to individual rights to information, but extends comprehensively to structural processes of pay analysis, reporting and – in the event of identified imbalances – remedial measures.

(1) To this end, the co-determination rights of the works council pursuant to Section 87 (1) No. 6 BetrVG remain of central importance even under the EUPTD. This applies in particular if the employer expands existing HR systems or introduces new software solutions to collect, evaluate or process personal remuneration data in order to comply with the new transparency and reporting obligations. The implementation of pay gap analyses will regularly require the redrafting or adaptation of existing works agreements on data processing. In such cases, the works council must be fully involved, as this involves the use of technical equipment that is at least abstractly capable of monitoring the behaviour or performance of employees.

(2) In addition, the EUPTD provides for an extension of the rights of employee representatives to inspect and obtain information. According to Art. 9 (6) EUPTD, employee representatives must be involved in the preparation and provision of pay transparency reports. The reports must be made available to them and they must check them for accuracy. As a result, corresponding pay analysis tools must grant rights of access to the calculations, taking into account data protection requirements.

The Commission states in this regard that Article 9(6) EUPTD does not provide for equal participation of employee representatives. Rather, participation should be limited to a hearing on the accuracy of the information. The works council is then given the opportunity to review the information contained in the report and address any discrepancies with the employer, but without bearing any responsibility for the content, structure or methodology of the report.

(3) If the pay transparency report identifies a gender-specific pay gap of at least 5% that is not justified by objective, gender-neutral criteria, employers are obliged to discuss and implement appropriate measures to eliminate this gap together with employee representatives (Article 10 EUPTD). The EUPTD does not contain any provisions on the possible (maximum) duration of the remedial procedure.

The Commission states that in companies with an elected works council/staff council, this council constitutes the appropriate employee representative body for conducting these discussions. The Commission also states that in cases where no works council has been elected in a company, it is not necessary to establish a new representative body or to set up a state authority or equal treatment body. With regard to the requirements of Article 10 EUPTD on discussing the pay gap, the majority of the Commission's members believe that this should include that such a discussion procedure does not have to be carried out in companies without a works council; individual Commission members propose that the workforce elect representatives.

With regard to the duration of the remedial procedure, the Commission proposes not to impose any time limits, but (only) to urge employers to initiate the discussion and remedial procedure with the employee representatives promptly after the publication of the pay transparency report.

4. Further recommendations of the Commission

The other recommendations of the Commission in the final report include:

(1) Regulation of a catalogue of examples of justifiable reasons for unequal treatment, which also contains regulations on the preservation of acquired rights for relevant agreements/other circumstances that were agreed upon before 7 June 2026.

(2) Clarification in EntgeltTG 2.0, as the objective gender-neutral criteria for job evaluation are job-related criteria (= suitability, ability, performance, skills, workload, etc.), while the objective gender-neutral criteria for justifying gender-specific pay differences are person-related or person-referable (e.g. local differences, market conditions).

(3) Provision of standardised information forms by the BMBFSFJ on the internet, which employers can use voluntarily.

5. Recommendations for action and outlook

Even though concrete national implementation is still pending, the statements in the Commission's final report already outline the main guidelines for future regulation.

Employers should therefore – unless they have already begun to do so in the last two calendar years 2024/2025 in accordance with prevailing market practice – take stock of their remuneration structures and critically review their existing data collection, processing and evaluation processes before the first draft of the EntgeltTG 2.0 is published. Particular attention should be paid to the comparability of activities, the documentation of remuneration determination mechanisms and the IT-based mapping of remuneration structures. The introduction or adaptation of appropriate HR systems should be carried out at an early stage with the involvement of the works council in order to avoid conflicts relating to co-determination rights and associated delays in implementing the requirements of the EntgeltTG 2.0 in the employer’s own remuneration systems.

It is advisable to consider future reporting obligations and rights to information in context rather than in isolation. Remuneration transparency reports, individual requests for information and possible joint remuneration assessments are interlinked and can trigger follow-up obligations and participation processes, especially in the event of identified pay gaps. A clear internal distribution of responsibilities, standardised processes and prepared communication concepts can help to limit the administrative burden and reduce legal risks.