Companies operating exclusively in Germany and groups of companies operating exclusively in Germany

The right to information of individual employees (as well as individual job applicants) is a legal right under labour law. The territorial principle applies to the domestic legal provisions implementing the requirements of Art. 5 et. seq. EUPTD on the right to information. The right to information is initially assessed according to the law applicable to the employment relationship. If the employment contract does not contain a choice-of-law clause, the right to information in the case of a company operating exclusively in Germany will be governed by the EntgeltTG.

The legal requirements regarding reporting obligations to be observed following the implementation of Art. 9 EUPTD into domestic law relate to public labour law and oblige employers who are subject to the reporting obligations (= in the case of 1:1 implementation of the EUPTD into domestic law, all employers with at least 100 regularly employed workers, regardless of their legal form) to publish the aforementioned remuneration (transparency) data. Depending on the number of employees, the first reports must be published by 7 June 2027 (≥ 150 employees) or 7 June 2031 (≥ 100 employees).

The law applicable to the reporting obligation also follows the legal territorial principle. The decisive factor here is the employer's registered office (as specified in its articles of association), and for companies operating exclusively in Germany, the reporting obligations arise from the domestic EUPTD implementation regulations.

The statutory reporting obligations also follow the legal entity principle. Individual employers are subject to the statutory reporting obligation in their legal entity, and the specific requirements for the reporting obligation are assessed in accordance with the provisions of Article 9 EUPTD, as amended by domestic law, solely on the basis of the relevant (quantitative) data of the individual employer. In the case of a group of companies operating exclusively in Germany, this means that, in the event of a 1:1 implementation of the EUPTD requirements into domestic law, the number of regularly employed workers is assessed exclusively on the basis of each individual employer legal entity and, in particular, there is no group-related allocation of workers from individual (subsidiary) companies to the individual group (parent) company.

The following example 1 illustrates these legal guiding principles for the reporting obligation: Hamburg Aronia Holding GmbH (HAG), based in Hamburg, is the parent company of the Hamburg Aronia Group (HAG Group). It regularly employs 80 employees. Another group company is Hamburg Aronia Vertrieb GmbH (HAV), based in Hamburg (100 employees). In the event of a 1:1 implementation of Art. 9 EUPTD into the EntgeltTG, HAG is not subject to the statutory reporting obligation; in particular, the employees of HAV are not to be included in the assessment of whether the threshold of at least 100 regularly employed employees has been exceeded. HAV is subject to the statutory reporting obligation from 2031 onwards in the event of a 1:1 implementation and must validate the relevant reportable data (solely) from among its own employees.

In light of the transparency purpose of the reporting obligation, the denial of attribution is also likely to apply to (group) companies that operate individual businesses as joint operations under labour law. In addition, according to the provisions of Article 9 EUPTD, the data relevant for reporting must also refer to the individual employer legal entities and, therefore, in the event of a 1:1 implementation of the EUPTD requirements into domestic law, no group-wide reporting is to be carried out. The reporting obligation under the EUPTD thus differs significantly from the reporting obligations under the CSRD, which generally provide for (partial) group reporting.

With all companies based in Germany and foreign branches

The legal basis for the individual employee's right to information is also assessed in this case according to the applicable law.

If the employment contract does not contain a choice of law clause, the applicable law must be determined in accordance with the statutory provisions of Art. 8 (2) to (4) of Regulation 593/2008/EU (Rome I Regulation).

To illustrate the possible scenarios in this case group, example 1 is continued in example 2: In addition to its (statutory) headquarters in Hamburg, HAV operates branches in Norway (Oslo) and Morocco (Marrakesh).

If the employment relationship is carried out in the relevant branch in another EEA country, the right to information is assessed in accordance with the domestic legal provisions of the country of activity implementing the provisions of Art. 5 et seq. EUPTD (Art. 8 (2) and (3) Rome I Regulation). Countries outside the EEA are not subject to the scope of the EUPTD and are therefore not required to implement the provisions of Art. 5 et seq. EUPTD into domestic law.

Specifically in example 2: The employee working at the HAV branch in Oslo can assert the right to information under Art. 7 EUPTD. The employee working at HAV's branch in Marrakesh has no right to information, as Morocco, as a non-EEA country, is not covered by the scope of the EUPTD and therefore does not have to enact any domestic legal provisions corresponding to Art. 5ff. EUPTD.

If the employment contract contains a choice of law clause, the legal basis for the right to information is assessed in accordance with the law specified in the employment contract in accordance with Art. 8 Rome I Regulation.

In view of the legal entity principle, the reporting obligations in this case group are also governed by domestic law. All employees of domestic and foreign branches (including branches in non-EEA contracting states) must be included in the respective report.

Specifically in example 2: HAV must take into account all employees and their data from the Hamburg, Oslo and Marrakesh branches for the reporting obligation.

In accordance with Art. 9 EUPTD (and in the case of 1:1 implementation in domestic law), the remuneration data must be prepared cumulatively for the individual legal entity; a differentiated presentation of the remuneration data according to domestic and foreign branches is not required from a legal perspective, but is possible on a voluntary basis.

With the parent company based in Germany and other group companies based in EEA countries

The legal basis for the individual employee's right to information is also determined by the law applicable to the employment relationship.

If the employment contract does not contain a choice of law clause, the applicable law must be determined in accordance with the statutory provisions of Art. 8 (2) to (4) of Regulation 593/2008/EU (Rome I Regulation).

To illustrate the possible scenarios in this case group, example 2 is continued in example 3: The HAG Group also includes Hamburg Aronia Polska Sp.z.o.o. (HAP), based in Warsaw. HAP regularly employs 300 people, 50 of whom work at its branch in Berlin.

The legal basis for the individual employee's right to information is assessed in accordance with the territorial principle under the law of the relevant state in accordance with Art. 8 Rome I Regulation. This applies to all employees, regardless of whether the employer is based in Germany or in another (EEA/non-EEA) country.

Specifically in example 3: The employee working for HAP in Warsaw may assert the right to information under the Polish implementing law transposing Article 7 EUPTD. The employee working at the HAP’s branch in Berlin may assert the right to information under the German EntgeltTG.

If the employment contract contains a choice of law clause, the legal basis for the right to information is assessed in accordance with the law specified in the employment contract in accordance with Art. 8 of the Rome I Regulation.

The reporting obligations also arise in accordance with the legal entity principle under the law applicable to the individual legal entity.

Specifically in example 3: HAV must comply with the reporting obligation in accordance with the German implementation law for the EUPTD, and HAP must comply with the reporting obligation in accordance with the Polish implementation law. HAP and HAV must each only take into account the employees working for them, and in this respect, the employees working at HAP's Berlin branch must only be included in HAP's Polish reporting.

With the parent company headquartered in Germany and individual other group companies headquartered in non-EEA countries

The legal basis for the individual employee's right to information is also determined by the law applicable to the employment relationship.

If the employment contract does not contain a choice of law clause, the applicable law must be determined in accordance with Art. 8 (2) to (4) of the Rome I Regulation.

To illustrate the possible scenarios in this case group, example 3 is continued in example 4: The HAG Group also includes Hamburg Aronia Dubai LLC (HAD), based in Dubai. HAD regularly employs 270 people, 10 of whom work at its branch in Berlin.

The legal basis for the individual employee's right to information is determined in accordance with the territorial principle under the law of the relevant state pursuant to Article 8 Rome I Regulation. This applies to all employees, regardless of whether the employer is based in Germany or abroad (EEA/non-EEA).

Specifically in example 4: The employee working for HAD at its headquarters in Dubai has no right to information, as the UAE, being a non-EEA country, does not fall within the scope of the EUPTD and therefore has no domestic legal regulations corresponding to Art. 5 et seq. EUPTD. Employees working at HAD's branch in Berlin may assert their right to information under the EntgeltTG, provided that this – as expected – also applies to employees in Germany working for an employer based in a non-EEA country and no deviating effective choice-of-law clause has been agreed.

If the employment contract contains a choice-of-law clause, the legal basis for the right to information is determined according to the law specified in the employment contract in accordance with Art. 8 Rome I Regulation.

The reporting obligations arise with regard to the legal entity principle in accordance with the law applicable to the individual legal entity.

Specifically in example 4: HAD is not required to prepare a report in accordance with Article 9 of the EUPTD, as the UAE, being a third country outside the EEA does not fall within the scope of the EUPTD and therefore does not have to enact any domestic legal regulations corresponding to Article 9 of the EUPTD. No report in accordance with Article 9 EUPTD.

The legislative procedures for transposing the provisions of the EUPTD into domestic law are currently still at the procedural stage in most EEA countries (for a current overview of the status quo in the individual Member States, see also our regularly updated FAQ).

Companies, particularly those operating within cross-border group structures, will have final clarity on the specific applicable law for the right to information and reporting obligations once the respective legislative procedures in the relevant Member States have been completed. The final remuneration governance for the legally compliant and, at the same time, needs-based implementation of the information and reporting obligations must then be carried out with the necessary legal diligence. We will continue to provide practical updates on the progress of the respective legislative procedures.