Delayed Implementation of the Pay Transparency Directive—What Already Applies
- Ines Analytics GmbH
- 3 days ago
- 3 min read
Germany has missed the deadline for transposing the EU Pay Transparency Directive on 8 June 2026. This delay is causing uncertainty for employers. The EU is sending clear signals that the directive will not be renegotiated. A spokesperson for the relevant Ministry of Family Affairs announced that the German legislation is due to come into force in early 2027. For many companies, it is unclear what applies at present, what obligations they will face and when, and how they can best prepare.
What businesses need to know now: the current legal situation
Even without a German law transposing EU Directive 23/970, the legal framework for businesses will change on 8 June 2026: the right to equal pay for work of equal value is enshrined in the Treaty on the Functioning of the European Union (TFEU). The German Pay Transparency Act (EntgTranspG) also already guarantees this principle in a binding manner. Under EU law, national courts must interpret existing laws in the light of applicable EU directives, i.e. they must rule in accordance with the directives. Employees can already take legal action to demand that valid provisions are implemented in line with the EU Pay Transparency Directive. For companies, there is a risk that labour courts may rule in accordance with the new directive even before it is implemented in Germany. In previous implementation processes, the Court of Justice of the European Union (CJEU) and the Federal Labour Court (BAG) have confirmed this interpretative practice.
What obligations does the Directive already impose?
Which provisions of the Pay Transparency Directive are already being implemented in practice through the courts depends on existing legislation: if there is a corresponding provision in the Pay Transparency Act, the new EU Directive is used to interpret it. Reporting obligations for companies, the planned joint assessment of pay gaps with employee representatives, or their involvement in the development of pay structures are not yet legally required in Germany. As Germany is delaying
the implementation of the Directive, companies still have some time to prepare for these tasks.
However, the principle of equal pay for work of equal value and the right of employees to information are already enshrined in the TFEU and the EntgTranspG respectively. The EU Pay Transparency Directive builds on these provisions and provides specific details on practical implementation, which courts can already draw upon. According to the Directive, the principle of equal pay is to be put into practice through objectively justified and non-discriminatory pay structures. Existing rights to information are being expanded so that, in future, employees will be entitled to information on how their salary compares to average pay levels, broken down by gender.
Remuneration schemes as a starting point: a challenge for many
The new legislation on pay transparency does not aim to eliminate pay differences between employees. However, it requires companies to provide transparent justifications, based on objective criteria, for differences in pay between different roles. Fair remuneration systems therefore form the core of the new EU legislation. For many companies, this poses a problem: in order to revise their remuneration structures in line with the law, they need criteria and methods for job evaluation, a job architecture and a systematic pay structure. Roles must be defined, posts assessed and their relative values determined.
This takes time and resources. One uncertainty remains: is the result compliant with the law?
INES Analytics offers tailor-made solutions for all the requirements of the new legislation. Our tools are legally compliant, data protection-compliant and scientifically sound. Best of all, they are simple to use. We have developed a job evaluation system that automates the assessment of tasks. Using your employees’ DEÜV codes, we categorise the tasks within your organisation into groups of equal work and and work of equal value. We can tailor the results to your company’s specific circumstances. This provides you with a well-founded analysis of your current remuneration structure. As a result, you will be prepared for all the requirements that companies will face from 2027 onwards.
Transparent and objective pay systems form the basis for fair remuneration structures. Our tools help you to establish job evaluation systems in line with the EU Pay Transparency Directive – enabling you to report on the gender pay gap and all relevant indicators in compliance with the law. Book a non-binding demo now and find out more: |
Sources:
Legal Tribune Online Richtlinie zur Gehältertransparenz gilt auch ohne deutsches Gesetz
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