Latest developments regarding the Pay Transparency Directive: Expert Commission presents final report

The implementation of the EU Pay Transparency Directive in Germany is gaining pace - now is the right time for forward-looking preparation

With the submission of the Expert Commission’s final report to the Federal Minister for Gender Equality Karin Prien on 7 November 2025, the starting signal for legislative implementation has been given in Germany. The Directive must be adopted into German law by 7 June 2026 - less than eight months away. 

If companies start preparing now, they will gain a valuable advantage and will be able to implement the Directive’s requirements in a structured and well-thought-out way. The tensions between employers and employees highlighted in the report also suggest that the final legislation could be much stricter than the economy had hoped. Companies should therefore not wait any longer, but should start making the necessary preparations now.

Task and Composition of the Expert Commission

The Directive was passed at European level in 2023 and must be implemented into German law by 7 June 2026. In addition to pay transparency during the recruitment process, the key requirements of the Directive include the right for employees to request information on pay and mandatory pay gap reporting for all companies with at least 100 employees.

In the 2025 coalition agreement, Germany’s governing parties agreed to “transpose the Pay Transparency Directive into national law with a minimum of bureaucracy.” To achieve this goal, Federal Minister for Gender Equality Karin Prien appointed an independent Commission of eleven experts in July 2025. The Commission comprised representatives from German employers' associations, important umbrella organisations of social partners, as well as the German Women Lawyers Association, the German Bar Association, and scientists with expertise in European and national labour law and economics. The final report was published on 24 October 2025 and presented to the Minister on 7 November 2025.

The report clearly highlights the tensions between the goal of reducing bureaucracy and the effective enforcement of equal pay. The numerous dissenting opinions illustrate the fundamental conflicts of interest in the national implementation of the Directive in Germany.

Key Recommendations of the Commission

Reporting obligation (Art. 9 of the Directive)

The majority of the Commission consider that actual remuneration is the decisive basis for the Directive’s reporting obligation. However, individual Commission members and some business experts who were consulted prefer a reporting obligation based on target remuneration.

The Commission proposes that the reporting obligation should not extend to employers with fewer than 100 employees, and that employers should only be required to provide the information in text form as part of their reporting obligation.

Privileges for employers bound by collective agreements

The majority of the Commission favours a presumption of adequacy and the introduction of a step-by-step model for employers bound by collective agreements. Comparison groups should initially be formed on the basis of pay scale groups defined in collective agreements, with adjustments only being necessary if it can be shown that the grouping defined in the collective agreement does not comply with Article 4(4) of the Directive (i.e. based on objective, gender-neutral criteria).

Right to information (Art. 7 of the Directive)

The majority of the Commission recommends limiting information disclosure to the total amount of gross remuneration paid in the previous year, broken down into gross annual remuneration and gross hourly remuneration, without breaking it down into individual remuneration components.

The broad majority of the Commission considers it appropriate and in line with EU law that every employee can request information once a year about the previous calendar year.

The majority of the Commission does not consider that the ‘prohibition of deterioration’ in Article 27 of the Directive (i.e. that the protections in the Directive cannot be weakened) requires the disclosure of median value in addition to average remuneration levels.

Digitalisation and support

The Commission unanimously agrees that the possibility of digitisation or automation will vary greatly depending on the employer and the HR system used. The Commission considers it appropriate to provide various tools that comply with the requirements of the Directive, e.g., to support job evaluation and the formation of comparison groups, and to provide standardised reporting templates.

Controversial positions

Position of the employers' associations (BDA, VdU)

The BDA criticises the Directive itself for promoting bureaucracy and confusing fairness with legally mandated egalitarianism. Collective pay agreements, arising from collective bargaining, require unrestricted protection from state control. Furthermore, the presumption of appropriateness is non-negotiable. Any subsequent control of existing collective bargaining evaluation and remuneration systems constitutes an inadmissible interference in the collective bargaining partners' scope for action under collective bargaining law.

Position of the employee representative organisation (DGB)

In the opinion of the DGB, the upcoming legislative process should focus on the goal of enforcing the principle of equal pay for equal work and work of equal value for men and women. The final report contains many proposals that are incompatible with the requirements of the Directive and are likely to weaken the analysis and enforcement mechanisms of the Directive, in particular the reporting obligations and joint pay assessment.

Although the Directive clearly does not exclude collective bargaining standards from the requirements of equal pay, the Commission's proposals are aimed precisely at excluding collective bargaining standards.

Take action now

Now is the right time for companies to take action. The publication of the final report marks the transition from discussion towards concrete legislation. Those who use the coming months to prepare systematically will be well-placed to implement the new requirements in a much more efficient and cost-optimised way, than in a rushed process shortly before or after the law comes into force. 

Failure to implement the Directive in a legally compliant and timely manner could become costly and time-consuming for legislators and companies. Companies may face individual lawsuits, and the Federal Republic of Germany may face the risk of legal proceedings before the European Court of Justice.

Practical Recommendations: 

• Create a roadmap: Keep an eye on the implementation deadline of 7 June 2026, and define internal milestones—the remaining months should be used for structured preparation.
• Conduct an inventory: Review your existing remuneration structures now and identify any potential need for action before the legal requirements are finalised.
• Prepare reporting requirements: Companies with 100 or more employees should establish the necessary data structures and processes for future reporting.
• Check technical infrastructure: Evaluate digital tools and standardised templates for implementation—early system adaptation avoids time pressure later on.
• Utilise collective bargaining agreements: If collective bargaining agreements apply, actively pursue the development of a presumption of appropriateness and strategically plan for possible privileges.
• Establish information processes: Develop processes for employee information requests now and ensure they are legally compliant—this will help you avoid ad hoc reactions after the law comes into effect.