Many people earn less than others for the same work – often because of their gender. It is illegal, but difficult to prove. The EU Pay Transparency Directive, which will take effect across the EU this month, will help ensure that workers earn equal pay for equal work.
The new rules are designed to put more pressure on employers to ensure there is equal pay within their workforce. But Germany – the EU’s largest, strongest and most populous economy – has missed the June 7 deadline to implement the directive.
Gender pay gap persists in Germany
The pay gap between men and women remains an issue in Germany despite legal requirements to eliminate it. According to the German Federal Statistics Office, the adjusted gender pay gap was 6% in 2025, with women earning less than men in the same position and with the same qualifications.
The EU Pay Transparency Directive was introduced “to strengthen the application of equal pay between men and women for equal work or work of equal value through pay transparency and enforcement mechanisms”. Once it comes into effect, the idea is that employees should be able to request information to find out if they are being paid unfairly for equivalent work and employers will be required to eliminate unfair pay differences.
The law relies on three mechanisms: the right to request information, gender pay gap reporting for large companies, and joint pay evaluation.
German government’s bill ‘doesn’t go far enough’
On 6 May, the German government approved a bill to amend the General Equal Treatment Act (AGG) on the recommendation of German Education Minister Karin Prien, whose portfolio includes women’s affairs, and Justice Minister Stefanie Hubig. Its purpose was to incorporate EU requirements into German law.
“This is an important step towards putting into practice our commitment to greater equality and effective action against discrimination,” Preen said. However, he faced accusations that he had capitulated to the business lobby by warning “not to impose unnecessary burden on government agencies and businesses and to keep the processes as simple as possible”.
“The most significant change is that any person affected by discrimination will now have four months instead of two to decide whether they wish to make a claim in accordance with the AGG,” Habig said in introducing the amendment. But apparently this has not convinced the European Commission.
The EU’s Pay Transparency Directive requires transparency from the start of the application process, obliges employers to take corrective action in cases of significant pay gaps, and shifts the burden of proof from the employee to the employer. In future, employers will have to provide proof that they are working as per the law.
Will Germany get a warning letter from Brussels?
“As soon as it is established that a member state has failed to implement a directive, the Commission can initiate infringement proceedings,” Matthias Ruffert, a lawyer and professor at Humboldt University of Berlin, told DW over email. “But it is not necessary to do this.” He said that in the event of a procedure proceeding, a Member State would receive a letter of formal notification, after which a reasoned opinion could be given.
Then, according to Elie Cavignaux of the German Institute for International and Security Affairs (SWP), matters could escalate. “If the European Commission still fails to file a lawsuit, the European Parliament can sue the Commission for inaction.”
So theoretically Germany could get a warning letter from Brussels, and it wouldn’t be the first time. The European Commission has previously stepped in when Germany failed to incorporate EU directives into national law on time or did so incorrectly.
The most serious case so far is related to the matter of whistleblower protection. In 2025, Germany was fined €34 million ($39 million) after failing to implement a 2019 EU directive to protect whistleblowers, which was to be incorporated into national law by 2021. Germany’s Whistleblower Protection Act only comes into effect in 2023.
The Commission is likely to try to reach an agreement with Berlin
“Since the Treaty of Lisbon, the Commission has been able to file infringement actions as well as request the imposition of penalty payments for failure to transpose directives,” Cavignaux said. “The European Court of Justice sets out in its judgment the exact starting date for payment and the amount of the fine.”
“However, before filing a lawsuit, the Commission regularly tries to reach an agreement with the Member State concerned so that the directive can be implemented as quickly as possible,” he explained. “Necessarily, failure to timely implement a directive will not automatically or immediately result in a judgment against the federal government.”
This article was originally published in German.