July 17, 2017
Authored by: Martin Lüderitz
Although Germany faces next elections in September, the current government still establish new employment law acts, inter alia the new Act to Promote Transparency of Pay Structures (Entgelttransparenzgesetz) which came into effect July 6 2017.
In an effort to advance pay equity between men and women who perform the same work or work of equal value, the new act will allow employees, starting after January 6 2018, to claim for information about their pay structures and impose reporting obligations on particular companies.
Companies who employ more than 200 employees may face claims for information about
- the average of monthly gross salary of at least six colleagues of the other gender who perform the same work or work of equal value,
- information about up to two remuneration components (e.g. bonus), and
- the criteria and procedure for the determination of the remuneration.
Companies which do not provide the requested information within three months are at risk to be deemed to act discriminatory and to may be suited for paying the difference to the salaries of comparable employees.
Besides, employers with more than 500 employees are obligated to implement operational review procedures and safeguards to ensure their compliance with equal pay