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Germany: Government Proposes Law to Reduce Gender Pay Gap

(Jan. 18, 2017) On January 11, 2017, the German government agreed on a draft act that aims to ensure equal pay for work of equal value for women and men in the same workplace. (Gesetzentwurf der Bundesregierung, Entwurf eines Gesetzes zur Förderung der Transparenz von Entgeltstrukturen [Draft Act of the Federal Government, Draft Act to Promote Transparency in Pay Structures] (Jan. 11, 2017), Federal Ministry for Family Affairs, Senior Citizens, Women, and Youth website.)

Current German law forbids discrimination in pay on the basis of gender, among other categories. The draft act would provide the following measures to promote transparency in pay structures:

  • prohibition of direct or indirect pay discrimination based on gender and provision of a legal definition of “equal work or work of equal value” and other concepts in connection with “equal pay” (id. §§ 3, 4, & 7);
  • the legal right of an individual employee to request information on the company’s fixed basic gross salary and on one or two salary components, in companies with more than 200 workers (id. §§ 10 & 12);
  • enhanced rights of the Worker’s Council to enforce the employee’s right to information (id. §§ 13, 14, & 15);
  • encouragement of employers with more than 500 employees to put measures in place to regularly audit the pay structures to ensure equal pay (id. § 17); and
  • obligation of employers with more than 500 employees to provide regular updates on the status of measures to promote equality in general and wage equality between men and women or explain why there are no such measures in place, with publication of the reports as an attachment to the company’s management report (id. §§ 21 & 22 ¶ 4).

Next Procedural Steps 

The federal government forwarded the draft act to the Bundesrat for discussion. The Bundesrat, the constitutional body through which the German states participate in the legislative process, generally has six weeks to debate draft legislation.  After the six weeks have passed, the federal government will forward the draft act, along with the comments of the Bundesrat, to the German Bundestag (parliament) for discussion.  (Basic Law for the Federal Republic of Germany (May 23, 1949), BGBl. I at 1, as amended, art. 76 ¶ 2, GERMAN LAWS ONLINE (unofficial English translation).)