Frankfurt am Main – On Equal Pay Day on November 4th, IG Metall is calling for a rapid and employee-friendly implementation of the EU Pay Transparency Directive.
This must be implemented into national law by the beginning of June 2026. In a few days, on November 7th, the responsible commission will hand over its report to the Ministry of Family Affairs. The directive aims to eliminate the pay gap between men and women. There is already a legal basis for this in the form of the Pay Transparency Act, but employee representatives are still observing a lack of commitment and refusal on the part of employers.
IG Metall sees the fact that the Pay Transparency Act needs to be revised on the basis of the EU directive as an opportunity. “There must finally be clarity and fairness regarding pay in the company. We have found that the more rights the employees have here, the easier it is to close the pay gap. The role of the union and the works council should therefore be the focus in the legislative process,” demands the first chairwoman of IG Metall, Christiane Benner. “Co-determination is crucial for justice, this also applies to the principle of ‘equal money for equal work!’”
Women in Germany still earn less than men, even if they do the same work or work of equal value according to objective criteria. Structural reasons such as a higher proportion of part-time workers, often not voluntarily, career breaks for family reasons, but also gender stereotypes ensure that women still earn 16 percent less on average than men. In the metal and electrical industry, however, with good collective agreements and often co-determined companies, it is only 10 percent.
The EU Pay Transparency Directive provides for an extension of the existing right to information to all employees. In addition, it creates new obligations to analyze the pay scale and a report on the pay gap. In addition, there should also be an obligation on employers to actively eliminate the pay gap. The EU Pay Transparency Directive provides for close involvement of employee representatives.
These requirements must not be watered down in the national legislative process under the pretext of implementing them with little bureaucracy. IG Metall will work towards this both operationally and politically.
FURTHER INFORMATION: WHAT DOES THE POLICY PROVIDE?
Objective and gender-neutral compensation structures: Employers must implement gender-neutral and transparent compensation structures that ensure equal pay for equal work or work of equal value. Objective, gender-neutral criteria agreed with employee representatives must be used.
Obligation to provide information in the application process: Employers must provide applicants for an open position with information about the starting salary or salary range and the applicable collective bargaining regulations for the position in question.
Obligation to provide information about pay criteria: Every employer, regardless of the size of the company, must inform all employees of their own initiative about the criteria for determining pay levels, the individual pay components and pay developments.
Individual right to information: Employees are entitled to information about their own pay as well as the average pay of employees who do the same work or work of equal value (broken down by gender). The employer must inform employees annually about their right to information.
Reporting obligation on the pay gap: Employers with 100 or more employees must report on the gender pay gap. To do this, they must provide specific information: the pay gap in average and median pay and the individual pay components as well as the pay gap within the individual groups of employees who perform the same or equivalent work. Companies with 250 or more employees must report annually from June 7, 2027. The information must be communicated to an authority to be determined, which will publish it.
The employee representatives must be involved in determining the criteria for determining the same or equivalent work and in determining the groups of employees. You will be heard about the report and have access to certain additional information. You also have the right to inquire about the data provided. Some of the information must also be communicated to employees, who also have the right to inquire. If an unexplainable gap is identified, the employer must eliminate the gap within a reasonable period of time in cooperation with the employee representatives.
Joint pay assessment: If a pay gap of more than 5 percent is found in one of the employee groups that is not justified or could not be eliminated within six months, the employer must carry out a joint pay assessment in collaboration with the employee representatives. To do this, among other things, the proportion of men and women, the average pay and the pay gap must be determined for each group and the reasons for the gap and corrective measures must be determined. The remedial measures should be carried out in collaboration with employee representatives.
Enforcement mechanisms: Employees are entitled to equal pay for equal work and work of equal value as well as a claim for damages or compensation. In order to enforce the claims, a facilitation of evidence should be introduced. Further sanctions such as fines can be introduced for violations of transparency obligations.