As we reported in our post of 17 February 2017, the Remuneration Transparency Act will come into force on 1 July, giving employees limited rights to information about their co-workers' pay.
In operations with more than 200 employees, individual employees will have a right to request information regarding the median average pay of a minimum of 6 employees of the opposite gender in comparable positions. A definition of comparable work will be introduced for this purpose. The request can cover information about the average income of co-workers in comparable positions, broken down by the monthly base salary and 2 additional salary components, such as bonus payments or company car entitlements.
The right to information may be exercised by each employee every 2 years (every 3 years within the first 3 years after the Act comes into force), through the works council or by approaching the employer directly. The information must be given to the employee within 3 months of the request. In addition, the mechanism for calculating the remuneration must be shared with the employee.
The current draft bill is not entirely clear as to whether the right to information applies where there are more than 200 employees in the company (legal entity) or only where there are more than 200 in the operation/establishment, but it is more likely that it applies to the legal entity. If it applies to operations this will depend on what exactly is meant by operations, since there are different definitions depending on the area of law.
- Companies with more than 500 employees are "encouraged" to implement a regular audit to determine any pay gap and if necessary develop countermeasures but there is no legal obligation to do this.
- Companies with more than 500 employees which are required to publish management reports have to report about their measures to ensure equality and equal pay and their effects every 3 years (5 years if collective bargaining agreements are in place).
Gender equality rules already apply through the Anti-Discrimination Act introduced in 2006. Employees who suffer from pay discrimination are already able to claim for damages. However, the Transparency Act will increase the administrative burden, in particular for larger companies with more than 200 employees, given that each employee has an individual claim to information about comparable remuneration.