In early January, the German government agreed a law aimed at ensuring pay equality between men and women in order to close the gender pay gap. Dependent on which calculation methods are adopted, the gender pay gap in Germany ranges from 7 to 22 %.
However, the law is not yet in force as it needs to pass parliament and Germany’s second chamber, the chamber of states. The law requires legal entities with more than 200 employees to provide information to women, in three year intervals, about comparable male colleagues’ base salary and any variable or extra payments.
Legal entities with more than 500 employees will also be required to introduce measures to check pay structures to ensure equal pay between the genders. They will also be obliged to report on progress.
Statistics say that the new law will affect 14 million employees. Critics say that it will increase bureaucracy on the one hand and, on the other, that there is no penalty for enforcement. In addition, in the majority of legal entities, i.e. those below the above thresholds, employees will not be covered by the law so that it covers approximately no more than 60 % of all female employees.