Germany has implemented a new law targeting pay inequality between men and women. The Pay Transparency Act (Entgelttransparenzgesetz or "PTA") prohibits differences due to gender in pay for equal work or work of equal value. Any person who is discriminated against can claim the same salary as a comparable employee of the other gender.
Female and male employees do work of "equal value" if they can be considered to be in a comparable situation regarding their work. The type of work, the qualification requirements for the job and work conditions must be comparable.
The essential new feature of the PTA is the ability to request information—in operations with more than 200 employees, individual employees will be entitled to request information about the criteria and the procedure by which the employer determines salaries, with respect to both their own salary as well as the salary of members of the other gender working in a comparable job.
The ability to claim information exists only if there are at least six employees of the other gender working in a comparable position.
Employers should carefully prepare any response to such information requests. The main consequence of not providing an answer is that the burden of proof switches to the employer if the employee files a lawsuit claiming equal salary. A proper response can avoid this procedural disadvantage for the employer.
With this new law, Germany for the first time has introduced a statutory disclosure obligation with regard to pay differences based on gender. This is especially important because Germany otherwise does not permit discovery and pre-trial disclosure. Companies will have to think strategically about proactive or reactive disclosure and will have to review their compensation models.