Germany faces EU penalty over gender pay gap directive

Many people continue to earn less than others for the same job — often because of their gender. This is illegal, but difficult to prove. The EU Pay Transparency Directive, which takes effect across the European Union this month, is supposed to help make sure workers earn equal pay for the same job.

The new rules are designed to put more pressure on employers to ensure there is equal pay within their workforce. But Germany — the EU's largest, strongest, and most populous economy — has missed the June 7 deadline to implement the directive.

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The pay gap between men and women in Germany remains an issue despite legal requirements to eliminate it. According to the German Federal Statistical Office, the adjusted gender pay gap was 6% in 2025, with women earning less than men in the same position and with the same qualifications.

The EU Pay Transparency Directive was introduced "to strengthen the application of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms." Once it takes effect, the idea is that employees should be able to request information to find out whether they are being paid unfairly for equivalent work and employers will be required to eliminated unjustified pay gaps.

The law relies on three mechanisms: The right to request information, gender pay gap reporting for larger companies, and joint pay assessments.

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On May 6, the German government approved a bill to amend the General Equal Treatment Act (AGG) on the recommendation of German Education Minister Karin Prien, whose portfolio includes women's affairs, and Justice Minister Stefanie Hubig. The aim was to incorporate the EU's requirements into German law.