Pay transparency: How to prepare for the reporting obligation
What the EU directive specifically requires and how to spot an unexplained pay gap in time.
The right to information applies immediately
The EU Pay Transparency Directive (2023/970/EU) enters into force in stages. Regardless of company size, once transposed into German law: employees have the right to receive information about the average pay level for comparable work — broken down by gender.
Staggered reporting obligations by company size
- 250+ employees: first reporting obligation from 2027 (every 3 years)
- 150+ employees: reporting obligation from 2031
- 100+ employees: reporting obligation from 2031
- Under 100 employees: no regular reporting obligation, but the right to information applies
Smaller companies with fewer than 100 employees are exempt from the regular publication obligation. However, employees' right to pay information applies to all employers without exception.
The 5 percent threshold: when it gets serious
The 5 percent threshold is central: if a gender pay gap of more than 5 percent exists and cannot be explained by objective, gender-neutral criteria, a joint pay assessment with the employee representatives is mandatory.
Reversed burden of proof: transparency as a shield
In a dispute, the burden of proof is reversed: the employer must prove that there is no violation of the equal pay principle. Without clean documentation of pay structures, this is practically impossible — and litigation risks rise considerably.
New rules for job postings
Applicants will have the right to receive information about the initial pay level or pay range of the advertised position before applying. Employers may also no longer ask applicants about their previous salary.
What you should do now
Analyze your pay structure now. Identify potential pay gaps and document the reasons for differences in compensation. The Pay Transparency Auditor helps you prepare a pay report and close gaps before employees or authorities take action.
Frequently asked questions
What is the difference between the right to information and the reporting obligation?
The right to information applies to all employees once the directive is transposed: they can request information from their employer about the pay level for comparable work. The reporting obligation (regular publication of a pay transparency report) only applies above certain thresholds and at defined points in time.
What data must go into the pay transparency report?
At a minimum, you must collect and publish: the gender pay gap (median and mean), broken down by pay components (base salary, bonuses, special payments) and by categories of work. In addition, the proportion of employees by gender per category must be stated.
Does the directive also cover compensation components such as bonuses?
Yes. The transparency obligation extends to all pay components — base salary, variable compensation, bonuses, allowances, and benefits in kind. The aim is to uncover hidden unequal treatment through bonus schemes.
Can job postings still appear without salary information in the future?
No. Applicants have the right to receive information about the initial pay level or pay range before applying. Employers must either state this in the posting or make it accessible in another way. Asking about the previous salary is prohibited.