Pay Transparency Compliance Checklist: Preparing for the EU Directive in Germany
The EU Pay Transparency Directive changes how every employer in the EU handles pay: employees can request pay-level information, job ads must state pay or a pay range, asking candidates about salary history is prohibited, and employers above certain headcounts must report their gender pay gap on a recurring schedule. Germany is transposing the directive into national law, layering it on top of the existing German Pay Transparency Act (EntgTranspG).
For international companies, the trap is assuming this is a future problem. The data work — building job categories, defining objective pay criteria, measuring and explaining gaps — takes many months, and any unexplained gap above 5% triggers a mandatory joint pay assessment. The checklist below sequences the preparation so the first report and the first information requests hold up.
Your checklist
- 1Assess applicability: identify which group entities employ staff in the EU and map them against the phased reporting thresholds (starting at 100 employees) and the timeline for first reports.
- 2Build comparable job categories: group roles performing the same work or work of equal value using objective criteria such as skills, effort, responsibility and working conditions.
- 3Run a full pay audit: measure the gender pay gap per category across all pay components — base salary, bonuses, allowances and benefits in kind.
- 4Explain or fix gaps above 5%: document objective, gender-neutral justifications for differences, and budget corrections where no justification exists.
- 5Define and document pay-setting criteria: write down how starting pay, raises and promotions are decided, so future decisions are defensible.
- 6Update recruiting: add pay levels or ranges to job postings and remove all salary-history questions from applications and interviews.
- 7Prepare the information-request process: define who answers employee pay-information requests, in what format, and within which deadline.
- 8Align with employee representatives: brief works councils early — they are your counterpart in any joint pay assessment.
- 9Set up recurring monitoring: recalculate the gap at least annually so drift is caught before the next reporting cycle.
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Pay Transparency Auditor → Check now for freeFrequently asked questions
When do the reporting obligations start and for whom?
The directive phases in gap reporting by employer size, beginning with employers of 250 or more workers, followed later by those with 150 and then 100 or more. Employers below 100 workers have no periodic reporting duty, but the employee information right and job-ad transparency rules apply to employers generally.
What counts as 'pay' for the gap analysis?
All consideration for work: base salary plus variable and complementary components such as bonuses, overtime supplements, allowances and benefits in kind. Analyzing base salary alone is not sufficient — gaps often hide in variable pay, which is precisely what the directive targets.
We already comply with the German Pay Transparency Act. Is that enough?
Not on its own. The existing German Pay Transparency Act (EntgTranspG) established an individual information right, but the EU directive goes further: pay information in job ads, a salary-history ban, broader reporting duties, the 5% joint-assessment trigger and a reversed burden of proof. Treat EntgTranspG compliance as a starting point, not the finish line.