Job-Seekers Gain New Leverage as Germany Misses EU Pay Transparency Deadline

Asking a candidate about their salary history will soon be off-limits in Germany. Under the EU Pay Transparency Directive, employers must disclose the starting salary or salary range before the first interview. The regulation was supposed to be national law by June 7, 2026, but Germany missed that deadline — and still has no draft bill in sight.

The legal vacuum creates immediate pressure on both public and private employers. State-sector organisations have been directly bound by the EU rules since June 8. Private companies face a stricter judicial interpretation of existing laws, including the German Pay Transparency Act and the General Equal Treatment Act. Legal experts expect a national law no earlier than early 2027.

Burden of Proof Reversal Changes the Game

The directive’s sharpest innovation shifts the burden of proof in discrimination cases. If an employer cannot show it met its transparency obligations, it must prove in court that no pay discrimination occurred. That overturns the previous system, where the employee carried the burden.

This shift follows two key rulings from the Federal Labour Court. In October 2025, the court ruled that comparing a worker to just one higher-paid colleague can establish a presumption of disadvantage. A February 2026 ruling clarified that workers can request salary data only for the last completed calendar year and only within their own business unit, not the whole company.

What Employers Must Disclose Now

For existing employees, access to information is expanding. Workers can ask for the average pay of colleagues in the same or equivalent role. For new hires, the preamble to the interview now requires a salary band — and the ban on asking about previous earnings takes effect immediately.

Company-wide reporting obligations kick in from June 2028, staggered by size: businesses with 100 or more employees will need to report. If the gender pay gap exceeds five percent and cannot be objectively justified, the employer must conduct a joint pay review with workers’ representatives.

Apprentices and Special Payments Also Affected

The directive uses a broad definition of “worker” that includes apprentices. Employers who differentiate pay by training occupation must have an objective justification ready.

A fresh analysis by the WSI research institute highlights a persistent pay-equity blind spot: special payments such as holiday bonuses. Between May 2025 and May 2026, only 44 percent of private-sector employees received holiday pay. The gender gap is stark — 49 percent of men but only 38 percent of women got the payment. Coverage skyrockets under collective agreements: 73 percent in unionised workplaces versus 35 percent in non-union ones.

ECJ and BGB Principles Add Legal Uncertainty

The European Court of Justice tightened the rules further on June 11, 2026. In company transfers, outstanding wage claims pass automatically to the new owner; employee consent is not required. Member states may also impose joint liability on the seller and buyer.

Even Germany’s principle of good faith (Section 242 of the Civil Code) could now be invoked. It may allow individual pay requests in small companies that previously fell below the statutory thresholds for transparency duties.

What the Delay Means for Companies

With no national implementing law, courts are instructed to interpret the Pay Transparency Act and the General Equal Treatment Act in line with the EU directive. That creates legal risk for employers who do not voluntarily adjust their pay structures now.

Italy, Malta and Slovakia have already passed national laws. Germany faces a potential infringement procedure from the European Commission. Lawyers advise firms to audit their compensation systems now to minimise exposure to equal-pay lawsuits and the new reversed burden of proof.

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