EU pay transparency directive in Germany

By Christian Steinmetz and Maren Siegels

Short answer: The EU Pay Transparency Directive (Directive (EU) 2023/970) had to be transposed into national law by 7 June 2026, and Germany missed that deadline. According to the federal government's latest statement of 16 July 2026, there was not yet a draft bill agreed between ministries, and it gives no timetable (status: October 2026). Until transposition, the existing Pay Transparency Act (Entgelttransparenzgesetz, EntgTranspG) continues to apply: an individual right to information in establishments with, as a rule, more than 200 employees, and a report for employers with more than 500 employees that must prepare a management report. The directive itself provides for the first pay gap report by 7 June 2027 for employers with 150 or more employees (Article 9).

This article is for HR leaders, employment lawyers and general counsel in Germany, with a section on Switzerland. It explains the obligations under the directive, where implementation of the pay transparency directive in Germany stands, and what employers can prepare now.

Obligations under the directive

The directive requires employers to be transparent at four stages: before hiring, when setting pay, on request by employees and through regular reporting. The obligations below are taken from the text of the directive; how Germany will implement them is still open.

Before employment (Article 5): applicants receive information on the starting pay or its range. Employers may not ask about pay history. Job advertisements and job titles must be gender-neutral.
Pay setting (Article 6): employers make the criteria for pay, pay levels and pay progression easily accessible; the criteria must be objective and gender-neutral. Member States may exempt employers with fewer than 50 employees from the pay progression part.
Right to information (Article 7): employees can request in writing information on their own pay and on average pay levels, broken down by sex, for comparable categories of workers. The answer is due within two months at the latest. Employers inform staff of this right every year. Contract terms that prevent employees from disclosing their pay must be prohibited.
Pay gap report (Article 9): employers report, among other things, the gender pay gap, the median gap, variable components and pay quartiles. Management confirms the accuracy of the report after consulting workers' representatives.
Joint pay assessment (Article 10): required if the report shows a difference of at least 5 % in a category of workers that is not objectively justified and not remedied within six months.

Obligation	Threshold	Deadline under the directive
Information on starting pay; no questions on pay history (Art. 5)	all employers	on national transposition (deadline was 7 June 2026)
Make pay and progression criteria accessible (Art. 6)	all employers; exemption for pay progression possible below 50 employees	on national transposition
Information on request; annual notice of the right (Art. 7)	all employers	answer within two months
Pay gap report (Art. 9)	250 or more employees	first by 7 June 2027, then every year
Pay gap report (Art. 9)	150 to 249 employees	first by 7 June 2027, then every three years
Pay gap report (Art. 9)	100 to 149 employees	first by 7 June 2031, then every three years
Pay gap report (Art. 9)	fewer than 100 employees	voluntary
Joint pay assessment (Art. 10)	reporting employers with an unexplained gap of 5 % or more	if not remedied within six months of the report

The full text is available as Directive (EU) 2023/970 on EUR-Lex. How the German implementing act will handle the 2027 reporting date is open: no draft setting German reporting deadlines has been published (status: October 2026).

Where implementation in Germany stands

Germany missed the transposition deadline of 7 June 2026. As of October 2026, no ministry draft bill has been published and no cabinet decision has been taken. On 16 July 2026 the federal government stated that there was not yet a draft agreed between ministries (Bundestag document 21/7026).

Expert commission: the commission on implementing the directive with minimal red tape submitted its final report on 7 November 2025.
Federal government: on 16 July 2026 it stated that a draft bill with minimal red tape had been prepared, that individual questions were still being clarified and that the legislative process would start afterwards. It gave no timetable.
Current law: until transposition, the EntgTranspG applies. The individual right to information exists in establishments with, as a rule, more than 200 employees (Section 12(1) EntgTranspG). A report on equality and equal pay is required from employers with, as a rule, more than 500 employees that must prepare a management report (Section 21 EntgTranspG). National law must be interpreted in line with the directive.

Austria has not transposed the directive on time either; a draft is being coordinated within the government there. Groups with entities in several EU countries therefore benefit from a common data standard that can later be adapted to national laws.

What employers should prepare now

Employers with 150 or more employees should not wait for the German act: the data basis, job evaluation and processes need lead time. The following steps make sense whatever the details of implementation.

Collect data: combine pay components, working time, sex and role for all employees in one auditable data set.
Define comparator groups: evaluate same work and work of equal value using objective, gender-neutral criteria, and document the method.
Analyse gaps: calculate differences per group, test objective reasons and prioritise gaps of 5 % or more.
Publish criteria: write down the rules for grading, pay rises and promotions so that employees can follow them.
Adjust recruitment: prepare pay ranges for job advertisements, remove pay history questions from interview guides and use neutral job titles.
Review contracts: identify and replace clauses that bar employees from talking about their pay.
Set up the information process: define owners, templates and a two-month deadline for answers.
Involve committees: involve the works council early and plan management sign-off of the report.

Employers that already have more than 200 employees in an establishment can use the existing EntgTranspG information procedure as a test run.

Switzerland: equal pay analysis under the Gender Equality Act

Switzerland has no pay transparency directive; instead the Gender Equality Act requires an equal pay analysis. Employers with at least 100 employees at the start of the year, not counting apprentices, must carry out an equal pay analysis and repeat it every four years; if pay equality is shown, the duty to repeat it lapses (Articles 13a–13g GlG).

Review: an independent body reviews the analysis – a licensed audit firm, an organisation under Article 7 GlG or an employee representation.
Information: employees must be informed of the result in writing no later than one year after the review.
Time limit: the provisions apply from 1 July 2020 to 30 June 2032. On 16 June 2026 the Council of States rejected a parliamentary initiative to remove the time limit by 23 votes to 18. The Federal Council will present its evaluation report in 2027.

Groups with entities in both countries can use one pay data set but must check the thresholds separately: 100 employees in Switzerland, and 100, 150 and 250 employees under the directive.

Roles and capacity

Pay transparency is a project across HR, legal and compliance. Typical roles are a project lead, pay and data analysis in HR, employment lawyers for job advertisements, contracts and works council matters, and compliance for governance, controls and documentation.

Example (assumption): project plan for 400 employees

A manufacturing company with 400 employees plans twelve months until its first report: three months for the data basis and job evaluation, three months for analysis and justification of differences, three months for processes, job advertisements and contract changes, and three months of buffer for committees and sign-off. For the legal work it plans one employment lawyer at 50 % for around six months.

Alpinum Solutions provides employment lawyers, legal counsel and compliance professionals for such projects through Arbeitnehmerüberlassung (German temporary agency work, staff leasing) or freelancing, part-time or full-time. For agency work Alpinum holds the licence of the Hesse Regional Directorate of the Federal Employment Agency; the client company directs the work. How employment law capacity is planned for larger programmes is covered in restructuring and redundancies: planning employment law capacity.

Limits and risks

As long as the German act is missing, thresholds, deadlines and sanctions in Germany are not fixed. Preparations should be designed so that they can be adapted.
Pay analysis involves sensitive employee data. Access rights and data protection need to be settled before the analysis starts.
Responsibility for the report and the pay system lies with senior management. Interim professionals prepare and implement but do not decide on pay.
Alpinum is not a law firm and does not provide legal advice.

Frequently asked questions about the pay transparency directive

Does the directive already apply directly?

For private employers, the existing EntgTranspG with its current thresholds continues to apply until transposition. It must be interpreted in the light of the directive. Under settled CJEU case law, a directive has no direct effect between private employers and employees. The principle of equal pay, however, already applies directly under Article 157 TFEU. Employers should therefore plan with the directive's requirements in mind, but not anticipate duties that the German act may still change.

Which companies must report?

Under the directive, employers with 250 or more employees report first by 7 June 2027 and then every year, and employers with 150 to 249 employees first by 7 June 2027 and then every three years. Employers with 100 to 149 employees follow by 7 June 2031. In Germany, the current reporting duty under Section 21 EntgTranspG still applies to employers with more than 500 employees that prepare a management report.

When will the new German pay transparency act come?

No date has been set. As of October 2026 there is neither a published ministry draft nor a cabinet decision. On 16 July 2026 the federal government said that a draft bill with minimal red tape had been prepared and that the legislative process would start once individual questions were resolved. It gave no timetable.

May employers still ask about previous salary?

The directive prohibits employers from asking applicants about their pay history (Article 5(2)). In Germany this ban has not yet been written into law. Employers revising their recruitment process anyway can drop the question now and state a pay range for the role instead.

What applies to companies in Switzerland?

The EU directive does not apply in Switzerland. Under the Gender Equality Act, employers with at least 100 employees must carry out an equal pay analysis, have it reviewed independently and inform employees within one year of the review (Articles 13a–13g GlG). The analysis must be repeated every four years unless pay equality is shown. The duty is limited until 30 June 2032.

Next step

If you are preparing your pay system for the directive and need employment law or compliance capacity, talk to us about your requirements. Selected profiles are usually available within 48 hours; the start date is agreed jointly by the company and Alpinum.

Last updated: 30 October 2026.

EU pay transparency directive: what it means for employers in Germany