Pay Transparency Directive: No implementing legislation

The EU Pay Transparency Directive should have been transposed into German law by 7 June 2026. However, no corresponding implementing legislation has been introduced to date – and, as things stand, none is expected in the near future. According to the German government, implementation is likely to be further delayed, partly due to the economic burden on businesses.

For employers, this raises the key question of whether the existing law or the requirements of the Pay Transparency Directive already apply. The short answer is: simply carrying on as before is legally risky. Even without an implementing law, the Directive already has implications for the design and justification of remuneration systems.

Consequences of the lack of implementation

Even though an implementing law for the Pay Transparency Directive has not yet been enacted, the Directive is already having an indirect effect. National courts are obliged to interpret existing German law in accordance with EU law. This means that the requirements of the Directive – particularly regarding equal pay and transparency – are already being factored into labour court rulings where regulations require interpretation.

Furthermore, individual provisions of the Directive may have direct effect on public sector employers, meaning that public sector employees could already invoke the relevant rights.

For private employers, the practical consequence is primarily that the requirements for justifying pay differences have been tightened by case law. In future, pay decisions must be made even more consistently on the basis of objective, transparent and gender-neutral criteria and, in the event of a dispute, must be able to be substantiated accordingly.

What is the current situation in Germany?

Until a national implementing law comes into force, the current legal situation in Germany remains formally in place. Of particular relevance is the Pay Transparency Act, which already prohibits direct and indirect pay discrimination and provides for an individual right to information – albeit limited to date.

This is supplemented by the General Equal Treatment Act, which prohibits discrimination on grounds of sex with regard to pay.

In practice, it can be observed that these existing regulations are increasingly being interpreted in the light of the Pay Transparency Directive. Labour court case law already imposes stricter requirements on the explanation and justification of pay differences.

What companies should bear in mind now

Against this background, employers need to act now. The lack of legislative implementation should not lead to a wait-and-see approach but rather be understood as a phase of heightened legal requirements.

It is already essential to review existing remuneration systems. These should be designed transparently and must be based on objective and, above all, gender-neutral criteria. Differences in remuneration must be justifiable and documentable. This applies not only with regard to possible future legal obligations, but also to current procedural practice.

Furthermore, it is advisable to prepare internal structures for expanded disclosure and reporting obligations in anticipation of the directive’s implementation. Even though the specific details of national implementation have not yet been finalised, it is already foreseeable that, in particular, employees’ rights to information and reporting obligations regarding the gender pay gap will be significantly expanded. Although the introduction of these reporting obligations is not planned until 2028, data from 2027 will need to be used to fulfil the reporting obligation. This means that remuneration systems must already be in line with the EU Directive from 2027 onwards, even though a specific reporting obligation is not due to be introduced until 2028.

Finally, companies should consider the growing significance of equal pay disputes. The burden of proof is expected to shift further in favour of employees. Designing remuneration structures in a legally compliant manner at an early stage is therefore a key element in minimising risk.

Conclusion

Even without implementing legislation, the Pay Transparency Directive is already influencing the interpretation of existing law and tightening the standards for assessing equal pay.

Employers would therefore be well advised not to sit idly by and wait for the impending changes, but to prepare early for the expanded transparency and documentation requirements. This is all the truer given that the subsequent national implementation is unlikely to create fundamentally new structures, but will significantly tighten the requirements already in place.