The End of the Gender Pay Gap? Implementation of the EU Pay Transparency Directive Is Imminent

The EU Pay Transparency Directive (EU) 2023/970 (EPTD)¹, which entered into force in June 2023, aims to create greater pay transparency in companies and, in particular, to eliminate the so-called gender pay gap, i.e., pay discrimination based on gender.
Its requirements go well beyond what has previously been regulated in Germany by the Pay Transparency Act ^1,2,3.

Since the EPTD must be transposed into national law by June 7, 2026, we would like to take a look in this blog post at what is changing from the perspective of employers and why there is already a need for action on the part of companies (regardless of size). The framework conditions are already in place, even though the German legislature has not yet submitted a draft bill as of April 2026.

 

What will change for employers with the implementation of the directive?

The directive takes effect even before employment begins. Certain transparency obligations for employers will apply as early as June, even during the application process: First, companies must inform applicants early in the application process (ideally already in the job posting) about the salary range (or pay grade) intended for the position in question. Furthermore, companies are no longer permitted to inquire about applicants’ previous salaries ^3,4.

Another new requirement is that all employers (regardless of company size) must, upon request, provide their employees with information on the average pay of colleagues (broken down by gender) performing the same or equivalent work. Furthermore, employees may no longer be required to maintain confidentiality regarding the amount of their pay ^5,6.
  
Unlike in the past, companies with more than 50 employees must now provide their employees with transparent information on pay-related criteria (e.g., regarding the determination and development of pay) ^4,5,6.

The directive also expands reporting requirements to government agencies: In the future, employers with 100 or more employees will be required to report regularly on the gender pay gap ⁶. Depending on the size of the company, the reporting intervals vary ^3,5. If, in this context, a pay difference of more than 5% is identified that cannot be objectively justified or is not remedied within a specified period, a pay assessment must be conducted, which employers must carry out jointly with employee representatives ^5,7.

An overview of the relevant deadlines and reporting intervals based on company size, as well as further, more detailed information on the other listed obligations for employers, can be found, for example, at RSM Ebner Stolz ⁵ and the Chamber of Industry and Commerce (IHK) ³.

 

Wait and see or take action?

The EPTD provides recommendations for action that should be addressed even before the June deadline. Eva Einfeldt, an attorney at RSM Ebner Stolz, also emphasizes that the biggest “no” for employers is to do nothing now and wait and see.
Instead, companies should urgently review whether they have compensation structures in place ⁴ or analyze existing compensation structures to determine whether they follow objective, gender-neutral, and transparent criteria ^5,7. KMUs must also take action, as some of the disclosure requirements are not tied to a specific company size ⁸.

The Federal Ministry of Education, Family Affairs, Senior Citizens, Women, and Youth provides an online overview of tools for assessing pay equity for companies9. An overview with practical recommendations for action is available for download from the North Westphalia Chamber of Industry and Commerce (IHK)7. It is also recommended here that managers be trained on topics such as transparency obligations and the prohibition of discrimination.

In this context, raising awareness of unconscious biases among decision-makers is likely to be of great importance in order to reduce the influence of (gender) biases and stereotypes in the workplace. We discuss this topic in more detail in a previous blog post.

For companies that have been practicing gender-fair selection and evaluation procedures for years, the transparency requirement is likely to offer a clear competitive advantage. Even if salary structures that comply with the guidelines are not yet in place, the workload is reduced compared to companies that are addressing the issue for the first time. Furthermore, there is unlikely to be any unpleasant surprises when analyzing salary data. Last but not least, transparency and fairness that have long been practiced—going beyond legal requirements—directly contribute to employer branding and are thus likely to strengthen employee satisfaction and commitment in the long term.

At FLD, we have been successfully supporting companies for years in establishing gender-fair processes throughout the entire employee lifecycle. Our Gender Check, for example, assesses key business processes for gender fairness, identifies areas for improvement, and enables the development of concrete measures. Through workshops and presentations on unconscious biases, we provide practical tips for identifying unconscious biases and fostering a corporate culture that actively promotes genuine equal opportunity. Together, we’ll prepare your company for the demands of tomorrow!

 

 

SOURCES:

[1] Bundesministerium für Bildung, Familie, Senioren, Frauen und Jugend. (15.04.2025). Lohngerechtigkeit. https://www.bmbfsfj.bund.de/bmbfsfj/themen/gleichstellung/frauen-und-arbeitswelt/lohngerechtigkeit#:~:text=Ziel%20ist%20es,%20das%20Prinzip,der%20Praxis%20umfassend%20zu%20verwirklichen  

[2] Entgelttransparenzgesetz vom 30. Juni 2017 (BGBl. I S. 2152), das durch Artikel 25 des Gesetzes vom 5. Juli 2021 (BGBl. I S. 3338) geändert worden ist. https://www.gesetze-im-internet.de/entgtranspg/BJNR215210017.html

[3] Industrie- und Handelskammer Bonn/Rhein-Sieg (o. D). Umsetzung der Entgelttransparenzrichtlinie zum 07 Juni 2026. https://www.ihk-bonn.de/recht-und-steuern/recht/entgelttransparenzrichtlinie

[4] RSM Ebner Stolz (26.01.2026). Entgelttransparenzrichtlinie – Umsetzung im Mittelstand. Esra Laubach im Gespräch mit Eva Einfeldt. https://www.ebnerstolz.de/de/ueber-rsm-ebner-stolz/mediathek/podcasts/mittelstandstalk/mittelstandstalk-entgelttransparenzrichtlinie-100658.html

[5] RSM Ebner Stolz (28.04.2025). Entgelttransparenzrichtlinie: Handlungsbedarf für Unternehmen. https://www.ebnerstolz.de/de/unser-angebot/leistungen/rechtsberatung/arbeitsrecht/umsetzung-entgelttransparenzrichtlinie-handlungsbedarf-arbeitgeber-81364.html

[6] Industrie- und Handelskammer Köln (o. D). FAQ zur Entgelttransparenz-Richtlinie.  https://www.ihk.de/koeln/hauptnavigation/recht-steuern/faq-6844354

[7] Industrie- und Handelskammer Nord Westfalen (o. D). Entgelttransparenzrichtlinie. https://www.ihk.de/nordwestfalen/recht/aktuelles/unternehmen-muessen-ab-2026-gehaltsstrukturen-offenlegen-6975246 (hier unten auf der Seite zu finden: PDF-Datei „Umsetzung der Entgelttransparenzrichtlinie - To-dos für Unternehmen/HR -“)

[8] Industrie- und Handelskammer Region Stuttgart (Stand Februar 2026). Equal Pay und Transparenz: Was die neue Entgelttransparenzrichtlinie für Unternehmen bedeutet.  https://www.ihk.de/stuttgart/fuer-unternehmen/recht-und-steuern/arbeitsrecht/rund-um-den-arbeitsvertrag/entgelttransparenzrichtlinie-6928626

[9] Bundesministerium für Bildung, Familie, Senioren, Frauen und Jugend. (09.03.2026). Instrumente zur Prüfung der Entgeltgleichheit. https://www.bmbfsfj.bund.de/bmbfsfj/themen/gleichstellung/frauen-und-arbeitswelt/lohngerechtigkeit/entgelttransparenzgesetz/instrumente-zur-pruefung-der-entgeltgleichheit-117950