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Germany

27 January 2017

Germany: A bill to tackle unequal pay

On 11 January 2017, the German Federal Government passed a bill to reduce the wage gap that persists in Germany and stands at 21%.

The bill seeks to lessen the wage gap by committing employers to greater transparency so that female employees have easier access to information that will enable them to claim the same level of pay as their male colleagues. Thus, in businesses with more than 200 employees, a female employee will be able, via the works council, to ask her employer to explain the criteria that determine her pay and to compare it (gross wages along with two benefits in kind, such as a company car or smartphone) with that of seven male colleagues. Based on the information gathered, the female employee may, where appropriate, apply for a salary top-up (see the procedure published by the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth). Moreover, businesses with more than 500 employees will have to produce an annual report on their salary structure, which will be made public. According to the Ministry, around 14 million employees will be affected by this legislation (see its press release). The Confederation of German Trade Unions (DGB) has welcomed this measure, which ‘is just a first step towards equal pay’. The DGB had hoped for more and believes that improvements may yet be made in the course of the parliamentary debates (see its press release). In its view, it is important for businesses with more than 500 employees to be obliged to monitor their pay structure and to systematically eradicate any disadvantages that are identified.

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