Germany was obligated to integrate the EU Pay Transparency Directive into its national legislation, yet it has failed to meet the deadline.
Numerous individuals continue to earn less than their counterparts for identical work—frequently due to their gender. While this practice is unlawful, it remains challenging to substantiate. The EU Pay Transparency Directive, which comes into force across the European Union this month, is intended to help ensure that workers receive equal pay for equal work.
These new regulations are designed to increase pressure on employers to guarantee pay equity within their organizations. However, Germany—the EU's largest, most powerful, and most populous economy—has missed the June 7 deadline for implementing the directive.
Women in medicine — the pay and power gaps
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Gender pay gap persists in Germany
The wage disparity between men and women in Germany remains a concern, despite legal mandates to eradicate it. According to the German Federal Statistical Office, the adjusted gender pay gap stood at 6% in 2025, with women earning less than men in the same roles and with equivalent qualifications.
The EU Pay Transparency Directive was introduced "to strengthen the application of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms." Once it takes effect, the concept is that employees should be able to request information to determine whether they are being unfairly compensated for comparable work, and employers will be obligated to eliminate unjustified pay gaps.
The legislation relies on three mechanisms: the right to request information, gender pay gap reporting for larger companies, and joint pay assessments.
Women in medicine — the pay and power gaps
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German government bill 'falls short'
On May 6, the German government approved a bill to amend the General Equal Treatment Act (AGG) on the recommendation of German Education Minister Karin Prien, whose portfolio includes women's affairs, and Justice Minister Stefanie Hubig. The goal was to transpose the EU's requirements into German law.
"This is a significant step toward putting our commitment to greater equality and effective action against discrimination into practice," stated Prien. However, she faced criticism for allegedly yielding to the business lobby, having cautioned against "placing an unnecessary burden on government agencies and businesses and keeping procedures as simple as possible."
"The most crucial change is that anyone affected by discrimination will now have four months, rather than two, to decide whether they wish to assert a claim under the AGG," Hubig said while presenting the amendment. Yet this has apparently failed to satisfy the European Commission.
The EU's Pay Transparency Directive mandates transparency as early as the application process, requires employers to take corrective action in cases of significant pay gaps, and shifts the burden of proof from the employee to the employer. In the future, employers will need to provide evidence that they are complying with the law.
Will Germany receive a warning letter from Brussels?
"As soon as it is established that a member state has failed to implement a directive, the Commission can initiate infringement proceedings," Matthias Ruffert, a lawyer and professor at Berlin's Humboldt University, told DW via email. "But it is not required to do so." He added that if a procedure proceeds, a member state would receive a letter of formal notice, which could be followed by a reasoned opinion.
Then, according to Elie Cavigneaux of the German Institute for International and Security Affairs (SWP), the matter could escalate. "If the European Commission still fails to file a suit, the European Parliament can sue the Commission for inaction."
Thus, Germany could theoretically receive a warning letter from Brussels, and it would not be the first instance. The European Commission has previously intervened when Germany failed to incorporate EU directives into national law on time or did so incorrectly.
The most severe case to date involved the issue of whistleblower protection. In 2025, Germany was fined €34 million ($39 million) after failing to implement a 2019 EU directive to protect whistleblowers, which was supposed to be transposed into national law by 2021. Germany's Whistleblower Protection Act only took effect in 2023.
How a German firm is attempting to bridge gender pay gap
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Commission likely to seek agreement with Berlin
"Since the Treaty of Lisbon, the Commission has been able to request the imposition of a penalty payment for failure to transpose directives at the same time as filing an infringement action," said Cavigneaux. "The European Court of Justice establishes the exact starting date for payments in its judgment and determines the amount of the penalty."
"However, before filing a lawsuit, the Commission regularly attempts to reach an agreement with the member state in question so the directive can be implemented as quickly as possible," she explained. "Essentially, failure to implement a directive on time will not automatically or immediately result in a ruling against the federal government."
This article was originally published in German.