Berlin’s traffic-light coalition has failed to meet the June 7, 2026 deadline set by Brussels for implementing the EU Pay Transparency Directive. The Federal Ministry for Family Affairs now expects the national law to take effect no earlier than early 2027, citing internal disputes over the scope and administrative burden of the proposed rules.
The delay stems from a deepening rift within the government. Family Minister Karin Prien (CDU) submitted a draft bill, but it has sparked cross-party opposition. SPD politician Carmen Wegge accused the Union parties of deliberately stalling the legislation. Meanwhile, business groups have joined the chorus of critics. Gitta Connemann of the CDU/CSU Mittelstand union is pushing for a revision of the directive at the European level. Germany’s backlash has found support abroad: Austria and Sweden have reportedly demanded that the directive be watered down or scrapped entirely, arguing that the red tape is excessive.
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What the EU Directive Demands
To close the gender pay gap, Directive (EU) 2023/970 imposes several key measures. Companies with at least 100 employees must report on internal salary differences. If the gap exceeds five percent and cannot be objectively justified, employers must carry out a joint analysis with the works council. Job applicants gain the right to know the starting salary or pay range for a position. In legal disputes over pay discrimination, the burden of proof shifts to employers to show no disadvantage occurred. Even occupational pension schemes will fall under the reporting requirement.
The first reporting obligations are expected to kick in around June 2028.
What Already Applies, Even Without a National Law
Despite the legislative delay, parts of the directive will take on practical force from June 8, 2026 through “directive-conforming interpretation” by German courts. Legal experts warn that this could create binding requirements for transparent compensation systems and individual information rights, raising compliance risks for businesses. The directive may even apply directly in the public sector.
For the private sector, the existing Pay Transparency Act of 2017 remains the baseline. That law allows employees to request salary data and, if refused, to sue at a labor court. However, the EU directive goes significantly further and will eventually replace the national rules entirely.
The Stubborn Pay Gap
The government’s timeline stands in stark contrast to current realities. In 2025, Germany’s unadjusted gender pay gap stood at 16 percent. Women earned an average of €22.81 per hour, men €27.05. Even when accounting for occupation and qualifications, the adjusted gap remained at six percent.
Recent court rulings underline the growing push for transparency. The Herne Labor Court recently ruled in favor of a consultant who demanded back pay. The judges made clear that employers must provide objective reasons for salary differences. Factors such as industry experience or length of service alone are insufficient to justify large pay disparities.
