This post was also contributed by Ebru Tirel, Trainee, Norton Rose Fulbright LLP (Munich).

In Germany, “Equal Pay Day” is widely observed. It marks the day from which women are deemed to start to earn wages in that calendar year, where men have started to earn wages since January 1st. This year, Equal Pay Day was on 19 March.

According to a report of the German Federal Statistical Office DESTATIS dated 16 March 2016 regarding the gender pay gap in 2015, women earn 21 percent less than men. This inequality is due to various factors: Women often choose professions in social and personal services sectors where lower wages are usually paid than, for example, in more male dominated industrial or chemical sectors; career interruptions due to maternity leave; and widespread part time and short term jobs being carried out by women.

Even if these factors are not taken into account and only men and women with similar qualifications, professions and cv’s are compared, the adjusted gender pay gap still amounts to 7 percent. This is remarkable as the Federal German Constitution (GG) provides gender equality as a fundamental right under Article 3. Also, the General Equal Treatment Act (AGG) prohibits discrimination due to gender in the workplace, this principle also being set out in European law.

Several measures such as: The Girls’ Day and Boys’ Day, which encourages girls to show interest in male dominated professions and vice versa; the introduction of a minimum wage of EUR 8.50 per hour in 2015; the adoption of the law on equal participation of women and men in leadership positions in the private and public sector, in force since 1 January 2016, which implements a women’s quota in certain companies; and the development of parental leave have already been effective to increase female earnings.

However, the gender gap still exists which finally led to the publication of a draft law on equal pay (Entgeltgleichheitsgesetz). After previously being rejected in 2013 it is expected to come before the Bundestag this year. In particular, it includes the following:

  • Transparency is the key to detect unequal payment. To ensure this, employees will have the right to obtain information from the employer about the average salaries of employees doing equal work or work for equal value.
  • Confidentiality clauses in employment contracts relating to information about wages will be void.
  • In the event of violations of these provisions, class actions will be possible and fines may be imposed on the employer.

This draft law has been subject to criticism, notably for causing overwhelming bureaucracy, breaching the principle of tariff freedom and causing a climate of mistrust between colleagues. On the other hand, the proposal has been praised: As women often demand lower wages than men, knowing what others in a similar position earn could help them in salary negotiations.

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