The German Federal Labour Court (Bundesarbeitsgericht – BAG) has further developed case law on equal pay and confirmed that there is a presumption of gender-based pay discrimination even if this arises from a comparison with a single male colleague. Evidence to show a high probability of discrimination is not required to establish the presumption. This decision changes the requirements for employers in legal proceedings concerning alleged pay discrimination.

Facts of the case

The dispute is in relation to claims for remuneration and damages on the grounds of equal pay. The plaintiff, a female member of middle management at the defendant’s company, received remuneration that was below both the median remuneration for her female peers and the median remuneration for the male comparison group at an equivalent management level.

The employee claimed payment of the wage difference of €420,000 for the years 2018-2022 comparing her pay and the remuneration of a named male colleague (the pair comparison), or alternatively to the median salary of male peers. Her claim included basic salary, bonuses and virtual stock options. With regard to the virtual stock options, she claimed alignment with the level of the defendant’s highest-paid global manager. To substantiate her claims under the Remuneration Transparency Act and the principle of equal treatment under labour law, she relied, among other things, on data on the defendant’s intranet dashboard, which provides information on the intranet required under the Remuneration Transparency Act.

The defendant argued that the male comparator did not carry out the same or equivalent work as the employee. In addition, it asserted that the difference in remuneration was due to the employee’s performance which was considered lower than that of her peers. As a result, she was paid less than the median of her female colleagues.

The Labour Court partially upheld the claim and awarded the plaintiff a “full” claim for the difference between her individual wage and the median male wage, but dismissed her claim for payment of the difference with the single male comparator. The appeal against this decision was largely dismissed. In the opinion of the Regional Labour Court, the employee could not establish presumed gender pay discrimination based solely on a single comparator of the opposite sex. Additionally, due to the size of the male comparator group and the median pay levels of both gender groups, there was no evidence of gender based discrimination under Section 22 of the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz – AGG). A claim was valid only in relation to specific individual remuneration components, whereby the amount was limited to the difference between the median remuneration of the female and male comparison groups. The plaintiff appealed this decision to the Federal Labour Court.

Decision

The appeal succeeded. The Federal Labour Court partially overturned the decision and referred the case back for a new hearing and decision. It held that, a claim for equal pay does not require a high probability of gender-based discrimination. Such a requirement would be incompatible with the provisions of primary EU law, i.e. the principle of equal pay for equal or equivalent work.

Rather, gender-based pay discrimination could be presumed if the plaintiff employee demonstrated and, in the event of a dispute, proved,  that her employer paid a higher salary to a male colleague, who performed the same or equivalent work. In the present case, the plaintiff, referring to the information in the dashboard relating to a comparator, presented sufficient facts to suggest gender-based pay discrimination. The size of the male comparator group and the median pay levels of both gender groups are irrelevant as to whether gender-based discrimination existed.

In the ongoing appeal proceedings, the Regional Labour Court will have to examine whether the defendant employer is able to rebut this presumption – regardless of the lack of transparency of its remuneration system – by proving that there are objective reasons for the unequal treatment. Both parties will be given the opportunity to supplement their submissions.

The decision is currently only available as a press release.

(BAG, 23 October 2025 – 8 AZR 300/24)

Practical note

  • If the employer cannot rebut the appearance of pay discrimination with objective reasons, in certain situations it may be liable to make back payments equal to the salary level of a top earner. In the present case, the plaintiff identified  a male colleague who performs the same or equivalent work and is better paid based on information on the employer’s dashboard. The new EU Pay Transparency Directive does not establish an independent right to information about the specific salaries of comparable colleagues.
  • Employers should be able to explain plausibly and in a documented manner what objective reasons have led to pay differences. In addition to median values and individual reasons, such as a tight market environment, professional qualifications and areas of responsibility, a direct comparison between two employees must also be taken into account in future.
  • Existing remuneration structures should be reviewed in light of the requirements of the EU Transparency Directive (link), particularly with regard to equal treatment, evaluation criteria, traceability and documentation.