Further Clarity Regarding the Pay Transparency Act: Top Earners as Suitable Comparators

The Pay Transparency Directive requires Member States to transpose its provisions into national law by 7 June 2026. In Germany, there is currently anticipation regarding when the corresponding draft legislation will be presented, following the submission of the final report by the Commission for “Bureaucracy-Reduced Implementation of the Pay Transparency Directive” on 24 October 2025, which contains proposals for such implementation. The transposition of the Directive in Germany will necessitate amendments to the currently applicable Pay Transparency Act, as the Directive not only has a broader scope than the German law but also provides for more extensive rights and obligations with respect to individual information claims and reporting duties. Among other things, the required amendment will enable employees to request information about the average remuneration of the comparator group consisting of employees of the other gender, provided these employees perform the same work or work of equal value. The Pay Transparency Act currently provides for such an information claim only with respect to the median remuneration. 

Just one day before the submission of the final report, the Federal Labour Court further clarified the rules on the burden of proof under the Pay Transparency Act (Federal Labour Court, Judgment of 23 October 2025 – 8 AZR 300/24). In the underlying case, a department head at the automobile manufacturer Daimler asserted that her remuneration should be raised to match that of a male department head. 

The claimant obtained information about the higher remuneration of her colleague from a dashboard through which the company provides information in accordance with the Pay Transparency Act via its intranet. The notable aspect: The colleague whom the claimant used as a comparator is also the top earner among the male department heads, receiving remuneration significantly above the median remuneration of male department heads. The claimant, on the other hand, received remuneration not only below the median of male department heads but also below that of female department heads. 

Against this background, the lower court – the Higher Labour Court of Baden-Württemberg – held that the claimant could not demand an adjustment of her remuneration in comparison to the absolute top earner: Given the size of the male comparator group and the median remuneration of both comparable gender groups, there was no predominant probability of gender-based disadvantage. The Higher Labour Court only recognised a claim for the difference between the median remuneration of the female and male comparator groups. 

The claimant appealed, and successfully so: The Federal Labour Court remitted the case back to Stuttgart, where a new decision must be made. However, the Higher Labour Court must now take into account the clarifications provided by the Federal Labour Court: A predominant probability of gender-based disadvantage is not required to successfully establish a claim for equal pay. It is sufficient for the claimant to present sufficient facts that give rise to a presumption of gender-based pay discrimination. It is enough if the claimant can prove that the employer pays another colleague, who performs the same or equivalent work, a higher remuneration. The fact that, in an individual case, the male comparator group is relatively large and the claimant herself earns less than the median remuneration of both gender groups is irrelevant. The employer can only rebut this presumption by presenting objective and gender-neutral criteria. 

The Federal Labour Court’s statements regarding the requirements for the presentation and proof of pay discrimination are not entirely new. The principle that only sufficient facts need to be presented to give rise to a presumption of gender-based pay discrimination, thereby shifting the burden of proof to the employer, is established case law of the Federal Labour Court under the Pay Transparency Act, which is based on the case law regarding Section 22 of the General Equal Treatment Act (AGG). However, this is an important clarification as to which circumstances are not suitable to call the presumption into question. 

Especially in companies with remuneration systems that have evolved over a long period, it is not uncommon for the salary range within the same job title to be very wide. In such cases, it is advisable to review the job architecture promptly. Do these individuals actually perform the same or equivalent work? If so, can the pay differences be objectively justified? The Federal Labour Court has already established that superior negotiation skills of a male colleague do not constitute a valid criterion. 

Finally, the Federal Labour Court’s decision provides another indication that may not be in line with the transparency intended by the Pay Transparency Act: The “excessive” response to information requests, i.e., the provision of data beyond what is required by law (in this case, only the median remuneration should have been disclosed, but the claimant learned of the top earner’s remuneration via the dashboard), can increase the risk associated with an equal pay claim.