My colleague earns 500 euros more than me.
Statements like this are heard in almost every company. Often, the immediate suspicion is that something is not right. But is a salary difference automatically unlawful?
The short answer is: No.
Employers may pay employees differently. The crucial point, however, is why they do so. This is precisely where the pay transparency law comes into play.
Since June 7, 2026, the deadline for implementing the European pay transparency directive has expired. Germany has not yet fully implemented the directive; however, it is already clear where things are heading: more transparency, more proof obligations, and more opportunities for employees to uncover unfair pay differences.
The Principle: Equal Pay for Equal or Equivalent Work
The basis for this principle is not found only in the Pay Transparency Act.
Article 157 of the Treaty on the Functioning of the European Union already obliges member states to ensure the principle of equal pay for men and women for equal or equivalent work.
Both the General Equal Treatment Act (AGG) and the German Pay Transparency Act pursue this goal.
A crucial point is often overlooked:
The law does not stipulate that all employees must receive the same salary.
The law merely requires that differences can be substantiated objectively.
When may employees be paid differently?
Different pay is entirely legal in many cases.
Examples include:
- Professional experience
- Length of service with the company
- Higher qualifications
- Additional responsibilities
- Management tasks
- Night work
- Shift work
- Performance-based remuneration
- Collective agreement classification
A driver with 25 years of professional experience may, of course, earn more than a newcomer.
Similarly, a dispatcher may earn more than a driver if the job entails higher requirements.
It becomes problematic only when a salary difference cannot be explained objectively.
What does “equivalent work” mean?
Misunderstandings often begin at this point.
It is not just about identical tasks.
Two jobs can look completely different and still be classified as equivalent.
Decisive factors include, for example:
- Expertise
- Responsibility
- Workload
- Working conditions
- Decision-making authority
An example:
A company employs a warehouse foreman and a commercial employee.
The tasks differ significantly.
However, if qualifications, responsibility, and requirements are comparable, the work can still be considered equivalent.
The Myth of the “Open Payroll Book”
A widespread fear is:
“Now everyone must know what their colleagues earn.”
This is not true.
Even in the future, there will be no right to demand disclosure of individual colleagues’ salaries.
Data protection and personality rights continue to apply.
Requests for information relate to comparable pay and remuneration structures, not to individual persons.
No one will be obliged to make their personal salary public.
New Requirements for Job Advertisements
Changes will become particularly visible in the future when posting job advertisements.
According to the EU Pay Transparency Directive, applicants should be able to receive information about the intended pay or at least a salary range before an interview.
The goal is to base salary negotiations on a transparent foundation and to prevent employees from discovering after acceptance that their remuneration is significantly below their expectations.
In practice, this could mean that companies will include statements such as the following in job advertisements:
- “3,500 to 4,000 euros gross per month”
- “Remuneration according to collective agreement”
- “Pay group 6 TVöD”
- “Annual salary between 45,000 and 55,000 euros”
The specific implementation will only be determined once the directive is fully incorporated into German law. The direction, however, is clear: applicants should know early on what remuneration they can expect.
Can employers still conduct salary negotiations in the future?
Yes.
The Pay Transparency Directive does not prohibit individual salary negotiations.
Companies may continue to offer higher salaries to candidates with special qualifications, extensive professional experience, or specific additional knowledge.
However, differences must be able to be substantiated and explained in the future.
For example, if a company hires a driver with hazardous materials qualification, loading crane experience, and several years of professional experience, it may, of course, pay this person better than a newcomer without corresponding additional qualifications.
The End of Asking About Previous Salary
Another important change concerns job interviews.
Employers should generally no longer be allowed to ask applicants about their previous income.
The background is simple:
Anyone who has already been employed in a poorly paid position should not automatically have to carry this disadvantage into their next job.
In the future, remuneration should be oriented more towards the requirements of the position and less towards what the applicant earned previously.
Applicants, career changers, or employees from low-wage sectors could particularly benefit from this.
Why Employers Will Face Increased Pressure in the Future
Previously, the burden of proof lay practically with the employee in many cases.
Anyone who suspected discrimination had to first make a credible case for it.
The EU directive pursues a different approach.
Can significant pay gaps be identified, employers will increasingly need to explain why these differences exist in the future.
Precisely for this reason, documentation and transparent pay systems are becoming ever more important.
The statement
“We have always done it that way”
will hardly convince courts in the future.
What does this mean for professional drivers?
Significant pay gaps exist particularly in the transport sector.
Some examples:
- Long-haul transport
- Local transport
- Break-bulk freight
- Tanker transport
- Timber transport
- Heavy haulage
- Hazardous materials
- Plant logistics
A driver in national local transport can earn several hundred euros less than a driver in hazardous materials transport.
This is legally entirely unproblematic.
The tasks differ significantly in terms of responsibility, qualification, and requirements.
It looks different when two drivers perform the same job, drive the same vehicles, and meet the same requirements, yet one is paid less on a permanent basis without an understandable reason existing.
Then a review can indeed be useful.
Collective agreements remain important
Frequently, it is asked whether collective agreements are being circumvented by the new regulations.
The answer is unequivocally: No.
Collective agreements continue to be an important instrument for establishing fair and transparent pay structures.
On the contrary:
Collective agreements already meet many transparency requirements today.
Employees can trace why certain wages are paid based on pay groups.
Where collective agreements apply, many conflicts can already be avoided in advance.
What about allowances and bonuses?
Uncertainty often exists here as well.
Allowances remain permissible, of course.
Examples:
- Night shift premiums
- Sunday shift premiums
- Holiday shift premiums
- Hazard allowances
- Dirty work allowances
- Performance bonuses
- Attendance bonuses
The only prerequisite is that the criteria are applied in a transparent and non-discriminatory manner.
If all employees must meet the same prerequisites and the rules are transparent, there are generally no problems.
Why transparency also protects employers
At first glance, the topic seems like an additional burden for companies.
In reality, many employers benefit themselves from transparent pay systems.
Clear rules create:
- fewer conflicts
- fewer rumors
- better employee retention
- higher acceptance of salary decisions
- lower process risk
Anyone who can explain in a traceable manner why certain employees earn more than others has significantly better cards in case of a dispute.
Conclusion
The pay transparency directive does not mean that all employees must be paid equally in the future.
It also does not mean that salaries become public.
The actual core is much simpler:
Differences in pay should be understandable, objective, and verifiable.
Those who earn more should have a factual reason for it.
For employees, this creates better opportunities to recognize unjustified disadvantages.
For employers, it means above all one thing: Pay decisions must be better justified and documented in the future.
This may initially sound like more bureaucracy. In the long term, however, it can contribute to avoiding conflicts and strengthening trust in corporate pay structures.
Legal Basis and Sources
The statements in this article are based on Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 on strengthening the principle of equal pay for men and women when performing the same or equivalent work through pay transparency and enforcement mechanisms.
Official Directive Text
- EUR-Lex (German version):
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu
Important Articles of the Directive
Art. 5 – Pay Transparency Before Employment
Regulates information obligations towards applicants:
- Right to information about starting pay or a salary range
- References to relevant collective agreements
- Prohibition of questions about previous salary
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e2445-1-1
Art. 6 – Transparency in Setting Pay
Employees have a right to information on:
- Criteria for setting pay
- Pay levels
- Pay development
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e2527-1-1
Art. 7 – Right of Employees to Information
Employees can request information on:
- their individual pay
- average pay of comparable employees
- breakdown by gender
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e2586-1-1
Art. 9 – Reporting Obligations of Employers
Regulates reporting on gender-specific pay gaps.
Companies with:
- 100 to 249 employees: report every three years
- from 250 employees: annual report
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e2774-1-1
Art. 10 – Joint Pay Assessment
A joint pay assessment becomes necessary when:
- a gender-specific pay gap of more than 5% exists,
- no objective justification is present,
- and the difference is not eliminated within six months.
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e2955-1-1
Art. 16 – Damages
Employees have a right to full damages in case of violations of the principle of equal pay.
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e3528-1-1
Art. 18 – Burden of Proof
If an employee can present facts indicating pay discrimination, the employer must prove that no discrimination exists.
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e3635-1-1
Art. 34 – Implementation into National Law
Member States had to implement the directive by:
June 7, 2026
into national law.
Source:
https://eur-lex.europa.eu/eli/dir/2023/970/oj/deu#d1e4667-1-1
NoteGermany has not fully met the implementation deadline of June 7, 2026. The current Entgelttransparenzgesetz (Pay Transparency Act) remains in force. However, the EU directive already sets the direction for future legislative changes.
