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2 March 2015

German women’s minister Manuela Schwesig proposes new pay transparency laws

The new legislation would allow women to compare their salary to their colleagues, and is designed to address Germany's 22 per cent pay gap.

By Stephanie Boland

Manuela Schwesig, Germany’s SDP minister for families, senior citizens, women and young people, has called for new regulations which would force companies to reveal their employees’ wages – so that female workers can compare their income to that of male colleagues.

The move is designed to combat the 22 per cent pay disparity between men and women in Germany. The gap is one of the highest in Europe, despite equal pay ostensibly being covered by existing laws.

There has been some industry opposition to the proposals. According to the Frankfurter Allgemeine Zeitung, the new legislation will apply to companies with over 500 employees, although Der Spiegel suggests there is some debate over whether the measure will be extended to smaller firms.

Trade leaders argue that with a minimum wage, women’s quota and maternity leave already in place, entrepreneurs are under enough regulatory pressure. Employers’ President Ingo Kramer warned that the laws are too bureaucratic, and are likely to stifle companies without having any real effect on pay.

Some even suggested the legislation could lead to “strong unrest” and “dissatisfaction” within companies – perhaps, one may think, a just concern, with dissatisfaction” being a fairly reasonable response to finding out you earn less than all the men in the office.

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Schwesig, however, was quoted saying that transparency will be a good thing for companies: “Fair wages will … motivate employees”. She reassured the public that the pay data of individual workers will not be available, with it instead being possible to weigh up one’s income against a comparable group.

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According to the FAZ, details are likely to develop over the next few months after discussion with social partners. With the UK gender pay gap still standing at 9.4 per cent as of last year, perhaps British politicians should keep an eye on progress.