A growing chorus of concern is emerging within Germany’s business sector regarding the implementation of the EU’s pay transparency directive, with critics warning of a potentially debilitating surge in bureaucratic red tape. While acknowledging the laudable goal of achieving greater gender equality in remuneration, representatives from the German Mittelstand Association (BVMW) are expressing anxieties that the directive could replicate the failings of previous legislation, specifically the Supply Chain Due Diligence Act.
Christoph Ahlhaus, the BVMW’s national managing director, voiced his concerns in an interview with “Der Spiegel”, emphasizing that good intentions alone are insufficient. He cautioned against burdening businesses with complex reporting requirements, arguing that such measures contradict promises of bureaucratic simplification and instead create unnecessary administrative burdens. Ahlhaus questioned the proportionality of the measures, suggesting that the potential for amplified bureaucracy seems excessive given the existing gender pay gap, which he argues, after adjustments, stands at approximately six percent.
The EU directive, formally designated 2023/970, mandates enhanced transparency regarding salaries, aiming to ensure equal pay for equal work. Germany is obligated to transpose the directive into national law by June 2026. This obligation is facing resistance, with Steffen Kampeter, the managing director of the Confederation of German Employers’ Associations (BDA), previously branding the directive an “attack on collective bargaining agreements” in Germany.
This criticism has been sharply refuted by the German Trade Union Confederation (DGB). Deputy Chairwoman Elke Hannack accused the BDA of attempting to undermine and weaken the directive from the outset. She firmly asserted that the initiative does not represent an assault on the principles of social partnership but, conversely, has the potential to strengthen collective bargaining and contractual agreements by addressing discriminatory wage practices.
Hannack also pointed to the perceived ineffectiveness of Germany’s current, existing pay transparency law, alleging that the BDA previously advocated for lenient regulations during its legislative process. “We live in the 21st century – and because equal pay for women and men is still not a given, we need effective rules” she stated in “Der Spiegel”, underlining the urgency of achieving meaningful progress toward gender pay equity.
The debate highlights a fundamental tension between the EU’s ambition to promote greater gender equality and concerns within the German business community regarding the practicality and potential economic impact of the directive’s implementation. It remains to be seen whether Germany can successfully navigate the transposition process without significantly burdening businesses and undermining existing labor relations.