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New law forces German employers to reveal colleagues’ pay

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As of June 1 this year, German employers will be required by law to provide staff insight into coworkers’ salaries. A new piece of legislation gives employees the option to request higher pay if they feel unfairly compensated.

Under the new law, companies with more than 200 employees are required to reveal information about the company’s salary structures, the criteria on which an employee’s performance is judged, and where they stand in comparison to colleagues, to employees who demand it.

Additionally, companies with more than 500 employees must publish regular updates on their salary structures to show they’re complying with rules on equal pay.

The German minister for family and women’s affairs, Manuela Schwesig, feels the new law contributes to achieving equal pay for equal work. “I’m convinced in the long run this new law will trigger a culture change within companies and organisations and the taboo on talking about money will be broken,” she told the Zeit Online.

Some critics argue that the right to access colleagues’ salary information will lead to envy and discontent in the workplace. Additionally, they fear the law will stand in the way of rewarding individual performance. “At some point we will arrive at a socialist cover-all standard wage with no motivation to perform,” leader of the German association of family enterprises, Lutz Goebel, told The Times.

On average, women in Germany earn 21% less than men. Even when comparing like with like and taking into account factors such as working part-time and working in lower paid industries, a wage gap of 6 to 7% remains.

ALSO READ: $10,000 gender pay gap in the HR profession

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