Today marks Equal Pay Day in Germany. But what exactly is Equal Pay Day? According to the Federal Statistical Office of Germany, in 2020, women were paid 18% less than men on average. The 18% is the “gender pay gap,” meaning the median difference between the remuneration that men and women receive for equivalent work. Assuming men and women were paid the same hourly wage and converting the 18% into days, women would work for free for 66 days of the year. March 7, 2022, is therefore recognized as a symbolic day to raise awareness for the gender pay gap. Like in Germany, the gender pay gap in the United States was 18% in 2020, with the women’s-to-men’s earnings ratio remaining in the 80 to 83% range since 2004.
Addressing the Gender Pay Gap
In general, German law forbids discrimination in pay on the basis of gender, among other categories. (General Act on Equal Treatment, § 2.) In 2017, Germany passed a law to ensure equal pay for equal work or work of equal value for women and men in the same workplace, the Transparency in Wage Structures Act (Entgelttransparenzgesetz). The act provides the following measures to promote transparency in pay structures:
- prohibition of direct and indirect pay discrimination based on gender and the requirement to observe the principle of equal pay (Transparency in Wage Structures Act, §§ 3, 7);
- legal definition of “equal work or work of equal value” (§ 4);
- the legal right of an individual employee to request information on the company’s fixed basic gross salary and on one or two salary components in companies with more than 200 workers (§§ 10, 12);
- enhanced rights of the Works Council to enforce the employee’s right to information (§§ 13, 14, & 15);
- encouragement of employers with more than 500 employees to put measures in place to regularly audit the pay structures to ensure equal pay (§ 17); and
- obligation of employers with more than 500 employees to provide regular updates on the status of measures to promote equality in general and wage equality between men and women or explain why there are no such measures in place, with publication of the reports as an attachment to the company’s management report (§ 21, §22, para. 4).
Despite these measures, Germany has one of the largest gender pay gaps in the European Union (EU) and among EFTA countries. On average, the gender pay gap in the 27 EU member states is 14.1%. In order to address this issue, the new German government intends to strengthen the existing legislation on pay transparency and supports an EU directive on that topic. (Coalition agreement, at 115.)
If you are interested in learning more about the gender pay gap and other gender equality issues in Germany and around the world, take a look at the following selected resources:
- Fatma Abdel-Raouf and Patricia M. Buhler, The Gender Pay Gap: Understanding the Numbers (2021)
- The Gender Wage Gap: Breaking Through Stalled Progress: Virtual Hearing Before the Joint Economic Committee of the Congress of the United States (June 9, 2021)
- Jenny Gesley, Addressing the Gender Gap in Politics: The Case of Germany, In Custodia Legis (2021)
- Mark R. Whittington, Gender Equality (2020)
- The Gender Pay Gap and Social Partnership in Europe: Findings from “Close the Deal, Fill the Gap” (Hazel Conley et al. eds., 2019)
- Stephanie Hawthorne, Bridging the Gender Pay Gap in Law Firms (2018)
- Melissa Higgins and Michael Reagan, The Gender Wage Gap (2017)
- Liah Caravalho, Today is Women’s Equality Day!, In Custodia Legis (2016)
- Search for In Custodia Legis posts on Women’s Suffrage
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