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Federal Labour Court confirms pair comparison in cases of gender-based wage discrimination
Expert article in labor law
Federal Labour Court specifies requirements for paired comparisons in cases of wage discrimination
In October 2025, the Federal Labor Court issued a ruling that significantly simplifies proving gender-based wage discrimination. In the future, I can cite a single higher-earning colleague of the opposite sex to establish discrimination.
The legal framework for equal pay in the labor market
The principle of equal treatment in European and national law obliges me as an employer to pay employees fairly for the same or equivalent work.
Article 157 of the Treaty on the Functioning of the European Union requires equal pay for women and men.
In Germany, the Pay Transparency Act specifies this requirement. It prohibits any form of pay discrimination based on gender and clarifies that all components of remuneration must be taken into account.
Furthermore, the General Equal Treatment Act makes it easier to prove discrimination, as circumstantial evidence is sufficient to support a presumption.
State of labor court case law before the new decision
The Federal Labour Court (BAG) has repeatedly emphasized that salary differences between different employee groups can be an indication of possible discrimination.
In 2023, the court clarified that even a single higher-earning colleague of the opposite sex is sufficient as a comparison. However, this ruling had previously been limited to situations where very few comparisons were available.
The question remained unanswered as to whether this approach can also be applied to larger comparison groups.
Facts of the case: An executive files a lawsuit against an automobile manufacturer.
A senior employee of an international vehicle manufacturer claimed that she had been paid less than male colleagues at the same management level for several years.
Her entitlement included various compensation components such as base salary, bonus payments, share-based compensation and pension benefits.
The plaintiff used internal pay information from the employer to prove that a male colleague with a comparable job received the highest salary in the group and was paid significantly better for many years.
Decisions of the previous instances and the issues in dispute
The Stuttgart Labour Court partially upheld the claim and awarded the employee remuneration equal to the median wage of the male comparison group.
The Baden-Württemberg State Labour Court, however, confirmed the claim in a reduced form, but rejected an orientation towards the highest-earning colleague.
The court stated that this comparison did not establish a sufficient probability of gender-based discrimination. The Federal Labor Court (BAG) took up precisely this point and corrected the lower court's approach.
The Federal Labour Court's decision: A single colleague is sufficient to establish a presumption of discrimination.
The Federal Labour Court (BAG) ruled that plaintiffs are not obliged to prove a preponderance of probability of unequal treatment.
It is sufficient if a single person of the opposite sex receives a higher income for comparable work. The size of the comparison group is irrelevant.
The court thus expressly confirmed that the so-called paired comparison remains permissible and is also applicable when numerous comparison subjects are available.
In further proceedings, the regional labor court must examine whether the employer can refute the presumption.
The BAG's guidance suggests that an unclear or incomprehensible pay structure can significantly harm the employer.
Relevance for the practice of companies and employees
For employers, this decision means that compensation systems must be designed to be transparent, comprehensible, and legally sound. I would particularly like to carefully document any extra-contractual compensation, as providing proof later is often extremely difficult.
Company agreements can establish uniform standards. Clear limitation periods and structured regulations regarding bonus payments and performance-related pay are important in this context.
For employees, the ruling represents a clear strengthening of their rights. In the future, they will only need a single higher-earning colleague of the opposite sex to trigger a presumption of discrimination. This significantly increases the chances of success for corresponding lawsuits.
Do you suspect that your salary does not comply with labor law regulations? I offer expert and confidential advice. As a lawyer, I will review your claim and support you in enforcing your rights.
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We will be happy to provide you with comprehensive, personal advice on your concerns.
Frequently Asked Questions (FAQs)
The Federal Labour Court had to decide whether, for the purpose of proving gender-related wage discrimination, a single colleague of the opposite sex who is paid better is sufficient as a comparison person.
In a paired comparison, the remuneration of a female or male employee is compared with that of a single colleague of the opposite sex, provided they perform the same or equivalent work.
Yes. According to current case law, a single higher-earning colleague of the opposite sex is sufficient to establish a presumption of pay discrimination.
No. A single piece of evidence is sufficient to derive the conjecture. A preponderance of probability is not necessary.
Equality of pay is enshrined in particular in Article 157 TFEU, the Pay Transparency Act and the General Equal Treatment Act.
The comparison should include all components of remuneration, such as base salary, bonuses, variable remuneration, share-based benefits and company pension schemes.
The size of the comparison group is irrelevant. Pairwise comparisons are permissible even if many comparison subjects are available.
The employer is responsible for demonstrating and proving that objective, gender-neutral reasons justify the differences in pay.
Employers are obligated to design their compensation systems to be transparent and comprehensible. Unclear or inconsistent pay structures significantly increase the risk of legal disputes.
Employees will in future have the opportunity to assert their claims more easily, as even a comparison with a single higher-paid colleague will create a legally relevant presumption.
