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Equal Pay 2026: When you are entitled to a higher salary

Expert article in labor law

Equal Pay 2026: When you are entitled to a higher salary

Since 2017, the right to equal pay for equal and equivalent work has been enshrined in German law – and since October 2025, it has been significantly strengthened by a landmark ruling of the Federal Labor Court on the issue of equal pay for two employees. This ruling considerably lowered the requirements for filing equal pay claims. Anyone who fears earning less than colleagues in similar positions can now, under realistic circumstances, claim back pay. This article outlines the conditions under which such a claim exists and the necessary steps for its enforcement.

Equal Pay 2026: Legal basis and requirements for entitlement

The right to equal pay is based on several interconnected legal foundations. The starting point is Article 157 TFEU, which obliges member states to uphold the principle of equal pay for men and women. German law enshrines the principle of equal pay in Section 7 of the German Transparency in Wage Structures Act (EntgTranspG): For equal or equivalent work, it is inadmissible to agree upon or pay lower pay on the grounds of gender. This provision is supplemented by the prohibition of discrimination in Section 3(1) of the EntgTranspG. The burden of proof, as laid down in Section 2(2) of the EntgTranspG, follows the provisions of Section 22 of the German General Equal Treatment Act (AGG).

In principle, every employed person is entitled to this right. Although public debate is often focused on women, the law protects both genders and non-binary individuals from gender-based pay gaps. The prerequisite is always that the lower-paid person performs the same or equivalent work as the higher-paid person and that the pay gap is based on gender.

The entitlement covers not only the base salary, but all components of remuneration: allowances, variable pay components, bonuses, special gratuities, benefits in kind, stock option plans, or employee share ownership schemes. Pension commitments, company car policies, and training budgets are also included. Equal pay therefore refers to the entire compensation structure, not solely to the monthly payment amount.

Anyone who suspects a gender pay gap should have the legal basis and the specific entitlement situation reviewed by a lawyer, because the correct selection of the legal basis for the claim already determines the chances of success in the out-of-court stage.

Equal or equivalent work: When is the comparability of activities present?

The essential prerequisite for an equal pay claim is the comparability of the work performed. Section 4, paragraph 2 of the German Transparency in Wage Structures Act (EntgTranspG) is decisive here: Work is considered equivalent if, based on a totality of factors, it can be classified as being performed in a comparable situation. Matching job titles are neither necessary nor sufficient, as the decisive factor is the comparability of the work itself.

The EU Pay Transparency Directive and case law specify four key assessment criteria:

Skills and qualifications: necessary education, professional experience, specialist knowledge, language skills
Effort and strain: physical, mental and emotional demands of the job
Responsibility: Responsibility for personnel, budget and decisions, scope of errors
Working conditions: Work environment, shift patterns, travel, health risks

A sales clerk and a purchasing clerk in the same company can perform equivalent tasks with identical qualifications and comparable responsibilities, even if their specific duties are not identical. Conversely, minor differences in expertise, such as operating an additional IT system, do not justify significant salary differences, provided the overall job remains comparable.

Important: Comparability must exist within the same employer. Group-wide comparisons are generally not permissible under current German case law. In matrix structures, holding company arrangements, or temporary employment, the question of the correct employer must be clarified on a case-by-case basis, as these often represent the critical points in future legal proceedings.

Proving the claim: Comparison of pairs according to the Federal Labor Court ruling

The most significant legal development of recent years is the easing of the burden of proof through the Federal Labor Court's (BAG) ruling on a settlement between same-sex employees on October 23, 2025 (8 AZR 300/24). Prior to this decision, numerous courts required a settlement involving several same-sex employees and proof of a preponderance of probability that discrimination had occurred. This considerable hurdle has now been removed.

To establish pay discrimination under Section 22 of the German General Equal Treatment Act (AGG), it is now sufficient to name a specific person of the opposite sex who receives higher pay for equivalent work. The size of the comparison group and the median value are irrelevant for this presumption. Even the highest-paid person in the comparison group can be cited. It follows that the potential claim for additional compensation is based on that person's level of pay.

In practice, gathering information is crucial. Reliable clues can be derived from:

Information pursuant to Sections 10 and 11 of the German Transparency in Wage Structures Act (EntgTranspG) (in companies with more than 200 employees)
Internal job postings and salary bands that were accessible during the application process
Bonus or compensation arrangements that are publicly available within the company or on the intranet
Information from colleagues who make their remuneration transparent
Information from collective agreements and classification systems

Indirect indicators are also usable: conspicuous differences in remuneration between salary quartiles, a lack of promotions despite comparable performance, or the unequal allocation of variable remuneration components.

Once evidence of discrimination has been presented, the burden of proof shifts: The employer must demonstrate and prove that the salary difference is not gender-related.

Secure available information early and systematically! Have the choice of the comparison person legally reviewed, because the nominated person should actually perform equivalent work; otherwise, the presumption of competence is invalidated.

What the employer may offer as justification – and what is inadmissible.

If discrimination is suspected, the employer must refute the suspicion using objective, gender-neutral criteria. Case law and European law now clearly define which arguments will hold up in court and which will be rejected.

One of the most significant clarifications came from the Federal Labor Court's ruling of February 16, 2023 (8 AZR 450/21): A colleague's superior negotiating skills do not constitute a valid justification. If an employer grants a colleague a higher salary solely because that colleague negotiated more persistently, this cannot be used as a reason for the colleague's lower pay. This also applies to mere market practices or general references to the previous salary of the higher-paid employee.

However, objective, transparently documented criteria such as the following are considered permissible justifications:

Professional experience and relevant prior service – provided they actually have an impact on the current job
Additional qualifications, certificates or specialized training directly related to the position
Measurable performance based on clearly defined, gender-neutral target agreements
Greater responsibility (personnel, budget, market) with a demonstrable impact on activities
Function-related difficulties such as shift work, weekend work or travel

Crucially, the criteria must be documented in advance, objectively measurable, and applied consistently. If the employer spontaneously develops justifications during the process that were previously irrelevant, these will hardly withstand judicial review. The vague assertion that different compensation systems simply exist is also insufficient. The Pay Transparency Directive explicitly requires transparent and gender-neutral compensation structures.

Amount of claim: back payment, statute of limitations and damages

Once the claim is established in principle, the amount becomes relevant. The Federal Labor Court's (BAG) ruling on the comparison of employees with a specific reference point provides a clear answer: The claim relates to the difference in pay compared to the specific reference person used. If the reference person earns €600 more per month, the employer owes this difference. This covers not only future amounts but also retroactive claims within the limitation period.

The standard limitation period is three years and begins at the end of the calendar year in which the respective monthly claim became due (§§ 195, 199 German Civil Code). A lawsuit filed in 2026 allows claims to be asserted dating back to 2023. Since recurring monthly wage claims arise anew each month, the differences accumulate. In cases of prolonged discrimination, the amounts can quickly reach five or six figures.

In addition, compensation for non-material damages can be claimed under Section 15 Paragraph 2 of the German General Equal Treatment Act (AGG). This is not a retroactive payment, but rather compensation for the discrimination itself. The amount is determined by the nature and severity of the violation, the duration of the discrimination, the company size, and the employer's conduct. In practice, compensation usually ranges between one and three gross monthly salaries, and even higher in particularly serious cases.

The formal requirements are crucial: A claim for compensation under Section 15 of the German General Equal Treatment Act (AGG) must be asserted in writing within two months of becoming aware of the discrimination (Section 15, Paragraph 4 AGG); subsequently, it must be filed in court within a further three months (Section 61b of the German Labor Court Act (ArbGG)). These deadlines are tight and can lead to the loss of individual claims if missed. A claim for back pay due to wage discrimination is distinct from this and is subject to the regular three-year statute of limitations.

When is legal advice advisable regarding equal pay?

Equal pay procedures are legally complex and touch upon a sensitive issue within existing employment relationships. Legal support is advisable if suspicions of gender-based salary discrimination are substantiated, if a right to information from the employer needs to be exercised, or if an application or promotion situation is imminent in which one's own compensation will be negotiated.

An employment lawyer analyzes the legal basis of the claim, identifies a suitable comparable employee, examines the equivalence of the work in accordance with Section 4 Paragraph 2 of the German Transparency in Wage Structures Act (EntgTranspG), determines back payments and compensation amounts according to Section 15 of the German General Equal Treatment Act (AGG), and ensures compliance with the two-month filing deadline. In court, they represent you at the conciliation hearing, substantiate the claim, and present evidence, even if the employer attempts to undermine the presumption of fairness with subsequently fabricated justifications.

Legal protection against discrimination is particularly important. A dismissal solely due to the assertion of an equal pay claim constitutes retaliation under Section 612a of the German Civil Code (BGB) and can be challenged in labor court. If dismissal occurs nonetheless, a claim for protection against unfair dismissal must be filed within three weeks (Section 4 of the German Protection Against Unfair Dismissal Act (KSchG)). Simultaneous preparation of both legal proceedings is standard practice for lawyers and prevents a weakening of your legal position.

Seek advice in good time, because the strengthening of equal pay rights through BAG and EU law only has its effect if claims are asserted in a timely manner, correctly quantified and strategically well thought out.

Conclusion: Equal pay as a realistically achievable demand

Those who receive lower pay due to their gender will have significantly improved opportunities in 2026 compared to previous years to successfully claim back pay. The legal basis for the right to equal pay is found in Article 157 TFEU, Section 3 of the German Transparency in Wage Structures Act (EntgTranspG), and Section 7 in conjunction with Section 22 of the German General Equal Treatment Act (AGG). Thanks to the Federal Labour Court's (BAG) ruling on the "pair settlement" case, the burden of proof is reduced to a single, specific individual, with the claim encompassing all pay components for a retroactive period of up to three years.

Anyone wishing to claim higher pay should prepare their claim systematically: Identify a comparable employee, demonstrate the equivalence of the work performed, determine the salary difference, assert the claim for compensation in accordance with Section 15 of the German General Equal Treatment Act (AGG) within the prescribed time limit, and – if no agreement is reached – initiate legal proceedings. With competent legal counsel, it is often possible to settle back payment claims out of court; at the latest in court proceedings, a settlement agreement provides employees with a significantly stronger negotiating and legal tool.

Have potential pay discrepancies reviewed legally as soon as possible and secure expert advice from a lawyer to accurately determine equal pay claims, meet deadlines and effectively enforce your rights.