On average, men in Germany earn 18% more than women. This is well known, but such percentages can feel abstract. A day in October is meant to highlight this inequality: Statistically, women must work until the end of the year to earn what men already have in their wallets by October 25. 

The reasons for this ongoing inequality are multifaceted. Women are more likely to work in lower-paying industries and positions, are less often found in leadership roles and tend to reduce their working hours more frequently. A study has also shown that the timing of these reduced hours is crucial in their career paths. 

According to a study from the Economic Research Center (link to german article) of the Universities of Bonn and Mannheim, a significant part of the wage gap can be attributed to a disparity in promotions. This means that while men are advancing in their careers and earning more—typically around the age of 30—many women are going on maternity leave, beginning to work part-time, and seeking jobs that are more family-friendly. This conclusion is also supported by the German Institute for Economic Research (DIW). The wage gap becomes a noticeable issue starting at age 30, as women typically have their first child at an average age of 30.5. 

What companies can do to address the wage gap 

In addition to more political measures for better work-life balance, changing traditional roles can also help. The statistics show that an increasing number of fathers want to be more involved in parenting. Half of all men express a desire to take on equal childcare responsibilities as women. However, only 21% actually do so, according to the 2023 Father’s Report (german). Additionally, 75% of fathers only take two months of parental leave, citing fears of income loss and career disadvantages as reasons. 

Therefore, companies have several levers they can adjust and the data show that making changes is worthwhile. In companies that implement gender equality measures, the wage gap is smaller. These measures can take various forms: improved childcare options can be effective, as can targeted support for women’s career advancement, such as mentoring programs. Good collective bargaining agreements, like the contractual additional days off (T-ZUG), also help with work-life balance. The wage gap tends to decrease in connection with gender equality measures, particularly in companies with collective agreements and works councils. 

Women significantly benefit from collective agreements 

Women, in particular, benefit greatly from collective agreements. The wage gap in companies bound by collective agreements in the metal and electrical industries is 7 percentage points lower than in non-unionized companies, according to a special evaluation by the Federal Statistical Office for IG Metall. Over a full month, women under collective agreements earn about €1,400 more than their colleagues without such agreements. 

Almost simultaneously with the Day of Workplace Pay Equity in October, the peace obligation in this year’s collective bargaining round for the metal and electrical industries ends on October 28. Starting on October 29, warning strikes for collective bargaining demands are possible. IG Metall is demanding a 7% increase in pay for employees and a disproportionate raise of €170 in training allowances. While employers have presented an offer in the second round of negotiations, IG Metall finds it disappointing. Therefore, it is up to all of us to increase pressure on employers by participating in actions. 

Many are unaware of their rights under the pay transparency law 

For IG Metall’s collective agreements, the principle is clear: equal pay for equal work. This principle effectively excludes discrimination based on gender. Works councils oversee hiring processes and job classifications, helping when job responsibilities change but classifications aren’t updated accordingly. 

Often, women are unaware that they earn less than their male colleagues in the same positions. In companies with more than 200 employees, they have the right to be informed about pay discrepancies upon request under the Pay Transparency Act. Unfortunately, this right is rarely exercised in practice. A report from the University of Tübingen found that only 4% of employees had requested such information. Many people simply don’t know about this right. “Two-thirds are unaware of their rights,” the report concluded. 

Companies could face fines in the future 

Understanding wage inequality is the first step toward change. In early 2023, a groundbreaking ruling from the Federal Labor Court (BAG) confirmed this. A woman filed a complaint because she earned less than her male colleague for the same work. The company argued that the man had better negotiation skills during the hiring process, which the court rejected. The BAG stated that there must be objective reasons justifying any pay differences. As a result, the company was ordered to pay the employee the wage difference along with compensation. 

In general, IG Metall and other unions and associations criticize the Pay Transparency Act for not going far enough with its individual right to information in Germany. The EU aims to take further steps, mandating its member states to implement new guidelines for increased pay transparency by 2026. Companies with at least 100 employees will then be required to publish a report on gender-specific wage differences. Additionally, legal provisions for compensation claims and penalties in the form of fines for companies that engage in discrimination are to be introduced.