Germany: Fundamental decision on Equal Pay - One colleague is enough
In its ruling of 23 October 2025 (8 AZR 300/24), the Federal Labour Court significantly strengthened the position of equal pay plaintiffs. The 8th Senate of the Federal Labour Court has significantly lowered the requirements for evidence of gender-based discrimination within the meaning of Section 22 of the General Equal Treatment Act (AGG), thereby easing the burden of presentation and proof for plaintiffs.
According to this ruling, the mere assertion that a single colleague of the opposite sex receives higher pay for the same or equivalent work can give rise to a presumption of gender-based discrimination. If the employer cannot refute this presumption, they must pay the comparative colleague's salary – even if it is the salary of the top earner in the comparative group.
Facts of the case
The female plaintiff, a head of department, demanded higher remuneration with retroactive effect for five years, citing the principle of equal pay under EU law (Art. 157 TFEU) and the German Pay Transparency Act (Entgelttransparenzgesetz). Her individual remuneration was below the median remuneration of both the male and female comparison groups. She demanded an adjustment to the remuneration of the highest-paid male employee in her comparison group worldwide. Her basis was information from a company-internal digital transparency tool, which enabled comparisons with other employees in the respective comparison group.
The Regional Labour Court Baden-Württemberg, as the lower court, had placed higher demands on the plaintiff's submission and required a predominant probability of gender-based unequal treatment. The Regional Labour Court awarded the plaintiff only compensation in the amount of the difference between the average salary of the female and male comparison groups. In the opinion of the Regional Labour Court, the plaintiff could not rely on an individual comparator – particularly not the top earner – to establish the presumption of discrimination.
Decision of the Federal Labour Court
The Federal Labour Court takes a different view. If an employee demonstrates and, in the event of a dispute, proves that the employer pays a colleague of the opposite sex a higher salary for comparable work, there is a legal presumption of gender-based discrimination. The number of individuals in the comparison group or the average salary levels of the gender groups are irrelevant in this context. It is sufficient for the plaintiff to present adequate facts related to a single comparator that suggest gender-based pay discrimination – the so-called pair comparison. The highest-paid person within a comparison group may also be used for this purpose. If the employer is unable to rebut this presumption, it is obliged to pay the salary received by the comparator. An adjustment to the highest salary within the comparison group may also be necessary, not just up to the level of the mean value.
In the case at hand, the Federal Labour Court did not directly award the plaintiff the claimed pay difference but instead referred the case back to the Regional Labour Court. There, the defendant employer will once again have the opportunity to rebut the presumption of gender-based discrimination and provide objective reasons for the pay disparity. However, the lack of transparency in the employer’s pay system, as emphasized by the Federal Labour Court, is likely to make this justification more difficult.
Consequences for practice
Issues of pay transparency remain one of the most important challenges in employment law in the coming years. The case law of the Federal Labour Court poses the risk of triggering an upward salary spiral. Employers should therefore not only monitor median salary levels but also take into account direct comparisons of individual employee salaries.
The situation is further intensified by the European Pay Transparency Directive, which has already come into force and must be transposed into national law by 7 June 2026. Above all, it lowers the barriers to the applicability of the previous regulations on remuneration transparency. The current restriction of the employees’ information right to companies with more than 200 employees will be abolished. In future, employers will have to proactively inform their employees about their information right with regard to the applicable remuneration structure.
The current legal situation already obliges employers to disclose their remuneration structures and actively review gender-related pay differences. With its latest ruling, the Federal Labour Court has made it unmistakably clear that transparency and traceability of remuneration systems should no longer be postponed. Those who wait for the implementation of the European Pay Transparency Directive risk failing to meet the requirements that are already in place and those that will be even higher in the future. Companies are therefore well advised to review their remuneration systems in a timely manner – particularly with regard to equal treatment, clear evaluation criteria, transparency and precise and comprehensible documentation.