More fairness through transparencyWhat the new Pay Transparency Act means for SMEs
With the revised EU directive on pay transparency coming into force on January 6, 2023 and its transposition into national law by June 2026 at the latest, there is an even greater focus on the fair payment of employees. For many SMEs, the question now is: what is in store for us – and how do we prepare ourselves properly?
What is the aim of the Pay Transparency Act?
The Pay Transparency Act (EntgTranspG) aims to ensure that the same pay is paid for the same or equivalent work – regardless of gender. The aim is to further reduce the gender pay gap, identify existing inequalities and eliminate them structurally.
What will change in concrete terms?
The new version of the law entails the following obligations in particular for companies with more than 100 employees:
Right to information (from 100 employees)
Employees can request information on the average salary of colleagues in comparable positions, broken down by gender. This request must be answered within a specified timeframe.
Wage transparency in job advertisements
A salary range or starting salary should be stated in future job advertisements. This applies not only to new job advertisements, but also to internal vacancies.
Reporting obligation & salary analysis (from 250 employees)
Companies must regularly carry out and publish a gender pay analysis – in some cases as part of the management report.
To-dos for medium-sized companies
Even if many obligations initially only apply to larger companies, medium-sized companies should also prepare themselves at an early stage in order to be future-proof and compliance-ready. Here are the most important steps:
1. analyze internal remuneration structures
Check how remuneration is currently determined (e.g. individual, collectively agreed, performance-related).
Identify comparable activities and compare gender-specific average values.
Tools such as compensation benchmarks or analyses via Workday, SAP SuccessFactors or DATEV can provide support.
2. define processes for salary determination
Develop clear, comprehensible criteria for salary determination: qualifications, experience, performance, market value.
Our recommendation: Document these processes in a comprehensible manner.
3. promote transparent communication
Train managers in dealing with questions about the salary structure.
Establish an open culture in dealing with the topic of “salary” – e.g. via transparent salary bands, Q&A formats or intranet articles.
4. preparation for the right to information
Define a clear process for salary requests.
Determine responsibilities in HR or the legal department.
Prepare an internal FAQ or sample letter for reply.
5. check HR systems & data quality
Ensure that all relevant pay data is correctly maintained.
Check whether your HR system is able to create gender-specific evaluations.
6. adapt employer branding
Use pay transparency as a competitive advantage in recruiting.
Proactively communicate fair pay and equality as part of your corporate culture – e.g. on career pages or in job advertisements.
ConclusionWage transparency is more of an opportunity than an obligation
The Pay Transparency Act is not just a compliance issue, but an opportunity to position yourself as a modern, fair and attractive employer brand. Companies that take a structured and transparent approach now will not only boost employee satisfaction, but also increase their own resilience to future regulations.
Would you like to take a strategic approach to the topic?
We will be happy to support you with the implementation – be it through a process analysis, workshops on fair remuneration or the selection of suitable HR systems.
Contact us for a non-binding initial consultation!
