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GENDER GAP

Will knowing what your co-workers are paid help women earn as much as men?

The German government on Wednesday approved new legislation that will force companies to be more transparent about salaries paid to male and female employees, in a bid to tackle the gender pay gap.

Published: 11 January 2017 12:34 CET
Will knowing what your co-workers are paid help women earn as much as men?
Photo: DPA.

Under the new regulations, workers in companies with more than 200 employees will have the right to know what men and women in equal positions are earning.

Businesses with more than 500 staff members will also have to publish regular updates on salary structures to show they are complying with equal pay rules.

Women's Affairs Minister Manuela Schwesig hailed the law on salary transparency as “a real breakthrough” that would help millions of women narrow the pay gap.

“We have to break the taboo that you don't talk about money, because we want to make sure that men and women aren't played off against each other when it comes to wages,” she told the Rheinische Post newspaper.

Germany has one of the widest pay gaps in Europe, ranking only above seven other countries in an Expert Market report released in October. Women earn 21.6 percent less than men in Germany – which is a wider margin  than the European average of 16.5 percent, according to 2015 government data.

The discrepancy is in part down to the fact that women in Germany tend more often to work in low-paid jobs or sectors, or only part time.

For women with the same qualifications doing the same work as a male colleague, the pay gap stands at seven percent, the women's affairs ministry said.

Critics have argued that the new regulations will foster workplace animosity and create unnecessary red tape.

Christian von Stetten, a lawmaker from Merkel's Christian Democratic Union (CDU) party, said some 4,000 companies would be burdened with additional bureaucracy because of the law.

“The right to demand salary information will foster workplace envy and discontent,” he told Die Welt daily.

Expert Market found in another report sent to The Local that Germany will not be able to close its pay gap until 2046, coming in 21st place in a ranking of 26 countries.

“Although it is troubling to see the gender pay gap persisting in the EU, it is encouraging to see several potential closure dates in the near future,” said Michael Horrocks from Expert market in a statement.
 
“This research indicates that the traditional European powers – UK, France and Germany – could be doing more to help close the gender pay gap.”

Last year Germany also implemented a so-called “women's quota” for larger businesses to help get more women into higher positions. But a report this week found that the country's boardrooms are still largely male-dominated, even with the quota system calling for supervisory boards to have 30 percent women.

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GENDER EQUALITY

‘How much do you earn?’ New law tackles gender pay gap

It's one of the last great taboos: asking a colleague how much they earn. But Germany is hoping workers will do just that under a new law that aims to close the country's yawning gender pay gap.

Published: 12 January 2018 15:14 CET
'How much do you earn?' New law tackles gender pay gap
A female manager in Berlin. Photo: DPA

The legislation, which came into effect in Europe's top economy on January 6th, gives an employee the right to know how their salary compares with that of colleagues of the opposite sex doing similar work.

“Other people's salaries are still a taboo subject and a black box in Germany,” said acting Women's Affairs Minister Katarina Barley whose Social Democratic Party championed the law.

The hope is that more transparency will reveal whether women are paid less than male peers — and bolster their demands for a rise or pave the way for possible legal action.

The new regulations however only apply to companies with more than 200 employees — leaving women in small firms in the dark about their colleagues' pay slips.

Businesses with over 500 staff members will additionally be required to publish regular updates on salary structures to show they are complying with equal pay rules.

Supporters say the legislation is a good starting point, and hope women across the country will seize the opportunity to shed light on wage inequality.

“It's like sending up a rocket flare to see what exactly is going on in our companies,” said Uta Zech, president of the German branch of the Business and Professional Women (BPW) campaign group.

But the legislation has already faced a torrent of criticism, with detractors saying it is too complicated, lacks teeth and will foster workplace animosity.

21 percent


Photo: DPA

The law comes at a time when equality between the sexes is dominating public debate.

Zech said the discussion is particularly welcome in Germany, which has one of the European Union's biggest gender wage gaps.

Women here earned around 21 percent less than men in 2016, according to official data, worse than the EU average of around 16 percent.

In part, this is because women in Germany tend more often to work in low-paid jobs or part time.

For women with the same qualifications doing the same work as men, the pay gap stands at around six percent.

“We are a rich country. Why can't we achieve salary equality?” asked Zech.

'Paper tiger'

But Germany's pay slip transparency doesn't mean human resources will reveal exactly how much the person in the next cubicle makes.

Instead, an employee can only find out what the median salary is of at least six colleagues in comparable jobs.

Here, critics say the devil is in the detail. If, for example, three men each earn €1,500 ($1,800), €1,500 and €3,000 a month, their average salary would be €2,000.

But the median pay — or the number in the middle of the line-up — is just €1,500.

“This figure is meaningless,” said Gregor Thuesing, a labour law professor.

Opponents say it is also too easy for bosses to come up with excuses to justify wage differences.

“An employer can wriggle out of it by saying 'But Mr Maier bears more responsibilities' or 'Mr Schmidt has more client contacts',” Spiegel Online journalist Verena Töpper wrote.

“The law is a paper tiger. It won't change anything.”

She cited the high-profile example of Birte Meier, a reporter for public broadcaster ZDF who took her boss to court after learning that a male colleague's net income was bigger than her gross salary.

The judge last year threw out her discrimination claim, ruling that the colleague had simply “negotiated better”. “It's called capitalism,” he said.

Some critics warn that the new law will stoke resentment, pointing to studies that show workers reporting lower job satisfaction once they find out they earn less than their peers.

“The right to demand salary information will foster workplace envy and discontent,” conservative lawmaker Christian von Stetten told Die Welt daily when the law was passed last July.

World first

Other European countries have recently taken similar steps to lift the lid on salary secrecy — with a bit more bite.

Last year, Britain ordered firms of over 250 employees to publish details of their gender pay gap by April — with sanctions an option if companies refuse to comply.

And Iceland this year enacted a law that requires firms with more than 25 staff to prove they are paying men and women the same for doing the same work — the first country in the world to do so.