equal pay

Tell Her How Much He Earns

manuela schwesig_Michael Kappeler_dpa
Pushing for equal pay: Manuela Schwesig is the Germany's minister of family affairs, senior citizens, women and youth.
  • Why it matters

    Why it matters

    Companies may face higher wage bills because of a new law that obliges them to tell women applying for jobs just how much their male counterparts are paid.

  • Facts

    Facts

    • The law, which contains several efforts to force companies to reveal financial data, was drafted after lengthy talks with management and unions throughout Germany.
    • Requirements that base salaries be revealed for all positions would not only ensure more fairness, but give women more muscle when negotiating pay.
    • A remaining problem with the law is the thorny definition of “equivalent work.”
  • Audio

    Audio

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Talking about salaries is usually a taboo, but a proposed new law to boost wage equality in Germany will force employers to tell women applying for a job just how much their male counterparts earn.

The law is being spearheaded by Manuela Schwesig, the minister for family affairs and a member of the center-left Social Democratic Party, the junior partner in Germany’s left-right governing coalition.

After months of talks with management and unions, Ms. Schwesig outlined the core points for an equal pay law this week, meeting a pledge made when German Chancellor Angela Merkel’s coalition government took office at the end of 2014. It is now in the hands of Ms. Merkel and her full cabinet.

Employers would be obligated to tell women applying for a job exactly how much a group of at least five male colleagues with “the same or equivalent” work experience earn on average – or, if necessary, vice versa. If that wage is higher than the salary offered the woman applicant and the employer is unwilling to increase it, she can either turn to the workers’ council or file a lawsuit.

Ms. Schwesig said the law was also intended to make women more self confident in wage negotiations. “How can I negotiate well, if I do not know what those to my left and right earn?” she said.

The idea is that companies will be more open about salaries. Existing secrecy clauses, designed to deter workers from discussing salaries with each other, should be eliminated. Job descriptions should include the minimum salary.

The law would help to close the 22-percent wage gap between men and women, Ms. Schwesig said, noting the largest reason for the pay difference is because women are more heavily represented in occupations that pay the worst. The “adjusted” pay gap, however, still amounts to eight percent.

A saleswoman could make a case for a pay rise if she finds she and her female colleagues are being paid less than the male warehouse staffers.

The sticking point has been what counts as “equivalent work.” For supporters of the law, the definition must be decisive enough to force open the “black box” that many employers use to hide information.

As a compromise with the center-right Christian Democratic Union party of Ms. Merkel, the law applies only to companies with at least 500 employees. In total, it could affect some 6,200 companies with about 11 million employees.

The proposed law is expected to come before parliament some time next year, after Ms. Schwesig returns from her maternity leave on May 1, 2016.

The ministry has compiled case studies of instances where women would find the new information useful. For example, a saleswoman could make a case for a payrise if she finds she and her female colleagues, who earn €1,663 ($1,832) per month, are being paid less than the male warehouse staffers making  €12.92 per hour. These are considered equivalent jobs, at the least, as saleswomen more likely have had more training.

Hardship supplements would face similar tests, for example, in cases where men use heavy machinery for casting while the female-dominated manufacture of printed circuit boards are done by hand.

The law also includes other transparency rules for companies and government departments. They will have to follow procedures laid down by the ministry or labor institutes, such as the Hans-Böckler Foundation, and issue regular reports on equal pay.

 

Barbara Gillmann is covering politics for Handelsblatt in Berlin since 2002. She is covering education, research, family policy, demographic development and Germany’s Green party. To contact the author: b.gillmann@handelsblatt.com

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