FlexCode Systems
On 7 June 2026, the deadline for Germany to transpose the EU Pay Transparency Directive into national law expired. There is no new Pay Transparency Act yet. As far as we know in early September 2026, there is not even a published ministerial draft bill. Many HR departments conclude from this that they can wait.
That is risky. The content of the directive is fixed, and the German legislator can shape it but not water it down. The first pay reports for employers with 150 or more workers are due in June 2027, and they draw on data you are producing today. If you only start organising your pay data once the law arrives, you may have just a few months to do it.
This article summarises what the directive requires, what actually applies in Germany since 7 June, and how to prepare pay structures, job ads, information requests and metrics in Odoo. It is a practical overview, not legal advice, so check the details for your company with your legal counsel.
Directive (EU) 2023/970 to strengthen the application of the principle of equal pay for men and women entered into force in June 2023. Article 34 required member states to transpose it by 7 June 2026.
In Germany, the Federal Ministry for Education, Family Affairs, Senior Citizens, Women and Youth (BMBFSFJ) is responsible. A commission on low-bureaucracy implementation of the directive handed its final report to Minister Karin Prien in November 2025. The ministry then planned to present a draft bill and start the legislative process in early 2026. That has not happened so far. Trade media expect a new law in 2027 at the earliest.
Until then, the 2017 Pay Transparency Act (Entgelttransparenzgesetz) remains in force. It already provides an individual right to information in establishments with more than 200 employees, recommends internal pay audits for employers with more than 500 employees, and requires reporting from large companies that must publish a management report. The directive goes considerably further on almost every point.
These are the core points that the new German law will have to cover in any case:
Important for your data: under Art. 3, pay means not just the base salary but all components in cash or in kind, including bonuses, allowances, company cars and occupational pensions.
| Company size | First report | After that |
|---|---|---|
| 250 workers or more | by 7 June 2027 | every year |
| 150 to 249 workers | by 7 June 2027 | every three years |
| 100 to 149 workers | by 7 June 2031 | every three years |
| fewer than 100 workers | voluntary |
The report includes, among other things, the mean and median gender pay gap, each also for variable components, the share of women and men receiving variable components, the distribution across four pay quartiles, and the gap per category of workers, split into base pay and variable components. Whether Germany will adjust these dates because of the late transposition is open. Plan with the dates in the directive.
Two wrong extremes are circulating: "the directive now applies directly" and "nothing changes without a law". Neither is quite right.
Private employers. As a rule, an EU directive does not have direct effect between private parties. Employees of a private company therefore generally cannot base claims directly on the directive as long as there is no German law. German courts must, however, interpret existing law as far as possible in line with the directive, for example the Pay Transparency Act and the General Equal Treatment Act (AGG).
The principle itself has applied for a long time. The right to equal pay for equal work and work of equal value is laid down in Art. 157 TFEU, and according to the case law of the Court of Justice of the EU it also applies directly between employers and employees. In 2023, the German Federal Labour Court ruled that a male colleague's higher salary cannot be justified simply by the fact that he negotiated better (BAG, judgment of 16 February 2023, 8 AZR 450/21). Equal pay claims are therefore already possible today.
Public employers. Employees of state bodies may, after the deadline, be able to rely directly on sufficiently clear provisions of the directive.
The practical consequence: until the German law arrives there are few new obligations, but there is hardly a grace period either. As soon as it is in force, the obligations apply, and the data for the first report must already be right.
Whatever the exact German wording turns out to be, these steps make sense:
Odoo does not make your pay structure compliant by itself. What it does is bring together the data that today is often spread across a recruiting tool, Excel salary lists and payroll. That is the precondition for everything else. Here is how the requirements map to Odoo 19.
In Odoo, every job position is its own record, linked to employees, departments and job postings. What the standard does not know is a pay grade with a range. We add fields for the group of work of equal value, the lower and upper limit of the pay band and the evaluation criteria per position, using Odoo Studio or a small module. The job architecture then stops being a document and becomes the basis for reporting.
Positions are created in Odoo Recruitment and published directly on your Odoo website. The pay range from the band can be carried into each job ad, so the ad and the internal structure never drift apart. If you prefer to share the range before the interview instead, it can go into the invitation template.
Odoo Recruitment has fields on each application for the expected and the proposed salary. Asking for salary expectations is not prohibited by the directive, but asking about pay history is. Check your website application form, your email templates and any custom fields for wording such as "current salary", and brief everyone who conducts interviews.
In Odoo 19, contract data is stored as versions on the employee record. Each version holds, among other things, the job position, contract type, working schedule, gross wage and an effective date. That lets you see at any time who earned how much in which role on a given date. Gender is also stored in the employee record. Variable components such as bonuses or allowances come from Odoo Payroll if you run payroll in Odoo, or are taken over from your payroll provider, for example through a regular import from DATEV.
An information request is a case with a deadline. In Odoo it can be handled as a ticket or task with a two-month deadline, a responsible person and reminders. The answer itself, meaning the worker's own pay and the average by sex in the comparison group, comes from a prepared report on the contract data, not from a manually maintained spreadsheet. The annual notice to all workers about their right to information can be set up as a scheduled internal message.
Contract data in Odoo can be grouped in list or pivot views by job position, department and gender, with the average wage per group. For the full set of report metrics, meaning median, quartiles, variable components and the gap per category, we set up an Odoo spreadsheet that reads live from contract and payroll data. Differences of 5 percent or more per group are flagged, so you can check justifications or plan corrections before the six-month window starts.
Pay data is among the most sensitive data in any company. In Odoo, salary fields are visible only to authorised HR roles, and reports can be built so that very small groups do not allow conclusions about individuals. Where the data is hosted is a decision too. Our article on GDPR-compliant self-hosting of ERP systems shows the options.
Included in the standard: job positions, job postings, applications with salary fields, contract versions with wage and history, gender in the employee record, pivot reporting and role-based access. Added through configuration or small extensions: pay grades and bands, evaluation criteria, handling information requests with a deadline, and the complete report metrics. If you use a separate HR tool today, our comparison Personio or Odoo HRM shows what a switch involves.
Does the EU Pay Transparency Directive already apply in Germany?
The transposition deadline expired on 7 June 2026, but there is no German implementing law yet. As a rule, the directive does not apply directly against private employers, but courts must interpret existing law in line with it. Until the new law arrives, the 2017 Pay Transparency Act continues to apply.
When do companies have to produce a pay report?
Under the directive, employers with 150 or more workers report for the first time by 7 June 2027, those with 250 or more every year after that and those with 150 to 249 every three years. Employers with 100 to 149 workers report for the first time by 7 June 2031. How Germany will handle these dates given the late transposition is still open.
Does the salary have to be in the job ad?
The directive requires that applicants learn the starting pay or its range before negotiations, for example in the job ad or before the interview. The job ad is one option, but not the only one. Asking about pay history, on the other hand, is no longer allowed.
What happens if the pay gap is more than 5 percent?
If the report shows a difference of at least 5 percent in a category of workers that is not justified by objective, gender-neutral criteria and is not remedied within six months, the employer must carry out a pay assessment together with the workers' representatives and agree on measures.
Can Odoo produce the pay report automatically?
Not entirely out of the box. Odoo keeps job positions, contract versions with wages, gender and, with Odoo Payroll, variable components in one place. We set up the report metrics such as median, quartiles and the gap per category as reporting on this data, so the report is up to date at the click of a button.
The German law is coming later than planned, but it is coming. Companies that organise their job architecture, pay bands and pay data now can answer information requests in minutes instead of weeks, and spot differences before they appear in a report.
FlexCode sets up exactly these processes in Odoo, from the job structure to recruiting, contract data and reporting. Request a demo or talk to us about your pay structure, or email info@flexcodesys.com. One System. Total Control.