Germany’s Federal Labor Court Rules on Gender Discrimination in Pay

On October 23, 2025, Germany’s Federal Labor Court held that female employees need not be content with comparing their pay with the median pay level of comparable male colleagues. In the case (Ref. No.: 8 AZR 300/24), the court held that gender-based discrimination is to be presumed where a woman earns less than a comparable male colleague, even if that colleague is a top earner. If the employer fails to rebut the presumption of gender-based pay discrimination, it must pay the remuneration earned by the male comparator included in the assessment. The full text of the decision has not yet been published. We will provide an update once the reasons for judgment are available.

Quick Hits

• The court clarified that the presumption of gender-based discrimination does not require a “preponderant probability” and that the size of the male comparator group and median pay levels are irrelevant; the employer must rebut the presumption if a female employee shows that a male colleague performing equivalent work is paid more.
• The Federal Labor Court of Germany ruled on October 23, 2025, that gender-based discrimination is presumed if a woman earns less than a comparable male colleague, even if he is a top earner.

Background

In the case at hand, a female employee sought retroactive equal pay with respect to several remuneration components of certain male colleagues. She based her claims, inter alia, on information provided by the employer in an intranet “dashboard” made available for the implementation of the German Pay Transparency Act (Entgelttransparenzgesetz). The pay of the comparators she identified exceeded the median pay level of all male employees in the same hierarchical tier. The employer argued that the cited top-earning colleagues did not perform the same work or work of equal value. It further submitted that the lower pay was justified by performance deficiencies on the employee’s part.

The Regional Labor Court of Baden-Württemberg (judgment of October 1, 2024 – Ref. No. 2 Sa 14/24) dismissed the employee’s claims for payment of the difference up to the pay of the highest-earning comparator and awarded only the difference up to the median. It reasoned that the presumption of gender-based discrimination could not be based solely on a single comparator of the other sex. Given the size of the male comparator group and the median pay levels of both sexes, there was, in its view, no preponderant probability of gender-based discrimination.

Decision of the Federal Labor Court

The Federal Labor Court partially set aside the decision of the Regional Labor Court and remitted the matter for further findings of fact.

However, the Federal Labor Court clarified that no “preponderant probability” of discrimination is required, as such a standard would be incompatible with EU law. Rather, gender-based discrimination is already to be presumed where the employee shows, and where necessary proves, that the employer pays a male colleague who performs the same work or work of equal value a higher pay level. It is then for the employer to rebut that presumption. The size of the male comparator group and the amount of the median pay levels of both groups of workers are irrelevant in the question of whether gender-based discrimination exists.

Outlook

Although the principle of “equal pay for equal work or work of equal value” and the requirement for a transparent pay structure already apply today, the Federal Labor Court’s judgment serves as a wake-up call for all companies that have still not prepared for the implementation of the European Union’s pay transparency directive (Directive (EU) 2023/970). The member states must implement the directive’s requirements by June 7, 2026. In Germany, an expert commission is expected to submit proposals to the competent ministry for implementing the pay transparency directive by the end of October 2025.

Ogletree Deakins’ Berlin and Munich offices, Cross-Border Practice Group, and Pay Equity Practice Group will continue to monitor developments and will post updates on the Cross-Border and Pay Equity blogs as additional information becomes available.

Dr. Ulrike Conradi is a managing partner in the Berlin office of Ogletree Deakins.

Teodora Ghiniou is a law clerk in the Berlin office of Ogletree Deakins.

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