Evaluation of the Act to Promote Pay Transparency between Women and Men

In order to reduce pay inequality between men and women, the German government has set itself the goal of reducing the (unadjusted) pay gap to 10% by 2030. To achieve this, however, it is first necessary to be able to identify pay differences between men and women in companies and make them transparent. To this end, the Act on the Promotion of Transparency of Pay Structures (EntgTranspG) came into force on July 6, 2017. The IAW was commissioned by the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth (BMFSFJ) to carry out the second evaluation of Section 23 EntgTranspG.

Evaluation and reporting cover companies and employees in the private sector as well as public sector departments and employees. On the one hand, the project is based on comprehensive standardized surveys of employees, companies and offices as well as works and staff councils; these were used to examine the relevance, implementation and evaluation of the law by the stakeholders concerned. On the other hand, an econometric analysis of the effects of the law was carried out on the basis of official process and survey data from the statistical offices and the Federal Employment Agency as well as other representative data. In addition to an assessment of the implementation and effects of the law, proposals for the further development and adaptation of the legal regulations are an essential part of the evaluation study.

In the causal analyses of the study, no statistically significant effects of the instruments of the EntgTranspG on equal pay between women and men can be proven. The further analyses show that the applicable statutory regulations are still not sufficiently well known, that their implementation remains unclear in some cases, and that they are often completely or partially ignored or circumvented. Another contributing factor is that at least two of the three central instruments of the law, namely the voluntary company audit procedures and the reporting obligations for companies subject to management reporting requirements, are not or not sufficiently sanctioned.

Three key recommendations can be derived from the results of the evaluation, which could contribute to improving the effectiveness of the Act: Firstly, the underlying regulations should become even better known, particularly among employees; secondly, more clarity and consistency should be sought in the wording of the Act; and thirdly, the binding nature of the Act's instruments should be increased.

Final report (in German)