BAG strengthens equal pay: gender-based pay discrimination

The BAG clarified this in its ruling of October 23, 2025 (Ref. 8 AZR 300/24): If a woman earns less than a comparable male colleague for the same or equivalent work, this is sufficient to assume a gender-based pay disadvantage. In such cases, employers must prove why the pay differences are justified - otherwise there is a risk of additional claims. For many employees, this case law means a considerable strengthening of the equal pay requirement.

Why the ruling is important

The principle that men and women must be paid equally for equal or equivalent work has long been the legal standard - enshrined, for example, in the German Pay Transparency Act (EntgTranspG) and at European level in Art. 157 TFEU.

In practice, however, it was often disputed how specifically employees had to prove differences: Do large comparison groups or statistical median values need to be used - or is a comparison with one colleague in each case sufficient? The new BAG ruling answers this question clearly and in favor of female employees.

What did the BAG decide?

• The BAG has recognized that the so-called „pair comparison“, i.e. the direct comparison with exactly one named colleague of the opposite sex, can be sufficient to justify the presumption of gender-related pay discrimination.
• The decisive factor is that the work is the same or equivalent. It is not the formal job description that counts, but the actual requirements of the job - qualifications, responsibility, workload and working conditions.
• If the specific comparison is familiar - a woman earns less than her male colleague in a comparable position - there is therefore presumed discrimination. The employer now has the burden of refutation: it must provide plausible and comprehensible evidence as to why the differences in pay are objectively justified.

What consequences does this have in practice?

For female employees

• The ruling makes it easier to demand equal pay - for example, if they realize that male colleagues in comparable positions earn more. This specific comparison alone is sufficient to justify a claim for equal pay.
• Variable remuneration components, bonuses or special payments may also be affected - provided they are granted differently for the same activities. A single comparable colleague is then sufficient for claims.

For employers

• Companies should check their remuneration structures for possible discrimination - especially if they rely on individual agreements, bonus payments or non-transparent remuneration components. Without objective justification, there is a risk of back payments.
• Transparency is becoming increasingly important: when justifying differences in pay, criteria such as qualifications, responsibility and scope of activities should be clearly documented - ideally in a comprehensible and gender-neutral manner.

What remains open - and what companies should do

The ruling does make it easier to take action against unfair pay. However, it does not change the fundamental freedom of contract: salaries may continue to be negotiated freely - as long as gender is not the reason for the difference.

Companies should therefore document remuneration decisions strategically and transparently - in order to be able to prove objective reasons in the event of a dispute.

The following applies to female employees: If there are recognizable salary differences, it is worth taking a closer look - and seeking legal assistance if necessary.