Search
Contact
06.03.2023 | KPMG Law Insights

Ruling on equal pay – the end of salary negotiations?

Ruling on equal pay – the end of salary negotiations?

If an employer pays a woman a lower salary than a comparable male colleague, he cannot claim that the man negotiated better. This was decided by the Federal Labor Court (Bundesarbeitsgericht – BAG) on February 16, 2023 (Ref.: 8 AZR 450/21).

A female sales employee had filed a lawsuit because she received a lower base salary than her two male colleagues despite doing the same work. In her lawsuit, she demanded payment of wages in the same amount as her colleague who was hired almost at the same time. The employer argued that the male colleague had negotiated better and had also succeeded a female employee with higher earnings.

The lower courts had dismissed the employee’s claim. The BAG, on the other hand, ordered the employer to pay a total of 14,000 euros in back pay and compensation of 2,000 euros.

Negotiating skills do not justify unequal treatment

The BAG ruled that the plaintiff had been discriminated against on the basis of her gender, as she received a lower basic salary than her male colleagues despite doing the same work.

Pursuant to Section 22 AGG, it is presumed that discrimination has occurred on the basis of gender. The employer would have had to disprove this. In the opinion of the BAG, however, he did not succeed in doing so. The argument that the male colleague had negotiated better was not sufficient for the BAG. Even the assertion that the colleague had succeeded a better-paid employee who had left the company could not rebut the presumption of discrimination.

 

Significantly less leeway remains for pay above the collective wage agreement

The ruling has far-reaching consequences for employers who do not apply fixed remuneration systems or pay salaries or allowances above the general pay scale. The scope for freely negotiated salaries is likely to become significantly smaller with the current decision. Even though the reasons for the ruling are not yet available, it can be assumed: If the employer pays employees of one gender higher salaries than those of the other gender for the same job, it will only be able to rebut the presumption of discrimination in a very limited number of cases.

 

How should employers act now?

With regard to threatened compensation due to discrimination, companies should analyze their salary structure for possible unequal treatment and document factual reasons for the identified salary discrepancies.

In order to avoid possible legal disputes in the future, it can be advantageous for employers if uniform and transparent compensation systems apply to all employees. The reasons for the court’s ruling may provide further approaches for the design of compensation systems, which should be taken into account by employers after publication. These remain to be seen.

 

 

Explore #more

12.09.2025 | Deal Notifications

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) advised the managing partner of Deutsche Werkstätten Beteiligungs GmbH, Mr. Fritz Straub, on the sale of a majority stake in Ateliers de France

The managing partner of Deutsche Werkstätten, Fritz Straub, is selling a 75 percent majority stake in Deutsche Werkstätten Beteiligungs GmbH to the French Ateliers de…

12.09.2025 | KPMG Law Insights, KPMG Law Insights

Key Facts about the new draft of the “Data Act

On February 23, 2022, the EU Commission presented the new draft of the so-called Data Act, the “Regulation on harmonized rules for fair access to…

09.09.2025 | Deal Notifications

KPMG Law and Tax advise Adiuva Capital GmbH with Fact Books on the sale of KONZMANN Group.

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised Adiuva Capital GmbH, a Hamburg-based private equity firm (Adiuva), in connection with the…

04.09.2025 | In the media

Guest article in Unternehmensjurist: Strategically transforming legal departments: A market overview

What are in-house teams at large companies concerned about when it comes to digital transformation? Which topics will be decisive in the coming years? The…

04.09.2025 | In the media

Guest article in the Unternehmensjurist: Successful change management in the HR department

The HR department plays a crucial role in the digital transformation. It is not only affected by change, but also shapes it. Between transformation, co-determination…

03.09.2025 | In the media

Guest article in the insurance industry: Embedded Insurance – More than just a new sales channel

The insurance industry is facing a paradigm shift. Traditional sales models are increasingly being supplemented by innovative approaches aimed at facilitating access to insurance policies…

03.09.2025 | KPMG Law Insights

Supply Chain Act: reporting obligation no longer applies, sanctions reduced

In the coalition agreement, the coalition partners agreed to abolish the Supply Chain Due Diligence Act (LkSG) as part of the implementation of the…

29.08.2025 | In the media

Statement by Ulrich Keunecke on the special infrastructure fund in Politico

KPMG Law financial expert Ulrich Keunecke explains how the infrastructure special fund can be leveraged with capital from private investors. You can find the article…

25.08.2025 | Deal Notifications

KPMG Law is advising APELOS on the refinancing and acquisition of a practice group with around 50 practice locations.

KPMG Law Rechtsanwaltsgesellschaft mbH (KPMG Law) and KPMG AG Wirtschaftsprüfungsgesellschaft (KPMG) advised APELOS Therapie GmbH, a leading therapy practice group in Germany, on the refinancing…

15.08.2025 | In the media

KPMG Law Statement in Die-Stiftung.de on the topic of foundation registers – The long road to digital order

The entry into force of the foundation law reform on July 1, 2023 marks a turning point in the German foundation system. The list of…

Contact

Kathrin Brügger

Partner

Friedenstraße 10
81671 München

Tel.: +49 89 5997606 1200
kbruegger@kpmg-law.com

André Kock

Manager

Fuhlentwiete 5
20355 Hamburg

Tel.: +49 (0)40 360994-5035
andrekock@kpmg-law.com

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll