A "pair comparison" is sufficient – entitlement to compensation for gender discrimination

BAG, judgment of October 23, 2025 – 8 AZR 300/24

The Federal Labor Court (BAG) has clarified that, in order to assume gender-based pay discrimination, it is sufficient for a female employee to demonstrate and, in the event of a dispute, prove that a single male colleague receives higher pay for the same or equivalent work. This "pair comparison" with a single colleague alone triggers the presumption that gender discrimination exists. According to the BAG, the size of a comparison group or median values are no longer relevant.

If the employer cannot refute this presumption with clear, objective, and gender-neutral reasons, they must raise the salary of the disadvantaged employee to the level of the colleague specifically compared—in other words, make an "upward adjustment."

What was the case about – and what did the BAG decide?

In the case in question, the plaintiff, a department head, referred, among other things, to the internal remuneration dashboard in accordance with the Remuneration Transparency Act. This showed that a male colleague in a comparable position received a higher salary.  

In the first instance, the Regional Labor Court had ruled that a pair comparison with only one comparator was not sufficient to assume gender discrimination and had based its decision on median values.

The Federal Labor Court has now significantly lowered this hurdle: a comparison with a single male colleague is sufficient to trigger the presumption of gender discrimination, which must be refuted by the employer. The employer must then demonstrate in court that the salary difference can be explained solely by objective, gender-neutral reasons.

Classification in the current legal Situation

The principle of "equal pay for equal or equivalent work" is derived from EU law (Art. 157 TFEU) and the German Basic Law (Art. 3 GG) and is enshrined in Germany in particular in the Pay Transparency Act and the General Equal Treatment Act (AGG).

The Federal Labor Court (judgment of January 21, 2021 – 8 AZ 488/19) had already ruled in 2021 that statistical evidence (e.g., a lower median wage for women) can be an indication of gender discrimination. In 2023 (judgment of February 16, 2023 – 8 AZR 450/21), the BAG clarified that "better negotiating skills" are not a justification for salary differences between men and women. The current ruling further refines the logic of circumstantial evidence by stating that a pair comparison with only one person of the opposite sex is sufficient to establish gender discrimination.

The BAG's position is in line with the EU Pay Transparency Directive (2023/970), which EU member states must transpose into national law by June 2026. The EU Pay Transparency Directive strengthens employees' rights to information about pay levels and criteria, requires greater transparency in recruitment (e.g., disclosure of the salary range before the interview and a ban on asking about previous salaries), introduces reporting obligations, and makes it easier for employees to enforce their rights. As soon as there is evidence of gender discrimination, the burden of proof shifts even more strongly to the employer. In addition, damages and fines may be imposed for violations of the directive's provisions.

What does this mean for employers in concrete terms?

The BAG ruling is already putting pressure on employers to act. The key message is clear: a single comparison with a comparable colleague of the opposite sex is sufficient for employers to have to explain and justify why salary differences exist. Those who cannot provide clear, objective, and gender-neutral reasons must pay the difference.

The Pay Transparency Directive, with its far-reaching obligations for companies, will further increase this pressure from 2026 onwards.

Against this backdrop, employers should review their remuneration practices, clearly describe roles and responsibilities, objectively evaluate positions, and define and document salary bands and salary levels based on objective and gender-neutral criteria (e.g., skills, responsibility, workload, and working conditions). The remuneration system must be objective, transparent, and verifiable.

Individual deviations from this remuneration system in specific cases should always be documented and substantiated with objective, gender-neutral reasons. After all, anyone who wants to justify inequalities needs reliable and non-discriminatory documentation of the decision. According to the case law of the Federal Labor Court (BAG), a general reference to "poorer performance" or "better negotiating skills" is not sufficient.

Against this backdrop, transparent and standardized remuneration structures will be indispensable for companies in the future. They reduce liability risk and ensure compliance with the EU Remuneration Transparency Directive, which must be implemented by June 2026.

We are happy to support you in developing and implementing a structured remuneration system and in ensuring legally compliant implementation of the requirements of the Remuneration Transparency Directive. A comprehensible and carefully documented remuneration structure helps to prevent potential risks of claims for damages due to gender discrimination and to reliably meet the requirements of the upcoming EU directive.