Germany: Right to Information on Wages Extended to Employee-like Freelancers

First Federal Labour Court ruling on the Transparency in Wage Structures Act extends Right to Information on Wages to Employee-like Freelancers

The Transparency in Wage Structures Act was introduced in 2017 in order to counteract pay inequalities.  Often employees are paid unequally (usually because of their gender) despite doing the same work. The German legislator has explicitly prohibited gender discrimination through unequal wages for the same work. Furthermore, under the Transparency in Wage Structures Act, employees working in an establishment with more than 200 employees have a right to information against their employer regarding wage structures. The employer must provide information on the remuneration of comparable employees, provided that there are at least six comparable employees of the other gender.

In the recent case before the Federal Labour Court, an editor filed a complaint against a public television station. The editor had a contract as a “freelance staff member” for an indefinite period. Since she was essentially free to structure her work as an editor, independently of instructions from the employer, she did not qualify as an employee under German law.

In 2018, the editor submitted a claim for information under the Transparency in Wage Structures Act to her employer’s staff council. The employer refused to provide any information, because the editor was a freelancer and not an employee under German law. Pursuant to the language of the Transparency in Wage Structures Act, “employees” shall have the right to information. The law names “dependent employees” as one example, but does not contain any regulations on freelancers and employee-like freelancers.

In the following court proceeding, the Federal Labour Court has ruled in favor of the employee. The ruling is the first verdict of the highest German labour court on the Transparency in Wage Structures Act. The court found that the term “employee” in the meaning of the Transparency in Wage Structures Act is not to be understood narrowly within the meaning of “employee” under German law, which would refer only to dependent employees, but has to be interpreted in accordance with EU law and may, therefore, also include persons similar to employees. Consequently, the editor, as a freelancer who received her main income from only one employer, was also entitled to claim information regarding the applicable wage structures.

This ruling extends the right to information under the Transparency in Wage Structures Act to freelancers who are comparable to employees, which can be the case, for example, for freelancers who are employed over a long period and for an indefinite period of time, and who receive their principal income from only one employer. It remains to be seen to what extent this ruling influences the practical application of the Transparency in Wage Structures Act. Already when this law was introduced, there were fears that the bureaucratic effort would be too high for employers and that employers would be flooded with requests for information by their employees. So far, in practice, this has not been the case.