"And what do you deserve?" More transparency on salary

Tim Böger, Managing Director of Compensation Partner, sees a very good approach in the legal text. The procedures necessary for companies to apply the law would be largely prepared by good and, above all, digital staffing, and the effort would be quite acceptable for companies with a size of 200 employees. However, companies have to think in principle about the comparability of positions and functions, as Tim Böger does in an interview with Women Can Do Anything

Which companies are affected by the new remuneration law?

This is decided by the size of the company. According to the draft law, companies with at least 200 employees must guarantee an individual claim for equal pay.

Companies with at least 500 employees are also obliged to carry out a procedure for the verification and production of compensation. Say, they must be more transparent with regard to the company's remuneration structure.

A company with 500 or 1,000 employees has to examine each employee separately? This is a lot of effort.

No. This is not the case for 1,000 individual tests. Only the positions or functions have to be presented in a similar way. This would be about 50 to 60 jobs for a company of this size.

A detailed job review is, however, only necessary when an individual salary statement is requested. This can either be requested by an employee or the works council. Only then must comparable sites be found and considered.

What does "comparable" jobs mean? How does an HR department find out?

Not every company has multiple functions, whereby different bodies have to be compared. The law states that non-discriminatory assessment procedures must be used.

For this purpose, a company must use a job evaluation. Such procedures, which are already used by many companies, offer some specialized remuneration consultations, such as compensation partners. For example, we have an online solution.

How much work is appreciated on companies?

One thing is certain: Companies must spend time and resources, depending on the degree of organization. If a company prepared well, the fulfillment of the report could be completed in half a day.

The amount of time required to process individual information requests depends on the number of questions asked. If a company already applies a compensation structure that is transparent to the employee on the basis of a job evaluation procedure, the number of inquiries should be smaller.

How can a company prepare?

Get out of the files, into a digital system! If personnel data are recorded in an HR software and are always kept up-to-date, they can be exported relatively easily and quickly for further processing. This would significantly reduce the processing time for the upcoming reporting requirement.

Moreover, a good time for wage adjustments and new hires should be paid for a fair and transparent payment.

What exactly is this individual request for information?

Employees in companies with more than 200 employees have the opportunity to compare their salaries with those of an "equivalent activity" within the company. To this end, the company needs a non-discriminatory assessment procedure to compare the activities. As a result, employees can see if they are fairly paid within their organization.

The law is called "toothless tiger". Do you agree?

The issue of equal pay and transparency has always been hotly debated since the 1950s - across Europe. It has always been about how penalties can look. There are sanctions in Sweden and Finland - there is no such penalty in Portugal or Austria.

In Germany, legal consequences are not yet clearly defined. What we know is: If companies do not make a correction of pay gaps, employees can retroactively claim a "fulfillment claim". This can be expensive depending on the number of people affected and the duration of the affiliation.

However, the consequences could also be a higher fluctuation rate or even an imagery, which would of course have a negative impact on the success of personnel recruiting. After all, nobody wants to work in a company that is considered unfair in payment.

Will the law become a bureaucracy?

The law is not yet final. We do not know if there is any change to the design. At this moment, it is too early to break the head and end in pure speculation.