Gitta Connemann, the federal chairperson of the Mid-Sized Business Union, has sharply criticized the EU Pay Transparency Directive. While acknowledging that the right to equal pay for equivalent work already exists under German law, she condemned the EU directive as “a prime example of European over-regulation.” She warns that even if implemented fully, the legislation will result in a “bureaucratic tsunami” for companies due to new reporting, documentation, and transparency requirements.
Connemann specifically highlighted the potential negative impact on small and medium-sized enterprises (SMEs). Although companies with over 100 employees must provide regular reports, she stressed that smaller businesses will also be affected. According to her, every company below this threshold must be prepared to answer individual inquiries regarding pay and establish comparability in compensation. For example, she argued that for a small bakery with eight employees, this would entail significant effort, as the calculation would need to account for not only basic wages but also ancillary benefits like job bikes, travel allowances, and bonuses. She described this requirement as an “insane bureaucratic effort.”
The CDU politician fundamentally questioned the utility of the directive, stating that they risked having a guideline that offers no added value, failing to change the substance of the issues but merely increasing bureaucracy and oversight. Referencing the Draghi report on European competitiveness, Connemann concluded that Europe needs to recalibrate its focus toward growth and added value, and that the Pay Transparency Directive is part of the “over-regulation” currently hindering that progress.
