Even a comparison with a colleague can justify a pay rise

Following the Federal Labour Court’s (BAG) judgement of 23 October 2025 – 8 AZR 300/24, which significantly eased the requirements for equal pay claims and deemed a comparison between a man and a woman alone to be sufficient to give rise to a presumption of unequal treatment (see our December 2025 newsletter), the Baden-Württemberg Regional Labour Court (LAG) has implemented the BAG’s guidelines. The employee is to receive back pay of around 210,000 euros gross. However, the decisive factor was not the remuneration of the male top earner she had named, but the median pay of the male reference group at the same hierarchical level.

Facts of the case

The employee claimed that she was being disadvantaged compared with male managers at the same level. As a comparator, she named a specific male colleague whose remuneration was significantly higher than her own. Had she been treated equally, she would have been entitled to a correspondingly higher remuneration.

The Federal Labour Court (BAG) had already clarified in October 2025 that, in principle, an employee may rely on a single male comparator to substantiate a claim of pay discrimination. Where there is lower pay for the same or equivalent work, a statutory presumption of gender-based discrimination generally arises. It is then incumbent on the employer to demonstrate and prove that the pay difference is based exclusively on objective, gender-neutral grounds.

The decision

However, the recent decision by the Baden-Württemberg Regional Labour Court (LAG) shows that a successful comparison between two individuals does not automatically lead to a claim for the salary of the specifically named comparator. In the Regional Labour Court’s view, the employer was able to demonstrate sufficiently, with regard to the colleague (the highest earner) named by the employee, that the significant differences in pay were not based on gender. In this respect, the company had succeeded in rebutting the presumption of gender-based discrimination triggered by the pair comparison. There is therefore no entitlement to remuneration at the level of this specific colleague.

At the same time, however, the LAG found that the employee was, on the whole, paid less than the male managers at the same hierarchical level. The employer was unable to provide a justification for this. Consequently, the Regional Labour Court awarded her a claim for back pay amounting to the difference between her actual pay and the median pay of the male comparison group. For the period from 2018 to 2022, she received back pay of approximately 210,000 euros gross as a result.

Implications for practice

For companies, the decision contains both positive and cautionary signals. On the one hand, the judgement is likely to allay fears that successful equal pay claims might in future automatically lead to an adjustment to the remuneration level of individual top earners. The Regional Labour Court (LAG) has expressly clarified that the highest-earning (usually male) employee does not necessarily serve as the benchmark for the back pay.

On the other hand, the decision confirms the continued high relevance of the Federal Labour Court’s (BAG) case law on pair comparisons. Even a comparison with a single person of the opposite sex can trigger significant burdens of proof. Companies must therefore be able to document, in a manner that is verifiable at all times, the objective criteria on which remuneration decisions are based. Professional experience, scope of responsibility, market value of specific roles, management spans, performance criteria or other remuneration parameters must be applied transparently and consistently. If there is a lack of robust documentation, or if remuneration decisions have evolved over time and are no longer traceable, the risk increases significantly.

The ruling makes it clear that the key factor is the basis for determining discrimination. A comparison between two individuals may still give rise to the statutory presumption of discrimination. However, this does not necessarily entail a claim to the same remuneration as a specifically named comparator. Rather, the claim for compensation may be limited to raising the pay to the level of the median pay of the male reference group. There may therefore be different points of reference (comparable individual employee versus reference groups); for each point of reference, it must be assessed separately whether the difference in treatment can be justified.

Practical tip

This ruling comes at a time of increasing regulatory requirements regarding equal pay. The European Pay Transparency Directive imposes significantly more extensive transparency and reporting obligations. In future, employees will find it easier to obtain information on pay structures and will be able to scrutinise gender-based pay gaps more effectively. Against this backdrop, the number of equal pay proceedings is likely to rise further. Companies would therefore be well advised to review their remuneration systems now to ensure they are transparent, consistent and properly documented.