C
Comparable Worth
German: Gleichwertigkeit der Arbeit
The principle that jobs of similar value to an employer should be compensated equally, even if the jobs themselves are different. Distinct from "equal pay for equal work," comparable worth compares dissimilar jobs that require equivalent levels of skill, effort, responsibility and working conditions. The EU Pay Transparency Directive operationalises this concept through mandatory comparator groups of "work of equal value" (Article 4).
Compensation Structure
German: Kompensationsstruktur / Verguetungsstruktur
The complete system of salary bands, allowances, variable pay and benefits that governs how employees are compensated. Under the EU directive, employers with 50 or more workers must make the objective criteria underlying this structure accessible to all employees (Article 6).
Comparator Group
German: Vergleichsgruppe
A group of workers performing the same work or work of equal value, used as the unit of analysis in pay transparency reporting. The EU directive requires employers to report the gender pay gap within each comparator group. Where the unexplained gap exceeds 5 percent, a joint pay assessment with worker representatives is mandatory (Article 10).
E
EEOC (Equal Employment Opportunity Commission)
US federal agency
The US federal agency responsible for enforcing federal employment discrimination laws, including Title VII of the Civil Rights Act and the Equal Pay Act. The EEOC investigates charges of pay discrimination and has authority to file lawsuits against employers. While the EEOC operates only within US jurisdiction, multinational employers often align their EU pay equity processes with EEOC compliance frameworks for consistency.
Equal Pay Act (1963)
US federal law
US federal law that prohibits sex-based pay discrimination for substantially equal work performed in the same establishment. The Equal Pay Act uses a narrower comparator than the EU directive: it compares jobs requiring equal skill, effort and responsibility performed under similar working conditions, whereas the EU directive extends the comparison to "work of equal value" across an entire organisation. The Equal Pay Act allows four affirmative defences: seniority, merit, quantity/quality of production and any factor other than sex.
Equal Pay / Pay Equity
German: Entgeltgleichheit
The principle that workers must receive equal pay for equal work or work of equal value, regardless of sex. Enshrined in Article 157 TFEU for the EU and in the Equal Pay Act (1963) for the US. The EU Pay Transparency Directive is the enforcement mechanism that gives this principle teeth by requiring disclosure, reporting and reversing the burden of proof.
G
Gender Pay Gap
German: Gender Pay Gap / Lohnluecke
The percentage difference between the average gross hourly earnings of men and women. Unadjusted: without controlling for occupation, industry or working hours (EU average 2025: 12.7 percent). Adjusted: after controlling for these factors. The EU directive targets both by requiring transparency in pay-setting criteria and mandatory reporting of the gap at comparator-group level.
Grading
German: Grading / Eingruppierung
The assignment of roles to defined value levels (grades) based on a job evaluation. Each grade is linked to a salary band. Grading systems form the backbone of transparent compensation structures and are the basis for forming comparator groups under the EU directive.
H
Hay Method
German: Hay-Methode
An analytical job evaluation method developed by Edward N. Hay in the 1940s, now part of Korn Ferry. Evaluates roles on three main factors: know-how (technical knowledge, management breadth, human relations skills), problem solving (thinking environment, thinking challenge) and accountability (freedom to act, magnitude, impact). Widely used by multinationals for its global comparability and is one of the most defensible methods under the EU directive's requirements for objective, gender-neutral criteria.
I
Internal Equity
German: Interne Gerechtigkeit
The fairness of pay relationships between jobs within the same organisation, assessed through job evaluation. Internal equity ensures that roles of equal value receive equal pay, regardless of market rates or individual negotiation outcomes. The EU directive effectively mandates internal equity by requiring comparator groups and reporting the pay gap within them.
Information Right
German: Auskunftsanspruch
Under the EU directive, every worker has the right to request, in writing, information about their individual pay level and the average pay levels — broken down by sex — for workers doing the same work or work of equal value. The employer must respond within two months and remind workers of this right annually. Unlike Germany's 2017 Pay Transparency Act, which only applied to employers with 200+ workers, the EU directive applies regardless of employer size.
J
Job Architecture
German: Job Architecture / Stellenarchitektur
The systematic structure of all roles in an organisation, organised by job families, career levels and grades. A documented job architecture is a prerequisite for forming comparator groups and for building consistent salary bands. Without it, the directive's reporting and information rights obligations cannot be met.
Job Evaluation
German: Stellenbewertung
The systematic assessment of a role's relative value within an organisation, based on defined criteria. Can be analytical (factor-based, e.g. Hay, Mercer IPE) or summary (whole-job ranking). The EU directive requires that the evaluation criteria include skills, effort, responsibility and working conditions (Article 4(4)) and be gender-neutral.
Joint Pay Assessment
German: Gemeinsame Entgeltbewertung
A mandatory review triggered under Article 10 of the EU directive when a pay transparency report reveals an unexplained gender pay gap exceeding 5 percent in any comparator group and the employer cannot justify it with objective criteria. The assessment must be conducted jointly with worker representatives and must result in remedial measures.
M
Median
German: Median
The middle value in a distribution: half of workers earn more, half earn less. More robust against outliers than the mean. The EU directive uses median-based comparisons within comparator groups as the preferred metric for assessing pay equality.
O
OFCCP (Office of Federal Contract Compliance Programs)
US federal agency (Department of Labor)
The US Department of Labor agency that enforces non-discrimination obligations for federal contractors. OFCCP requires affirmative action plans and compensation analyses from contractors with 50+ employees and USD 50,000+ in federal contracts. While OFCCP jurisdiction is limited to the US, its analytical framework for compensation reviews — including cohort analysis and regression — is often adopted by multinationals as a global standard for pay equity audits.
P
Pay Equity Audit
German: Pay Equity Analyse
A statistical analysis of an organisation's compensation data to identify pay gaps based on gender or other protected characteristics that cannot be explained by objective factors such as experience, performance or location. The EU directive makes such audits effectively mandatory: without them, employers cannot produce the required pay transparency reports or monitor the 5 percent threshold that triggers a joint pay assessment.
Pay History Ban
German: Verbot der Gehaltsfrage
The prohibition on asking job candidates about their current or previous salary. Under the EU directive (Article 5(2)), this ban applies to all employers in the EU from 7 June 2026. In the US, pay history bans are in force in over 20 states and cities, including California, New York, Illinois, Massachusetts and New Jersey. The rationale is that anchoring new offers to prior pay perpetuates historical discrimination.
Pay Transparency Report
German: Entgelttransparenzbericht
The mandatory report under the EU directive containing the overall gender pay gap, the gap per comparator group, the gender distribution across pay quartiles and the gap in variable pay components. First reports due 7 June 2027 for employers with 150+ workers. In the US, California (SB 1162) requires a similar annual pay data report filed with the Civil Rights Department.
R
Reversed Burden of Proof
German: Beweislastumkehr
Under Article 18 of the EU directive, once a worker presents facts from which pay discrimination can be presumed, the burden shifts to the employer to prove that no discrimination occurred. This is a fundamental change from the traditional rule where the claimant bears the full burden. Employers without documented, objective pay criteria will find it effectively impossible to discharge this burden.
S
Salary Bands
German: Gehaltsbaender
Defined pay ranges (minimum, midpoint, maximum) for each job grade or job family. Under the EU directive, salary bands form the basis for the mandatory salary disclosure in job adverts (Article 5) and the individual information right (Article 7). In the US, salary bands must be disclosed in job postings in Colorado, New York City, California, Washington and Illinois.
Salary Disclosure
German: Gehaltsangabe in Stellenanzeigen
The obligation to inform job applicants about the starting salary or salary range for an advertised position. Under the EU directive (Article 5), this must happen either in the job advert or before the first interview. Phrases like "competitive salary" or "negotiable" do not satisfy the requirement. Multiple US states already mandate salary ranges in postings.
T
Total Compensation
German: Gesamtverguetung
The sum of all compensation elements: base salary, variable pay (bonuses, commissions), equity (stock options, RSUs), benefits (health insurance, retirement contributions) and perquisites. The EU directive defines "pay" broadly to include all components a worker receives by reason of their employment, making total compensation the relevant unit for pay equity analysis.
W
Work of Equal Value
German: Gleichwertigkeit der Arbeit
Two roles are considered of equal value when they are assessed as comparable using objective, gender-neutral criteria: skills, effort, responsibility and working conditions (Article 4(4) of the EU directive). This is broader than "equal work" (identical jobs) and requires a cross-organisational evaluation that covers all roles, not just those with the same job title. Forming comparator groups of work of equal value is the central structural requirement of the directive.
Works Council
German: Betriebsrat
An employee representative body, mandatory in many EU member states (notably Germany, Austria, the Netherlands and France). Works councils have co-determination rights on pay principles and are the designated partner for joint pay assessments under Article 10 of the EU directive. For pan-EU implementations, the European Works Council (EWC) may be the relevant body.