Transparency in Wage Structures Act: 85% of Companies Expect to Receive Requests for Information

The Transparency in Wages Structure Act — these words currently hang over some companies like a threat. But as HR and management consultancy Kienbaum discovered in its recent 104-participant survey on the Act’s implementation, it doesn’t have to be that way. Although the vast majority of those surveyed were expecting to receive requests for information, most were not prepared to be unprepared. According to the study conducted by Kienbaum, 70% of companies surveyed were specifically preparing for the Act.

Smaller companies are frequently unprepared

Since January 6, 2018, employees have been able to submit an individual request for information, and the study suggests that it is the larger companies with, on average, 5,400 employees who are preparing themselves most thoroughly to deal with the implications of the Act. Organizations that have not yet specifically prepared for the Act are those with fewer employees, typically around 1,330. “Our study showed that many companies were putting a lot into preparing for the new legislation. Companies that have dealt with the Act had dedicated an average of 15 staff-days to both preparation for the Act and to implementation of measures,” says Sebastian Pacher, remuneration expert at Kienbaum. “Smaller companies, which often don’t have structured compensation systems in place, frequently lack the fundamentals and resources to properly deal with the Act. The results of our study seem to back this up,” explains Pacher.

Experience and expectation diverge

In most companies (67%), there were no specific signs that employees were particularly eager to submit individual requests for information. Yet, the majority of respondents in the study expected to receive individual requests for information; irrespective of who (i.e. the work council or employer) was responsible for the procedure dealing with them. Most employers had, however, already assumed responsibility for the process (49%) or intended to do so in the future (37%). “Companies who have handed responsibility to the works council spent on average seven staff-days on preparation and implementation of measures to deal with the Act—noticeably fewer,” says Neele Siemer, compensation expert at Kienbaum.

Concrete measures remain superficial

Companies surveyed indicated that their preparations had included attending training, presentations, and seminars and exchanging information with other companies on dealing with the Act. “Only very few companies actually said that they were taking any concrete measures or making changes to systems to meet the requirements of the Act”, explains Neele Siemer. “Many organizations were just in ‘wait-and-see mode’ and were only putting together the bare essential information and data to prepare themselves for responding to potential requests for information,” she continues. Only 5% of organizations have so far examined the extent to which performance, labor market, and work-related criteria could justify different wage levels for the same or similar work. According to Neele Siemer, this is somewhat surprising asjustifying differences in salary is a key point in responding to requests for information.

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