Three thresholds decide whether your first pay gap report falls in 2027 or 2031. The Directive does not say how to count.

A German manufacturer with 148 people on the payroll, two managing directors on service contracts, nine working students, and twelve agency workers who have been on site for two years is either a 2027 reporter or a 2031 reporter. Nothing in the Directive tells it which.

Reporting thresholds look like the settled part of the EU Pay Transparency Directive. The numbers 100, 150, and 250 appear in every summary, every webinar slide, and every vendor comparison. What almost none of them address is the question an HR director actually has to answer first, which is who goes into the number.

That question is not a detail. It decides a four-year difference in the compliance calendar, it decides which reference year matters, and it is the one part of the preparation that no payroll extract settles.

1. Three size bands, two dates, one boundary that matters

The Directive stages the reporting duty by size. Two of the three bands start on the same day and differ only in rhythm. The third starts four years later.

Two things follow immediately. The first is that 250 is the less interesting number. It changes how often you report, not whether your first report lands in 2027 or in 2031. The number that moves a company by four years is 150.

The second is that reporting is the one duty in the Directive that depends directly on size. Three duties apply to every employer regardless of headcount: the right of a worker to request their own pay level and the average pay levels, broken down by sex, of workers doing equal or equivalent work, the entry pay or pay range a candidate is entitled to be told, for example in the vacancy notice or before the interview, and the reallocation of the burden of proof where transparency obligations have not been met. The only other size threshold in the Directive is an option, not an exemption, namely the possibility for Member States to release employers with fewer than 50 workers from the duty to be transparent about pay progression. A company with 80 people is not exempt from the Directive. It is exempt from one part of it.

2. The Directive delegates the word, not the method

Article 2 sets the scope by pointing outwards. It covers workers who have an employment contract or an employment relationship as defined by the law, collective agreements and/or practice in force in the Member States, with consideration to the case-law of the Court of Justice.

Read quickly, that looks like a clean delegation. Whoever your national law calls a worker is a worker, and you count those. Read carefully, the final clause is doing a great deal of work.

The Court of Justice has already dealt with what happens when a national definition shrinks a threshold that comes from EU law. In Balkaya (C-229/14, judgment of 9 July 2015), a German demolition company closed its establishment and dismissed its workforce. Whether the collective redundancy notification duty applied turned on whether a managing director who held no shares in the company and a woman placed with the business on a publicly funded traineeship counted towards the threshold. German law, in the relevant provision of the Kündigungsschutzgesetz, excluded them.

The Court held that the concept of worker in that context is an autonomous concept of EU law and cannot depend on national classification. A managing director who performs work under the direction of another body of the company, in return for remuneration, is a worker for the purposes of the count. So is a person on a publicly funded training placement, even though it was the employment agency and not the employer that paid her. The German exclusion could not stand.

Balkaya was decided on a different directive and there is no ruling yet on the counting of pay transparency thresholds. The point that travels is narrower and still uncomfortable. When a threshold is drawn from EU law, a national rule that removes a category of people from the count is exposed. It is not a safe harbour.

3. Germany already counts four different ways

The question is not academic, because German law does not have one answer to it. It has several, and they disagree with each other in ways that move real companies across the 150 line.

Take the four rows in turn. Under the Entgelttransparenzgesetz, the provision that already governs the individual pay information right in establishments with more than 200 people, the count is by heads. A person on eight hours a week counts exactly as much as a person on forty, and apprentices are in, because the statute defines the covered population to include them. Under the small-business provision of the Kündigungsschutzgesetz the same workforce is smaller, sometimes considerably, because part-timers are weighted down and apprentices drop out entirely.

Agency workers are the third variable and the one employers most often get wrong. For works constitution thresholds, German law directs that they be counted at the hirer rather than the agency, subject to their being regularly deployed there. A manufacturer that has run a stable contingent of twelve agency workers for years is not simply looking at twelve people who belong to someone else. Under at least one existing German counting regime, those twelve posts count towards its own threshold.

The fourth row is the one that catches people who have done everything else correctly. German thresholds are generally expressed as the number of people employed “in der Regel”, as a rule. That is a judgment about normal staffing, looking back across the year and forward to planned changes. It is not the number in the HR system on 31 December, and a seasonal trough does not lower it.

4. Which entity does the counting

The reporting duty attaches to the employer. In Germany that is a legal entity, not a group, and not a country organisation. In a holding structure with 900 people spread across five operating GmbHs, no single company need sit above 250, and one may sit well below 100.

That is a real and lawful consequence of how the duty is drafted. It is also a trap, because the population you report on and the population a comparison can reach are not the same.

Under the Directive's provision on proving equal or equivalent work, a comparison is not confined to a single employer. Where a single source sets the pay conditions, the comparison follows that source across the company boundary. And the value group within which the pay gap is measured is built from what the work requires, using skills, effort, responsibility, and working conditions, rather than from the organisation chart.

A group structure can therefore reduce or remove the duty to report a number without touching the risk behind it. A shared group pay framework is exactly the kind of single source that makes a company boundary irrelevant to a claim.

5. What Germany's expert commission actually proposed

Germany missed the transposition deadline of 7 June 2026 and, as at 14 September 2026, has published no draft bill. The best available signal is the final report of the expert commission on the low-bureaucracy implementation of the Pay Transparency Directive, dated 24 October 2025. It is an eleven-member independent commission appointed in July 2025 by the federal ministry responsible for education, family affairs, senior citizens, women, and youth.

Three of its majority recommendations bear directly on how the number is produced.

The commission would limit the reporting duty, initially at least, to employers with at least 100 workers, which aligns the German floor with the Directive's lowest band rather than reaching below it. It recommends that hourly pay be calculated from the contractually agreed working time rather than the hours actually worked, which is itself a counting decision because it fixes the denominator for every metric. And it recommends that reports be based on pay actually paid rather than target or reference pay.

On the definition of equivalent work, the commission advises against a separate German definition going beyond the Directive's four criteria, and takes the view that employers need not use a science-based job evaluation tool. On whether collectively bound employers should be privileged, the members could not reach agreement.

None of this is law. A commission recommendation is a forecast with better sourcing than most. But the question the count actually turns on, namely the treatment of part-timers, agency workers, and directors, is not among the points the report resolves.

6. Treat the number as a data problem, not a legal one

The useful response is not to wait for the statute. It is to build the register that any version of the statute will require, and to know how far you are from the nearest boundary.

1. Fix the unit before the number. Count per legal entity and per country, and write down which entity you are counting. A group-level figure answers a question nobody is asking.
2. Build a register of people, not an extract from payroll. Payroll contains who was paid in a period. The register has to contain everyone with an employment relationship: managing directors on service contracts, working shareholders, apprentices, working students, people on parental leave or long-term sick leave, fixed-term staff, and the agency workers on site.
3. Decide each borderline category in writing. One line per category, with the reason and the date. This document is the deliverable, not the number it produces.
4. Compute on normal staffing, not on a date. Look back over twelve months and forward to planned changes. A seasonal peak is not your number and neither is a seasonal trough.
5. Measure your distance to the nearest boundary. If you are less than roughly ten per cent away from 100, 150, or 250 on any defensible method, plan against the higher band. The cost of preparing early is a fraction of the cost of discovering in 2027 that 2031 was the wrong assumption.
6. Date-stamp the conclusion and keep it. If your answer is that you are out of scope, that conclusion is the document you will have to defend. An employer that has not met its transparency obligations carries the burden of proof in a pay claim, without the claimant having to establish a prima facie case first.
7. Re-run it annually and after every structural change. An acquisition, a carve-out, a change in agency use, or a wave of part-time conversions can each move the number across a boundary without anyone noticing.

The reporting threshold is the first substantive decision in a pay transparency programme and the one most often mistaken for a calculation. It is not a calculation. It is a defined population, a documented method, and a date. The employers who will be ready in June 2027 are the ones treating it that way now, while the German statute is still being written and the answer can still be built rather than reconstructed later.