The entry into force of the Equal Pay Act has forced companies to adapt to comply with new requirements, one of the most relevant of which is the mandatory pay register.
What is the mandatory pay register?
The mandatory pay register is one of the new measures established in the “Distributive Equality Law” (Royal Decree 902/2020, enacted on 13 October 2020).
This law aims to put an end to gender-based wage discrimination and equal access to jobs for men and women and to reduce the wage gap in Spain to zero.
It obliges companies to keep a payroll register to establish whether the pay gap exists in the organisation on an annual basis. This register reveals the so-called pay gap, and in countries such as the United Kingdom, large companies are obliged to share this register publicly.
The information to be presented is numerical: average salary values and averages of salary and non-wage items with the gender variable.
It is important to clarify that the wage register affects all companies located and operating in Spain regardless of sector, age and size of their workforce. It includes SMEs, businesses, multinationals, start-ups, etc. In other words, even a micro-company with only one employee should in theory have this register updated.
Key points of the Mandatory Remuneration Register, what does the BOE say?
There are a number of articles relevant to understanding the implications of the pay register:
Art.3, clause 1.
(…) Companies and collective agreements must integrate and apply the principle of pay transparency, understood as that which (…) makes it possible to obtain sufficient and significant information on the value attributed to said remuneration.
Art. 4, para. 1.
The principle of equal pay for work of equal value as set out in Article 28.1 of the Workers’ Statute applies to all companies, regardless of the number of employees, and to all collective bargaining agreements.
Art. 5, paragraph 1.
(…) All companies must keep a pay register for their entire workforce, including management and senior management.
How to make the wage or salary register compulsory
The law does not establish the processes or mechanisms for making the register, it only determines what data it should contain:
- Average salary values.
- Average values of salary supplements.
- Average values of non-wage payments.
In an ideal world, companies should adopt a human resources strategy to analyse the pay conditions of the workforce, what criteria are used to negotiate pay and measures to minimise the pay gap, if it exists.
The Labour Inspectorate may require an explanation of what system or mechanism is used to justify pay for each role. Factors and parameters such as training, past performance and achievement of objectives or level of professional experience should be the guide for defining the remuneration of staff regardless of gender.
A good employment advisor can provide the framework including the occupational groups, the occupational category that allows us to identify jobs of equal value and draw useful conclusions from the pay register.
What does the law consider to be a “pay gap”?
An unfavourable gender gap within a company is considered to exist when there is more than a 25% gap between the average pay of one gender over the other.
What should a company do if it detects a pay gap?
The company must justify the reasons for the existence of the pay gap, it is the company’s obligation to prove that there is no discrimination.
Is the wage register public?
No, the Ministry of Labour will have access to it through a labour inspectorate or any other body that has this power. In addition, employees may have access to the wage register through a representative.
We always recommend that, especially in the area of labour law, you have a specialised advisor with a qualified labour lawyer on your team. Contact us, we can help you.
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