Although there have been some improvements for female employees in the labour market, the gender pay gap still persists in Spain. According to the most recent salary report issued by the National Statistics Institute in 2017, female employees working on a full-time basis earned 88.5% of male employees' salary. This percentage amounted to 92.3% in the case of part-time employment.
The salary gap is the most striking factor that exists among the inequalities remaining between men and women in the workplace, but it is nothing more than a logical consequence of the inequalities. Thus, on 14 October 2020 two new laws were passed which include several provisions that aim to guarantee equal pay between men and women, as well as a more detailed regulation regarding equality plans which are already in place.
How will companies be affected by these new laws? What are the new requirements and what opportunities do they offer to companies and their personnel? This article answers such questions.
Royal Decree-Law 902/2020 of 13 October 2020, concerning equal pay between men and women, applies to all labour contracts subject to the Workers' Statute, including company directors and senior executives.
This law revolves around the principle of pay transparency, in such a way that a company and its employees can identify any existing discrimination in pay and take steps to reduce it. This principle is established by means of four mechanisms:
- job assessments;
- pay registry;
- pay audits; and
- the right of all employees to be informed.
Job assessments
All companies, regardless of workforce size, must offer equal pay for positions that are of the same value (and not solely for the same job).
However, this may be difficult to determine in practice, when looking at one role and discerning whether it has the same value as another position. The royal decree-law on equal pay includes provisions that help to determine when positions are of equal value. 'Equal value' means that the nature of the functions or tasks involved, the level of studies, professional capabilities or training required to carry out the position and those factors which strictly apply to job performance and the working conditions in which the activities take place are equivalent (not equal).
Pay registry
All companies must have a pay registry where the real amounts paid to all employees are recorded (whether as salary or benefits).
This registry must include a breakdown by:
- sex;
- professional group, professional category or job type (or whatever system of classification that applies to the company); and
- the nature of the remuneration, including gross salary, each supplement and each benefit, one by one.
Employee representatives play a double role – they must:
- be contacted at least 10 days before the registry is drawn up and every time the pay register is changed; and
- have access to all of the registry's contents.
If there are no employee representatives, employees can have direct access to the pay registry, although with certain limitations. Companies must provide their employees only with the different percentages between the average pay of male and female colleagues, separated by the nature of the remuneration and the applicable classification system.
Pay audits
A pay audit must be included in companies' equality plans (which is required only for companies with more than 50 employees) and aims to:
- prove that the company's current remuneration system guarantees the effective application of the principle of equality between men and women;
- highlight those situations in which this equality cannot be reached, so that this can be corrected, prevented and avoided; and
- ensure transparency and traceability regarding the remuneration system.
For these objectives to be met, the audit must analyse the company's remuneration system and establish an action plan to correct any examples of unequal pay that may have been detected.
Although the obligation to negotiate and draw up equality plans existed beforehand, Royal Decree-Law 901/2020 of 13 October 2020 clarifies some relevant aspects that had remained unclear and, therefore, contributes to their implementation and effectiveness.
Although all companies must respect the principle of equality of treatment and take all necessary steps to ensure this, the following companies only must have an equality plan, which must be negotiated with employee representatives:
- companies with 50 or more employees;
- companies with collective bargaining agreements which set out this obligation; and
- companies on which the labour inspection has imposed this obligation further to a penalising procedure.
Equality plans are voluntary for other types of company. Despite the above, all companies (regardless of their size) during negotiations with employee representatives must:
- adopt measures in order to avoid any sort of gender discrimination;
- promote working conditions that avoid sexual or gender harassment; and
- set up specific procedures to prevent these types of harassment and provide a channel of communication for those who wish to make a complaint.
Thus, although in a more flexible manner, companies with fewer than 50 employees must also negotiate and implement measures in the area of equality.
Scope of equality plans
The new regulation sets out that it is possible to negotiate an equality plan at the company group level. In this case, the company and the unions that can legitimately negotiate a collective bargaining arrangement have legal standing.
Substance of equality plans
The first phase of an equality plan should be an examination, during which the gender inequalities are identified and their magnitude estimated along with difficulties that may exist in this area. Once the examination has taken place, measures should be drawn up to reach equality.
The next step is to draw up the equality plan itself, which includes negotiating and agreeing measures that should be adopted in order to reach effective equality between men and women in the company and eliminate discrimination.
Lifecycle of equality plans
Negotiation
Equality plans should be negotiated in a joint committee, with employee representatives and company representatives.
Approval
Once the negotiation period is over, an equality plan will be implemented.
Registration
All equality plans must be filed with the corresponding registry. By filing the plan in this manner, access to its contents is made public.
Monitoring and supervision
A supervisory commission must be established to monitor compliance with and the application of the equality plan. There should be periodic checks and assessments of the equality plan while it is in force.
Expiry
The duration of equality plans must be agreed between all parties but can never exceed four years.
