Spain Gender Pay Gap Reporting Law Guide

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Introduction

Spanish laws on equal pay are among the most comprehensive in Europe. In 2020, the Spanish government introduced two complementary Royal Decrees aimed at addressing gender equality. Decree 901/2020 regulates gender equality plans, and Decree 902/2020 targets pay discrimination based on gender. Both decrees seek to ensure equal treatment of, and opportunities for, employees.

Every Spanish company, regardless of size, must maintain a salary register, categorized by profession and gender. Employers with 50 or more employees must also create a job evaluation system, carry out a remuneration audit, and create an equality plan. Gender pay gaps of 25% or more must be justified.

The Royal Decrees came into force on Jan. 14, 2021, and April 14, 2021, respectively.

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Spain Reporting Requirements

Who Needs to Report?

All employers must complete a remuneration register. Employers with 50 or more employees must perform a job evaluation, remuneration audit and Equality Plan.

What to Report?

Royal Decree 902/2020 establishes four key components for pay transparency:

Remuneration register: Every company is required to prepare a register, including aggregated and disaggregated pay data. All employees are to be included, including executives, senior managers, part-time employees, and people on fixed-terms contracts that have been in place for six months. The register must include average and median pay broken down by gender, base pay and compensation (including bonuses and additional benefits), and professional classification groups. Remuneration registers must be reviewed annually.

Job Evaluation System: Job evaluations are intended to establish equal pay for work of equal value and are used in the remuneration audit and the remuneration register. Employers must ensure job classifications do not contribute to discrimination. Job evaluations are obligatory for companies with 50 or more employees.

Remuneration Audit: The remuneration audit's purpose is to obtain the necessary info to verify whether the company's remuneration system complies with the effective application of the principle of equal pay for work of equal value, and identify any adjusted pay gaps. It must also include an action plan that explains how the employer will close such identified gaps. The audit shall be valid for the duration of the equality plan unless a shorter period is determined. Note, per government issued guidance, the remuneration register and job evaluation are prerequisites to a remuneration audit. Remuneration audits are required for every organization with 50 or more employees.

Equality Plan: Employers with 50 or more workers, or if the company is required to do so per a collective bargaining agreement, or due to ancillary sanctions, must create and publicly register an equality plan. An equality plan is a set of specific measures to ensure equal treatment of and equal opportunities for men and women. It must incorporate, among other measures, the results of the company's remuneration audit.

Equality plans must comply with Chapter 3 of Royal Decree 901/2020, covering the following:

  • Selection and recruitment process.
  • Professional classification.
  • Training.
  • Career advancement.
  • Working conditions, including the salary audit between women and men in accordance with the provisions of Royal Decree 902/2020, on equal pay between women and men.
  • Co-responsible exercise of the rights of personal, family and working life.
  • Under-representation of women.
  • Remuneration
  • Prevention of sexual and gender-based harassment.

Equality Plans are aimed at achieving equal treatment and opportunities for women and men and eliminating discrimination on the grounds of gender. The results of the company's remuneration audit should be included in the plan. Plans are to be negotiated with workers' representatives or labor unions.

After a maximum of four years, a new equality plan is required. Appendix of Royal Decree 901/2020 provides employers with guidance on what to consider in the preparation of an Equality Plan.

Where and When to Report?

Relevant employers must report on the above mentioned requirements as follow:

Regulatory Filing

  • Equality Plans must be submitted to the public register, and will be published in the equality section of the website of the Ministry of Finance and Public Function. Royal Decree 713/2010 requires registration to be mediated through the Register of Collective Bargaining Agreements and Collective Labor Agreements.
  • The remuneration register does not need to be filed to the governing body or publicly, but employers are obligated to store and make readily available for inspection

Internal Disclosure

  • All employees will be entitled to access the register through workers' representatives, or if none, then have direct access, but the information will be limited to the statistical analysis - the average pay percentage differences between men and women. In other words, individual level pay data will not be accessible.
  • Royal Decree 713/2010 requires registration to be mediated through the Register of Collective Bargaining Agreements and Collective Labor Agreements.

Deadlines and Cadence

Remuneration registers must be conducted annually. Employers subject to the job evaluation, remuneration audit, and equality plan must report 4 after becoming subject to the act.

Spain Pay Transparency Requirements

Spanish employers are required to commit to the principle of pay transparency to ensure the effective application of the principles of equal treatment and the prevention of pay discrimination. The purpose of the salary register is to demonstrate that all employees in the same position and function are paid equally.

Employment equity standards

The principle of "equal pay for work of equal value" is binding on all companies, regardless of size or number of employees, and on all collective agreements. Decree 902/2020 defines equal work as follows:

"...when the nature of the functions or tasks effectively entrusted, the educational, professional or training conditions required for its exercise, the factors strictly related to its performance and the working conditions in which those activities are actually carried out are equivalent."

The Risks of Non-Compliance

Sanctions are punitive and among the highest in Europe. Breaches of equal treatment, including discriminatory pay between men and women, are considered a "very serious infringement". If employer conduct constitutes a "serious" or "very serious infringement" potential financial penalties range from €626 to €187,515 (approximately US $683 - $204,679).

Additional sanctions may apply, including the loss of public benefits and bonuses for anywhere from six months to two years.

The Public Sector Contracts Law (Ley de Contratos del Sector Público) prohibits organizations from contracting with companies that fail to prepare an Equality Plan when required.

How Can Trusaic Assist with Spain Gender Equality Plans & Remuneration Audit Reporting Compliance?

1. Comply - Use Trusaic's GPDR solution to complete required reporting by compliance deadlines:

Applicability Determination: Perform an accurate assessment of your applicability, according to jurisdictional specific definitions and regulatory frameworks so you can understand your reporting obligations across the globe.

Deadline Management: Prepare ahead of time with project timelines, timely notifications, and reminders, to keep you on track to meeting jurisdictional deadlines.

Expert Legal Guidance and Support: Benefit from the expertise of our trusted pay equity attorneys, so you understand your compliance requirements across a diverse global regulatory landscape. Receive world-class customer support, including assistance throughout the compliance process.

Streamlined Data Extraction: Collect the necessary data for analysis and submission with a simple click of a button; powered by certified data integrations with world's largest HCM, HR and Payroll platforms, including Workday, SAP, UKG and ADP. Provide data through Trusaic's Workplace Equity platform, a SOC 2 Type II and GDPR-compliant tool for data transmission.

Data Quality Assurance: Trusaic performs data validations to ensure your collected data and information aligns with the standards and definitions provided by each jurisdiction.

Compliant Report Outputs: Take away the burden of reporting by effortlessly generating outputs containing necessary compliance information.

Reporting Checklist: Follow step-by-step guidance on where, when and how to report to any jurisdiction's regulatory body, as well as your required internal disclosure and public posting obligations.

2. Correct - Use PayParity and OpportunityParity to understand, explain and resolve pay disparities:

Risk Assessments: Stay aware of any potential exposure to any government audit or litigation. Our cross-functional team of data scientists, statisticians, and government regulatory compliance experts have rigorously worked to reverse-engineer the calculations that will be used by jurisdictions to estimate pay disparities, so you can prepare in advance.

Understand your Pay Gaps: Leverage Trusaic's pay equity software solution to explain your pay gaps so you can understand the root causes and safeguard from equal pay claims and legal action.

Resolve Pay Disparities: Make pay adjustments where applicable so you can eliminate pay disparities and show improvements in your reported pay gaps from one year to the next.

Identify Barriers to Professional Growth: Ensure workforce diversity and equity with hiring, promotion, retention, and opportunity analytics using opportunity equity software solution.

3. Communicate - Use Trusaic's Workplace Equity Solution to communicate narratives and share salary ranges with confidence:

Workplace Equity Narrative: Communicate the sources of your pay gaps, progress objectives, and corrective measures to employees and internal stakeholders with Trusaic's Workplace Equity product suite. Show data-backed progress in your pay gaps over time.

Salary Range Explainability: Use Salary Range Finder to establish and post competitive and equitable pay ranges to confidently comply with pay transparency laws.

Mitigate Risk of Recurrent Pay Disparities: Ensure new hires receive fair pay offers with the use of external labor market data and internal pay equity analytics to reduce unplanned and expensive pay remediations.

How to Prepare to Comply with the EU Directive

The EU Pay Transparency Directive was approved in 2023, establishing a clear framework for EU member states to apply the principle of equal pay for equal work or work of equal value.

EU member states have three years from June 7, 2023 to transpose the directive into law. Likely implementation dates are 2026, however, some countries may enact legislation earlier. All 27 member states are required to adopt the directive.

Employers operating in EU member states can take several preliminary steps to ensure compliance with the upcoming legislation. The EU Directive includes a requirement for a Joint Pay Assessment where pay gaps are higher than 5%, compared to Spain's existing legislation which requires companies to act only if the pay gap is 25% or higher.

Trusaic is GDPR compliant and can assist any organization in any EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.

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Sign up for PayParity by April 30, 2024 and receive OpportunityParityTM at no additional cost