In 2020, Spain passed two new laws, including Royal Decree-Law 902/2020, which included provisions to guarantee equal pay between men and women.
From April 14, 2021, companies must produce and maintain a remuneration register regardless of their size. It will hold the criteria they use to determine the wage remuneration of employees.
To comply with this new legal requirement and increase transparency in pay, firms must:
- review their remuneration policies
- reconcile jobs and categories for the determination of analysis analyze the data and make calculations as required to produce the remuneration report
- follow the legal requirements and prepare a general diagnostic report with the results obtained
- identify possible inequalities in the wage register with detailed information of any bias so that the company can proceed with its justification or resealing if applicable.
How organizations ensure they are promoting equal pay
Job assessments:
All companies, regardless of workforce size, must offer equal pay for positions of the same value and not solely for the same job.
It may be difficult to determine whether when looking at one role and discerning if it has the same value as another position. To address this, the legislation helps 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 amounts paid to all employees are recorded, whether as salary or benefits.
This registry must include a breakdown by:
- gender;
- 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 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 directly access 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 the company’s equality plans – 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 analyze the company’s remuneration system and establish an action plan to correct any examples of unequal pay that may have been detected.
The right of all employees to be informed:
This register, marked RD 902/2020, will be made available for inspection by the Ministry of Labor, which may request it at any time with a reference period of one calendar year. The inspection may be sanctioned in the event of non-compliance.
Companies that do not produce a remuneration register could be sanctioned, as established by the regime of the Law on Infringements and Sanctions in the Social Order – LISOS (RDL 5/2000 of 4 August). Firms should be aware that wage discrimination is considered a very serious infringement, the penalty for which has associated fines ranging from €6,251 to €187,515.
The salary information to be contained in the remuneration register, pending a final format requirement by the government, includes:
- total annual salary
- annual base salary
- annual salary supplements
- extra- salary allowances
- annual payments for overtime and complementary hours.
Each must be broken down by professional category, professional group, workplace and must indicate the arithmetic mean and the median of what is perceived by each professional group, category, position.
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