The Spanish government has adopted two complementary decrees intended to improve gender equality in the workplace. One of these decrees details requirements for employers to report compensation by gender across their workforces, and the other specifies rules for companies that must draw up negotiated equality plans.
The Equality Plan Decree (Royal Decree 901/2020) and Equal Pay Decree (Royal Decree 902/2020), both announced on Oct. 13, aim to help alleviate the gender pay gap in companies by guaranteeing and spelling out the provisions in Spain’s previously established equality law, according to a government press release.
The decrees “are one more step to end the gender gap that exists in our society,” Spain’s minister of equality, Irene Montero, said. The wage gap between men and women remains above 20 percent in Spain.
Both decrees seek to ensure equal treatment of and opportunities for employees, including those providing temporary services through an agency, and to “eliminate any gender-based discrimination,” said Raquel Flórez, an attorney with Freshfields Bruckhaus Deringer LLP in Madrid.
Spain adopted legislation in 2007 to promote equal treatment, including the requirement for companies with at least 250 employees to develop equality plans, Flórez noted. The government took additional steps last year, extending the equality plan mandate to firms with at least 50 employees and requiring all companies to keep a wage registry for their employees, she said.
The decrees clarify issues surrounding the equality plans and compensation registries, according to Flórez.
Equal Pay Decree
The equal pay decree establishes processes for identifying and correcting gender discrimination in compensation, according to the Spanish government, which will develop tools that companies can use for free when creating their compensation registers. This decree takes effect in April 2021.
The register will include average and median base salaries and extraordinary payments for one calendar-year period, broken down by gender and professional group, professional category, level, job position or any other applicable classification system, said Ariadna Arriola Cabello, an employment lawyer with Littler in Barcelona, Spain.
Employees’ representatives—whether the elected works councils or unions at the workplace—must be consulted before the employer draws up the compensation register, and employees may gain access to those records through their representatives, Arriola said.
The pay transparency will allow workers to bring actions before the employment courts to correct situations where it appears the genders aren’t being treated equally, according to Flórez.
Valuation of Jobs Targeted
The great challenge now in gender wage discrimination is based on incorrect valuation of jobs, the equal pay decree states. Pay transparency is intended to identify both direct and indirect discrimination, particularly when they result from incorrect job evaluations, it says.
Companies often provide higher compensation for positions usually taken by men compared with those typically filled by women, when the skills needed for those jobs don’t justify the difference in pay, said Flórez. “This assessment will be one of the keys to make the legislation be effective, and it is likely to give rise to conflicts between companies and employees,” she said.
Flórez expects employers will resist having to increase costs for certain jobs. “In my view, it would be good for employers to take the initiative, and make proposals that might be reasonable for the relevant business and the company, rather than waiting for the unions to take that initiative and have then less control over the process and timing,” she said.
Equality Plan Decree
The decree regulating employers’ equality plans and their registration builds on existing law, setting out minimum requirements for such plans.
The order requires companies with at least 50 employees to write up equality plans. Firms with a collective bargaining agreement mandating an equality plan or mandating that the firm that must establish such a plan to adhere to a labor authority sanction also need to comply, Ignacio Regojo, an attorney with Squire Patton Boggs in Madrid, noted in a blog post.
Otherwise, companies may voluntarily draw up equality plans.
Equality plans spell out measures aimed at achieving equal treatment and opportunities in the company between women and men and eliminating pay discrimination based on sex, according to the decree.
Companies that are required to write equality plans must include salary audits assessing the employers’ compensation conditions, and action plans to address any pay disparities, according to Spanish legal experts.
If the audit shows that average or median pay for one gender is at least 25 percent greater than the other, “the salary record must include an objective justification based on evidence that this disparity is not due to gender-related reasons,” Arriola said.
Employers must engage in a negotiation via a committee that includes the employees’ representative or, if there’s no such representative, with the most representative trade unions, Arriola noted. The negotiators will set the period in which the plan will remain in force, up to a four-year maximum.
“Companies that meet the thresholds should already be looking at who they should be negotiating with, in order to start with the diagnosis of the existing situation, and then consider what measures will be necessary and feasible to correct any potential issue,” Arriola said.
She cautioned: “Employers should also keep in mind that failure to comply with the obligation to have equality plans, salary records and pay audits when they are compulsory may benefit an aggrieved employee in any related litigation.”
Dinah Wisenberg Brin is a freelance reporter and writer based in Philadelphia.
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