On 14 October 2020, the Spanish government approved two Royal Decrees intended to work in tandem to clarify gender equality policy and reporting obligations adding clarity and teeth to the Gender Equality Law 2007. As a result, employers with more than 50 employees will be required to maintain gender pay records for all employees and implement equality plans.
Royal Decrees 901/2020 (Gender Equality Plan) and 902/2020 (Gender Pay Reporting) will enter into effect on 14 January 2021, and 14 April 2021, respectively.
Despite existing gender pay gap laws, gender inequalities persist in Spain with women earning 22% less than their male colleagues. The new measures aim to promote gender equality in the workplace by creating and enforcing a more detailed legal framework through which companies must monitor, report and attempt to remediate any inequalities found.
Royal Decree 901/2020 – Gender Equality Plan
Employers with a minimum of 50 employees (previously 250) will be mandated to establish an equality plan to manage and remediate gender equality issues. Companies that already have an equality plan because their collective agreement dictates it should adapt their content in accordance with the new Decree by 14 January 2022. The equality plan’s negotiations should start by 7 March 2022, for companies with 50 or more employees and by 7 March 2021, for companies with 100 or more employees. Equality plans are optional for employers with less than 50 employees.
All categories and types of employment (supply contracts, part-time contracts, etc.) will be taken into consideration for the calculation of the number of employees that trigger the new legal obligation and calculations must be performed twice a year to determine if the implementation threshold is met. The equality plan is maintained until the end of its term even if the number of employees falls below 50. If an employee threshold triggering the new legal obligation is reached, employers will be mandated to start negotiating an equality plan within three months from reaching the legal employee threshold or less if a lower threshold is mandated by their collective agreement.
Equality plans should be negotiated between the company and employee legal representatives with the advice of outside experts as needed. The equality plan must be negotiated, approved and published within a maximum period of one year. The negotiation committee should analyze all the positions and workplaces including, at a minimum, the recruitment processes, professional classifications, trainings, promotions, gender pay audits, working conditions, sexual harassment internal policies and female representation. Groups of companies can establish a single equality plan so long as gender pay information for each company is included.
A pay audit must be completed before the equality plan is negotiated and the equality plan must also include the audit and an analysis of the results; the parties, scope, duration, quantitative and qualitative goals of the plan; the measures and steps that need to be taken to correct any inequality as well as their priority; a monitoring, evaluation, and review system; an actions calendar and the body in charge of those items; and a validity term for the plan (maximum validity term is four years).
Equality plans need to be recorded with the register of collective bargaining agreements and collective labor agreements.
Royal Decree 902/2020 – Gender Pay Reporting
As of 14 April 2021, employers will be mandated to maintain gender pay records for all employees, including executives and senior managers.
The pay records include pay data broken down by gender in each professional classification (group, level or position) and will include salary, allowances and non-salary compensation such as benefits, benefits in kind, time off, etc. Employers will be required to provide an explanation for any gender pay gap of a minimum of 25%. The Spanish government will publish additional guidance on this topic to help employers best comply with the maintenance of the new pay records obligation.
A pay audit should be performed and included in the equality plan. The pay audit should include all factors affecting pay differentials and promotions for each professional classification. Guidelines and best practices on pay audits will be developed by the Women’s Institute and the Equal Opportunities Institute.
All employers should promote the principle of equal pay for work of equal value by ensuring a thorough review of companies’ internal policies for job assessment. Employees must have access to information on differences in the average pay of women and men broken out by the type of payment and the applicable classification through their representatives.
Employers may face penalties from EUR 6,251 to EUR 187,515 for noncompliance with nondiscrimination in pay based on gender.