The government in Spain has adopted two new Royal Decrees to address the gender wage gap and ensure the effectiveness of equality plans. These regulations implement two key employer obligations: (i) to guarantee equal pay for men and women, and; (ii) to draw up and register equality plans.
Among the most relevant developments contemplated by Royal Decree 902/2020, on equal pay between men and women, which applies to all labour relations regulated by the Workers’ Statute from 14 April next year, we should highlight the following:
- All companies must keep a salary register of all their employees, including management and senior roles.
- The new Royal Decree now specifies the need to break down by sex the average and the median of what is actually received as salary, salary supplements/allowances and non-salary remuneration for each occupational group, professional category, level, position or any other applicable classification.
- All employees will be entitled to access the register through workers’ representatives. If there is no collective representation of this sort, then the employees themselves will have access to the register, but the information which must be provided by the company from it will be limited to the percentage differences that exist in the average pay of men and women broken down according to the nature of the payment and the applicable classification. The register does not give ordinary employees the right to see the actual salary numbers of their colleagues, merely to access the results of statistical analysis of those numbers.
- Companies which draw up an equality plan must include in it a salary audit carried out prior to the negotiation of the plan which must in turn must include an analysis of the salary situation in the company through the evaluation of job positions and the establishment of an action plan in order to correct statistical pay inequalities (specifying actions, deadlines, people responsible for their implementation, etc.).
- Companies that carry out salary audits shall have a salary register that includes a statement of their justification if the average remuneration of one sex is at least twenty-five percent higher than the other.
- Finally, this Royal Decree establishes that the information on salaries or its absence may be used to carry out administrative and legal actions, both individual and collective, in accordance with the Law on Infractions and Sanctions in Social Order, with the application, where appropriate, of the sanctions that may correspond.
Royal Decree 901/2020, which regulates equality plans and their registration establishes the obligation to draw up an equality plan where companies (i) have fifty or more employees, (ii) have an existing obligation to do so under the applicable collective bargaining agreement, or (iii) have to do so in compliance with a sanction adopted by the Labour Authority. In all other cases, it will be voluntary.
In summary, this Decree provides the following rules regarding equality plans and the procedure for their implementation:
Number of employees in the company
It sets out how the number of employees is to be calculated for determining whether the fifty threshold is met. This must be done at least twice each year in June and December.
The total workforce of the company will be taken into account, including employees on discontinuous fixed-term, fixed-term, temporary or agency contracts.
Once the threshold making the equality plan compulsory has been reached, the obligation to negotiate, draw up and implement the equality plan arises. Once the negotiating committee has been set up, this obligation will continue even if the number of employees then falls below fifty, lasting until the end of the agreed period of validity of the equality plan agreed, subject to a maximum of four years.
Deadline for negotiation
In addition, the Decree sets a number of deadlines:
- A maximum period of three months after the company has reached the minimum threshold within which to initiate the procedure for setting up the negotiating committee.
- A maximum period of one year to negotiate and approve the equality plan and submit an application for registration of it, starting from the day after the end of the period for initiating the negotiation procedure.
Finally, the only transitional provision of the Decree requires that equality plans already in force when it comes into force next year must be amended to comply with it within 12 months from that date, i.e. by 14 January 2022.
Negotiation procedure – the solution to an historical problem.
The new Royal Decree provides a solution to an historical problem in the negotiation procedure for equality plans in companies without workers’ legal representatives. It mandates the use for this purpose of the most representative trade unions and those representing the sector with the right to form part of the negotiating committee for the collective bargaining agreement.
Content of equality plans
A compliant equality plan will have to include at least the following:
- Determination of the parties.
- Personnel and territorial scope, plus duration.
- Report on the analysis of the salary equality/inequality situation of the company, or of each of the companies of the group.
- Results of the salary audit
- Definition of the qualitative and quantitative objectives of the equality plan.
- Description of specific measures, implementation period and their order of priority.
- Identification of the means and resources, both material and human, necessary for the implementation, monitoring and evaluation of each of the measures and objectives.
- Calendar of actions for the implementation, monitoring and evaluation of the measures of the equality plan.
- Monitoring, evaluation and periodic review system.
- Composition and functioning of the commission or other joint body in charge of the monitoring, evaluation and periodic review of the equality plan.
- Procedure for modification, including the procedure for resolving possible discrepancies that may arise in the application, monitoring, evaluation or review.
Validity of the equality plan
The period of validity of the equality plan is to be determined by the negotiating parties, but will not exceed four years. However, the regulation provides so many situations where the plan must be revised that in practice it may be difficult to agree a shorter period anyway.
Equality plans will be subject to compulsory registration in the register of collective bargaining agreements maintained by the Ministry of Labour. In order to proceed with registration, the equality plan supporting statistical sheet must be completed and submitted also.