Companies will need to prepare for their new wage registration obligation
In recent years, interest in effectively fighting the pay gap between women and men has been reinforced. Following the thread of the recommendation of the European Commission of March 7, 2014, the Government and Trade Unions have just signed an agreement on the new Regulation on Equal Remuneration (today, pending publication in the BOE). The agreed norm, regulatory development of the principle of salary transparency introduced by Royal Decree-Law 6/2019, will specify the scope of the new obligation for companies to keep an exhaustive salary record.
Salary transparency implies that the company’s salary information is accessible and that workers and their representatives can deduce how much is charged individually for each job.
To do this, within a maximum period of 6 months from the entry into force of the new Royal Decree, all companies, regardless of their size, will be required to have a salary register., which allows workers access, through their legal representatives, to average salaries, disaggregated by sex, including also that of managerial personnel. Although the specific name of the person is not identified, the information on salaries will include great detail: the arithmetic mean and the median of what is actually received by category or positions of equal value must be reflected, differentiating the salary, the supplements, the extra-salary perceptions, and the mode of each perception. All this, under penalty of the Labor Inspectorate acting or the company being sued for discrimination on grounds of sex.
The measure is complex and comes at a difficult socio-economic time, but fundamental rights are at stake. In addition, it must be appreciated that this new pressure equalizes companies in the market and can have a positive impact on the attraction and maintenance of female talent in companies.
Thus, the registry will reveal whether workers are receiving a salary in line with that received by people of the other sex in the same position of equal value and with a similar experience required.
In the event that there is evidence of remuneration differences between jobs of equal value greater than 25%, the company must be able to provide an objective justification (unrelated here to reasons of sex or gender, direct or indirect) that explains it . The possible justification used by the company will not exclude that the existing difference is treated as an indication of discrimination and, if the argument is insufficient, it could mean, in some cases, having to increase certain salaries to correct those non-legitimate salary differences.
Faced with this complex scenario, the People Directorates have an absolutely strategic role, and have 6 months, before the obligation comes into force, to address, among others, the following critical points :
- First, registration will require a review of the skills policies or job description . And this because training, educational level, versatility, planning and work organization skills, among others, will serve to counteract possible signs of pay discrimination.
- In turn, the internal professional classification is postulated as a decisive factor, identifying the jobs of each company of equal value.
In this way, the organization charts will cease to be a mere guidance document, to become proof that a certain person is on the same horizontal line and that, however, receives a different salary.
- Likewise, internal company documents , such as existing job catalogs, will become highly relevant documents. It will not be enough for the catalogs to define functions and competences, but rather they will become a tool to be able to compare salaries and identify unjustified salary differences.
- From the prevention of occupational risks , factors such as pain and difficulty of work, forced postures, repetitive movements, may be relevant to justify the salary of each position.
- And of course , the company’s remuneration policy should be reviewed , with special analysis of discretionary variable remuneration, or bonuses or supplements, whose amounts may be negatively influenced by indirect factors associated with stereotypes or roles of women (such as, for example, the reduction working hours or part-time dedication).
- Lastly, remote work , which in the context experienced has gone from being a residual tool to becoming a primary form of service provision, can also be key in the review of remuneration policies. And this because it must be taken into account if teleworking or remote work, traditionally more used by women, can influence the bonuses of face-to-face positions or those of displacement in the salary regime and equality policies.
Finally, it should not be lost sight of the fact that the salary register requires prior consultation with the legal representation of the workers , so it is convenient to have all the mentioned critical points analyzed before its implementation, in order to provide an adequate response in each case to the remuneration differences between women and men that arise.
All of the above leads to an urgent redefinition of the remuneration policies of companies, which will have to be designed from a multifaceted perspective (salaries + professional classification + definition of competencies + internal promotion) and neutralizing any influence -direct or indirect- on their amounts of sex of the worker and gender biases.
Ultimately, in this process, the company faces an opportunity to optimize the focus of the salaries it pays. These should be designed not only to meet purely accounting objectives, but they should serve the purpose of promoting the corporate image of the company, which, in no case, should the risk of not respecting the fundamental rights of people be allowed.