The European Commission has set out to promote pay transparency and the principle of equal pay for men and women. This strategy is legally articulated through Directive 2023/970 of the European Parliament and of the Council of 10 May 2023. Once transposed into Spanish law, this new regulation will oblige companies to share information on the remuneration received by women and men for the same work or for work of equal value in their organisation.
Equal pay laws in Spain
In recent years, a number of regulations on equal pay have been published in Spain. Specifically, Royal Decree 902/2020 of 13 October on equal pay for women and men implements issues set out in Royal Decree Law 6/2019 of 1 March on urgent measures to guarantee equal work and equal opportunities for women and men in employment and occupation.
In line with the European strategy, this Royal Decree is based on two principles:
- Equal pay for work of equal value.
- Pay transparency through a series of instruments: a register with information disaggregated by sex, job classification and type of pay; a company audit that includes job evaluation; a plan to correct inequalities; and a job evaluation system that allows for a real comparison between jobs of equal value.
6 changes to equal pay rules introduced by Directive 2023/970
However, the transposition of Directive 2023/970, to be effective by 7 June 2026, will require adjustments to Spanish legislation:
1.- The scope of application shall be extended to job applicants during the selection process. Job applicants shall have the right to receive information on the starting pay for the position for which they are applying, as well as on the collective agreement applied. The employer may not ask questions about the applicant’s salary history.
2.- The pay gap shall be publicly available on the company’s website or any other means of dissemination.
3.- The average pay gap between workers is reduced from 25% to 5%, after which the company must justify that the difference between the two genders is due to neutral criteria.
4.- There will continue to be compensatory and dissuasive compensations for the damages that workers may have suffered as a result of non-compliance with the principle of equal pay. The great novelty is that these compensations may not be capped or consist of fixed amounts. At present, it is a widespread procedural practice in Spain to use the penalties provided for in the Law on Social Order Infringements and Penalties as a scale for these damages.
5.- The limitation period for cases of discrimination due to differences in pay may not be less than three years. It is currently one year.
6.- The possibility remains open that the social partners may be responsible for the application of this Directive, especially with regard to the tools or methodologies that measure the value of work in the terms of the Directive, and with regard to possible fines or financial penalties.
Awaiting transposition
In short, the transposition of Directive 2023/970 of the European Parliament and of the Council of 10 May 2023 into Spanish law will imply the appearance of new legal obligations that companies will have to comply with as early as mid-2026.