Guide to complying with the mandatory pay register

The Spanish Government published a new decree in the Official State Gazette (BOE) aimed at ensuring equity in pay between men and women. This is Royal Decree 902/2020, of October 13, on equal pay for women and men, which provides that all companies must have a pay register (registro retributivo) in place as of April 2021.

The pay register is a document that must set out all of the company’s pay information in detail, showing separately the pay received by the men and the women in your workforce. The purpose of this register is to ensure pay transparency and facilitate access to this information, regardless of the size of the company.

This document must include all information on salaries, including management personnel and senior executives.

Who is required to keep a pay register?

All companies will have to keep a pay register covering their entire workforce, including management personnel and senior executives.

Deadlines

The obligation to keep a pay register had already existed since 2019. However, a 6-month period was established to adapt to the new obligations. As of April 13, 2021, all companies must have a pay register that conforms to Royal Decree 902/2020.

What is it for?

It pursues several objectives:

– To serve as a reference tool for analyzing the causes of pay differences and whether sex is one of them.

– To improve pay transparency in order to bring discrimination to light. In fact, workers are entitled to access their company’s pay register through the workers’ legal representatives at the company.

– To require a justification of deviations. Where, in a company with more than 50 workers, there is a pay gap of more than 25%, the employer must justify the reasons.

– To form part of the information that the company must provide to the works council at least once a year. That information also includes the proportion of women and men at different professional levels and the measures adopted to promote equality.

– To facilitate the pay audits that companies required to draw up an equality plan must undergo.

How is the pay register prepared?

The pay register must include the following data, broken down by sex:

– Total annual salary and the gender gap for this item.
– Annual base salary and the gender gap for this item.
– Annual salary supplements and the gender gap for this item.
– Non-salary payments and the gender gap for this item.
– Annual payments for overtime hours and for supplementary hours, and the gender gap for this item.

Each of these must be broken down by professional category, professional group, and position. In addition, the arithmetic mean and the median of the amounts actually received by each professional group, category, position, etc. must be established.

All information must be broken down by sex and by the nature of the pay, including base salary, all supplements, and non-salary payments, separately. The reference period will be 1 calendar year, unless there are substantial changes in any of the items.

The workers’ legal representative must be consulted 10 days before the register is prepared and before it is amended. If any anomaly or bad practice regarding equal pay is identified, the company must include in the document the measures it will apply to rectify those circumstances.

Where the company has more than 50 workers and there is a difference of 25% or more between the salaries of men and women, the pay register must include a justification that this difference is not related to the sex of the workforce.

Equal pay for work of equal value

The obligation of equal pay for work of equal value is regulated, and the decree defines what is considered work of equal value: work involving the same duties, with the same factors and working conditions, and requiring the same professional or training qualifications for its performance.

In addition, the principle of pay transparency must be applied in pay registers, as well as in pay audits and the job evaluation system, which the regulation also includes and which we will discuss later.

Penalties for not having a pay register

The absence of a pay register may give rise to administrative and judicial actions and/or to the application of penalties for discrimination.

Companies that falsify or fail to prepare the pay register could be penalized under the system of infringements and penalties of the Law on Infringements and Penalties in the Social Order (LISOS), depending on the seriousness of the facts. For the most serious infringements, penalties of between €6,251 and €187,515 may be imposed.