Spain Moves to Close Gender Pay Gap with New Transparency Law

The Spanish Government is finalizing a reform to require companies to disclose more salary information, aiming to reduce the gender pay gap. Driven by a 2023 European directive, the new rules will compel businesses to communicate the criteria they use for salary increases and provide greater access to pay data for employees and their representatives. The initial draft legislation will be implemented via royal decree to bypass parliamentary process, focusing on developing existing equal pay regulations.

However, unions UGT and CCOO are pushing for stronger measures, including legal penalties for companies with gender pay gaps exceeding 5% and inclusion of these companies in public tenders. The government has committed to considering these requests, which could necessitate parliamentary approval. The decree also invalidates contractual clauses prohibiting employees from disclosing their salaries and mandates a two-month response time to employee requests for pay information.

The new rules will require companies to maintain detailed salary records and conduct regular audits to identify and correct unjustified pay differences.