Spain: new regulations on equality plans and equal pay between men and women

On 14 October Spain’s Official State Journal (BOE) published two new Royal Decrees on equality: Royal Decree 902/2020, of 13 October, on equal pay between women and men (RD 902/2020) and Royal Decree 901/2020, of 13 October, which regulates equality plans and their registration and which modifies Royal Decree 713/2010, of 28 May, on the registration and filing of collective employment agreements and collective bargaining agreements (RD 901/2020). The new regulations will have a significant impact on companies as they implement a number of obligations that had been included in Royal Decree-law 6/2019, of 1 March, on urgent measures to ensure the equal treatment of and equal opportunities for women and men in employment and in the workplace (“RD 6/2019), such as establishing a payroll record or lowering the thresholds for requiring companies to negotiate an equality plan, and imposing obligations on companies to implement a series of specific measures.

It should be pointed out that RD 902/2020 will enter into effect 6 months after it was published in the BOE (i.e. on 14 April 2021) while RD 901/2020 will do so 3 months after it was published (i.e. on 14 January 2021). This will give companies a transition period within which to prepare and plan the measures necessary to comply with the new regulations.

Royal Decree 901/2020

Royal Decree 901/2020, of 13 October, which regulates equality plans and their registration and which modifies Royal Decree 713/2010, of 28 May, on the registration and filing of collective employment agreements and collective bargaining agreements.

RD 901/2020 regulates equality plans and brings in measures aimed at preventing any kind of discrimination between men and women, fosters working conditions to avoid sexual harassment and harassment on account of gender and establishes specific procedures to prevent them; it also provides grievance and whistleblowing channels for victims.

Mandatory equality plans

RD 901/2020 establishes that all companies with 50 or more employees must design and apply an equality plan, in compliance with the transitional application established by Organic Law 3/2007, of 22 March, for effective equality between women and men, with regard to equality plans (from 7 March 2021 onwards in the case of companies with more than 100 workers, and 7 March 2022 onwards for companies with 50 or more workers). Implementing an equality plan will be voluntary for all other companies and the provisions of RD 901/2020 will apply.

Negotiation process

RD 901/2020 establishes the different deadlines for negotiation:

• Companies must start negotiations within 3 months from the date on which they reached 50 workers. Where companies have an obligation to implement an equality plan under applicable collective bargaining agreements, they must do so within the deadlines established in the collective bargaining agreement concerned or within 3 months of the bargaining agreement being published.
• Equality plans, including any status reviews that take place previously, must be negotiated with the workers’ legal representatives. A negotiation committee will be formed of company and worker representatives, with equal representation from both sides, as established in the regulation.
• Companies must have negotiated and approved an equality plan and it must be been submitted for registration within 1 year from the day following the deadline for starting negotiations.
• An equality plan will need to approved by the company and a majority of the workers’ representatives.

Content and registration of equality plans

• A status review will have to be conducted before developing an equality plan, from which information can be gleaned to design and establish appropriate measures aimed at guaranteeing equality.
• RD 901/2020 establishes the minimum content that equality plans developed under the regulation must have with the aim of eradicating sexual discrimination in the workplace.
• Equality plans must implement the equality measures brought to light by the current status review conducted within each company.
• Equality plans must be filed and registered at a public register and will be available to the public.

Adaptation of pre-existing plans to RD 901/2020

Equality plans that were already in place when RD 901/2020 enters into effect must be adapted, after a negotiation procedure has taken place, to bring them into line with the provisions of the regulation by 14 January 2022.

Royal Decree 902/2020

The main aim of RD 902/2020 is to regulate equal treatment and non-discrimination in terms of pay, using pay transparency mechanisms that make it possible to obtain efficient and significant information on the value given to pay, thus preventing salary discrimination; it is mandatory for all companies, collective employment agreements and collective bargaining agreements.

Mechanisms for ensuring that pay transparency is effective: payroll record, equal pay audit and transparency in collective bargaining

RD 902/2020 provides the instruments that make it possible to effectively implement pay transparency; specifically, it contains provisions on payroll records and equal pay audits.

From a practical perspective, companies must take into account the following when RD 902/2020 enters into effect:

• All companies must keep a payroll record for their entire staff, including executive and senior management personnel. Although that obligation was already imposed by RD 6/2019, it had not been implemented by regulatory provisions. RD 902/2020 establishes that companies have 6 months to adapt to the new provisions from its publication date.
• The workers’ representatives will be consulted beforehand on:
  • the keeping of a payroll record; and
  • when the record is modified, at least 10 days in advance.
• The payroll record must include:
  • average salary across the company’s staff,
  • bonuses and other extraordinary salary items, and
  • fringe benefits, broken down by gender and by professional group, category, job position, level, or any other applicable system of classification.
• The reference period will be one year, except in the case of necessary modifications.
• The official websites of the Spanish Ministry for Employment and Social Economy and the Ministry for Equality provide a template on which the payroll record may be based, although use of that template is optional.
• Where a company with more than 50 workers and where there is a 25% or greater difference in the pay received by women and men, it must include in the payroll record a non-gender-related justification for that difference in pay.
• Workers may access the information in the payroll record through their workers’ representatives (if any) or directly, thus guaranteeing the principle of transparency enshrined in section II of RD 902/2020.
• Equal pay for part-time workers: The principle of proportionality in the pay received by part-time workers applies when the purpose or nature of the work so requires and this is established by a legal or regulatory provision, or by collective bargaining agreement.

Equally, companies that implement an equality plan must include an equal pay audit, which will have the same duration as the equality plan itself, unless it is decided that the duration will be shorter. An equal pay audit entails companies:

(i) having to conduct a review into the current salary situation at the company; and

(ii) having to establish an action plan to correct and possible inequalities in pay.

Collective bargaining agreement must at the same time ensure equal pay for jobs with the same value, making sure that there is no gender discrimination in the pay received by professional groups.