Employer action code: Monitor
The Ministry of Labor and Social Economy has published draft amendments to Royal Decree 902/2020 to transpose the EU Pay Transparency Directive (2023/970) into national law. The draft exceeds the directive’s requirements in some areas, such as gender pay gap reporting, but does not include provisions on pay transparency during recruitment (i.e., the obligation to disclose initial compensation and the ban to inquire about candidates’ pay history), which is expected to be addressed at a later stage. The deadline for transposition was June 7, 2026.
Note: Companies of all sizes are already required to have wage registers showing average pay levels disaggregated by 1) gender, professional group or category (defined by collective bargaining agreement (CBA) in most cases); 2) equivalent jobs (i.e., job title, function); or 3) work of equal value. They are also required to have job evaluation systems based on objective, gender-neutral criteria. Companies with 50 or more employees must also carry out “pay audits” and “equal pay diagnoses” as part of their equality plans.
Key details
Proposed changes to meet the directive’s requirements include:
- Transparency on pay setting: Companies would be required to provide clear and easily accessible information on the criteria used to determine pay, pay levels and pay progression to employees. Criteria would have to be objective and gender neutral. Employers could meet this requirement by referring workers to the applicable CBA, except when the CBA does not establish any criteria or the employer uses a different framework. The requirement on pay progression would not apply to organizations with fewer than 50 employees
- Right to information: Employees would be entitled to request written information on their individual remuneration and average annual and hourly remuneration, broken down by gender, for categories of workers performing equal work or work of equal value. Employees would be allowed to exercise the right annually or when circumstances change. Employers would have to respond within two months of the initial request and remind workers of their rights at least once a year
- Reporting obligations: In addition to existing reporting requirements, companies with 50 or more employees would be required to provide additional detailed information on gender pay gaps by entity and by category of worker to the Commission for Monitoring Pay Transparency and, when required, to workers and their legal representatives. Reporting would be required every year for companies with 250 or more employees and every three years (covering the preceding three years) for companies with 50 to 249 employees. First reports would be due by June 7, 2027, for companies employing 150 or more workers or by June 7, 2031, for companies with 50 to 149 employees
- Pay gap assessments: Companies that already carry out equal pay audits would have to develop an action plan to address any pay gap that cannot be justified based on objective and gender-neutral criteria. Action plans would have to correct existing pay gaps within a reasonable time, not exceeding six months. Currently, employers need to justify gender-based pay gaps of 25% or more, well in excess of the 5% threshold under the directive, but there is no mention of that in the draft
Employer implications
Spain had an unadjusted gender pay gap of 7.3% as of 2024, compared with the EU average of 11.1% (Eurostat data). Given the public dissatisfaction of labor unions with the current draft and the absence of provisions on pre-employment pay transparency, final legislation may differ significantly from the draft version. Employers should monitor the legislative process and start preparing to comply with the new requirements.
Contacts
