Main features of Royal Decree 902/2020, of 13 October, on equal pay for women and men

Written on 25 Mar 2021

The principle of equal pay and remuneration for men and women has acquired a leading role in the field of Labour law. By way of illustration, on 13 October 2020, two extremely important regulations were approved; on the one hand, Royal Decree 901/2020, which regulates equality plans and, on the other hand, Royal Decree 902/2020, on equal pay, the latter being the subject of this publication.

Royal Decree 902/2020, of 13 October (hereinafter "RD 902/2020"), which will enter into force in April 2021, aims to establish specific measures to make effective the right to equal treatment and non-discrimination between women and men in matters of remuneration. The regulation, which is a regulatory development of Article 28 of the Workers' Statute, is applicable to all employment relationships, including those of a special nature.

The starting point for the implementation of equal pay is the application of the principle of transparency of remuneration (art. 3 RD 902/2020). This principle protects the obtaining of sufficient and significant information on the value attributed to such remuneration and it is aimed at identifying discrimination arising from the incorrect valuation of job positions.

The main remuneration transparency instruments aimed to guarantee the transparency of remuneration are presented in the following sections:

1.The remuneration register (arts. 5 and 6 RD 902/2020)

All companies, regardless of their size, are obliged to have a remuneration register for the entire personnel, including top management positions.

Although the remuneration register is an obligation that pre-existed the entry into force of this legal regulation, Royal Decree 902/2020 develops its content. To this end, it establishes that the register must include average values corresponding to the salaries, salary supplements and extra-salary payments of the employees, disaggregated by sex and distributed by professional groups, professional categories, levels, positions or any other applicable classification system.

As a guarantee of the principle of transparency, article 28.2 of the Workers' Statute already indicated that employees had the right to access, through their legal representatives, to the information in the remuneration register. However, RD 902/2020 adds that, in the absence of legal representation, the employees will only be provided with the existing percentage differences in the average remuneration of men and women, disaggregated according to the nature of the remuneration and the applicable qualification system.

2. Remuneration audit (arts. 7 and 8 RD 902/2020)

Companies with the obligation to prepare an equality plan (those with 50 or more employees) must include a pay audit in the plan. The purpose of this audit is to obtain the necessary information to verify whether the company's remuneration system, in a transversal and comprehensive manner, complies with the effective application of the principle of equality between men and women in terms of remuneration.

The remuneration audit has the following implications for the company:

a. The diagnosis of the company's remuneration situation. It will require the evaluation of jobs in relation to the pay and promotion system, as well as the detailing of the relevance of the factors leading to the remuneration gap.

b. The establishment of an action plan to correct pay inequalities, determining objectives, specific actions, a timetable and those responsible for its implementation and monitoring.

3. Transparency in collective bargaining (art. 9 RD 902/2020)

RD 902/2020 establishes a job evaluation system, in order to verify that the definition given to the professional groups guarantees the absence of direct and indirect discrimination between men and women. The negotiating boards of collective agreements shall be responsible for ensuring that the factors and conditions of professional groups and levels respect the criteria of appropriateness, completeness and objectivity, as well as the principle of equal pay for positions of equal value.

4. Administrative and judicial protection (art. 10 RD 902/2020)

Remuneration information, or the lack thereof, may be used to initiate the appropriate judicial procedures, individually or collectively. Companies should bear in mind that, in accordance with the Law on Offences and Penalties in the Social Order, approved by Royal Legislative Decree 5/2000, of 4 August (also known as “LISOS”), salary discrimination is considered a very serious offence, with penalties of considerably high amounts, up to a maximum of 187,515 euros.

All companies should hurry to review the implementation of the above-mentioned instruments, and in case of the lack of any of them, correct it as soon as possible, in order to avoid the financial penalties that non-implementation entails.