Remuneration registration obligation

Since 14 April, all companies are required to comply with a new obligation to have a Remuneration Register. This obligation is regulated by Royal Decree 902/2020, of 13 October, on equal pay for men and women, and is enforceable from 14 April 2021, six months after its publication.

What is the pay register?

This is a record of salary and non-wage remuneration of the entire workforce, broken down by gender and by the professional classification existing in the company. The register must be kept for the entire workforce, including management and senior management.

The purpose of this register is to ensure transparency in the configuration of remuneration, in an accurate and up-to-date manner, and adequate access to the remuneration information of companies, irrespective of their size, through the documented preparation of averaged and disaggregated data.

Who is obliged to do so?

This obligation applies to all companies, regardless of the number of workers they have on their staff, and it is a report that the company must have available, which may be requested by the Labour Inspectorate or the legal representatives of the company's workers, who will have access to the full content of the report.

In the case of companies without a Legal Workers' Representative, any of their employees may request it, although in this case, when access to the register is requested by the worker due to the lack of legal representation, the information that will be provided by the company will not be the averaged data with respect to the effective amounts of the remuneration included in the register, the information shall be limited to the percentage differences that exist in the averaged remuneration of men and women, which shall also be disaggregated according to the nature of the remuneration and the applicable classification system.

What is the purpose of registration?

The aim is to ensure transparency of remuneration in the setting of remuneration, in an accurate and up-to-date manner, and adequate access to remuneration information for companies irrespective of their size.

The principle of pay transparency is the principle underlying pay records and pay audits, and is aimed at:

1. Obtain sufficient and meaningful information on the value attributed to workers' remuneration.

2. Identify both direct and indirect discrimination, especially indirect discrimination, such as incorrect job evaluation, which occurs when work of equal value is paid less without any objective justification for the difference. An indirect situation would be a male and female worker who do practically the same tasks with the same training, one has a higher and the other a lower category/position, and therefore different pay.

Combat the pay gap in the company (difference in wages between men and women higher than 25% for jobs of equal value), in case the difference in wages between men and women is higher than 25% for jobs of equal value, the employer has to make a report justifying the difference, or in case it cannot be justified, eradicate the pay gap.

How does the legislator require us to integrate the principle of pay transparency in the company?

Through 4 ways that oblige companies according to their peculiarity:

1. Remuneration registers for all companies

2. Remuneration audit for companies that need to make an equality plan

3. The job evaluation system of the professional classification contained in the company and in the collective bargaining agreement that applies.

4. Information to workers

When does the Remuneration Register have to be carried out?

The register must be kept annually, on a yearly basis, and this year, 2021, a remuneration register corresponding to salaries in 2020 must be drawn up, which will be valid for one year.

Do you have to register with an administration?

The Remuneration Register is not registered with any Public Administration, it is a Report that the company will keep and provide when required to do so by the parties authorised to do so.
What format should companies use for this registration?
As for the format of the document containing the register, the official websites of the Ministry of Labour and Social Economy and the Ministry of Equality may set the format of the document. On 15 April 2021, the Ministry of Equality has published a guide, as well as a possible format for its implementation:
Tools for Equality - Equality in the Company - Ministry of Equality

In any case, no mandatory format/format has been established to date, so each company can develop its own format as long as it contains the required information.

Are workers' representatives involved in the design of the register?

The workers' legal representatives must be "consulted" at least ten days before the register is drawn up. Likewise, and with the same notice, they must be consulted when the register is modified in the event of a substantial alteration of its contents.

Are companies with more than 50 employees obliged to keep a Remuneration Register?

These companies are obliged to draw up an equality plan and must include a remuneration audit in the plan. In this case, the duration of the Remuneration Register will be the same as that of the approved Equality Plan. The requirement of an Equality Plan is enforceable from March 2021 for companies with more than 100 employees, extending to companies with more than 50 employees from March 2022.

The pay audit entails the following obligations for the company: the evaluation of jobs (both in relation to the pay system and to the promotion system); the relevance of other factors triggering the pay gap, as well as possible deficiencies or inequalities in the design or use of reconciliation and co-responsibility measures in the company, or the difficulties that workers may encounter in their professional or economic promotion, or unjustified demands for availability; and the establishment of an action plan to correct these inequalities.

Consequences of not registering

Failure to keep a pay register is a breach of the company's obligations as an offence under the Law on Offences and Penalties in the Social Order, and may even be considered an offence in the case of discrimination on grounds of sex.

The following table sets out the types of misconduct and penalties related to the Remuneration Register:

Who is the person obliged to keep the remuneration register?

The company is obliged to make the Remuneration Register.

From the EJE ASESORES team, we make a continuous training effort to adapt to the continuous regulatory changes, in order to facilitate the fulfilment of our clients' labour obligations. Likewise, in order to collaborate with our clients in the fulfilment of their obligations in terms of equality and remuneration records, we have made new investments for the purchase of applications that develop possible formats that provide a solution to the remuneration record required of each company.

If you have any queries regarding the remuneration register, as well as compliance with this new business obligation, we are at your disposal. If you are interested in having it drawn up, please contact us and we will study each case on a case-by-case basis.