Spain’s draft pay transparency rules builds on existing regulations

At a glance

• Spain has published a draft Royal Decree to largely transpose the EU Gender Pay Transparency Directive (Directive) by expanding and adapting existing obligations.
• Spain's proposed legislation goes beyond the Directive, particularly by applying certain transparency and reporting obligations to employers with just 50 or more employees.
• However, the draft does not yet fully implement all aspects of the Directive, meaning further legislative measures are likely to be required before transposition can be considered complete.

Before the adoption of the Directive, Spanish law already required employers to maintain pay registers, and imposed additional obligations on employers with 50 or more employees through equality plans and mandatory pay audits. Its new draft legislation seeks to integrate the Directive's requirements into this existing framework.

First, it strengthens pay transparency by requiring employers to inform employees about the criteria used to determine remuneration and pay levels. Employers with 50 or more employees must also disclose the criteria governing pay progression. These criteria must be objective and gender-neutral.

Second, it introduces a new individual right to pay information. Employees will be entitled to request written information about their own remuneration and the average remuneration, broken down by sex, of workers performing the same work or work of equal value. Employers must generally respond within two months and remind employees annually of this right.

Third, Spain expands its existing pay audit regime by requiring employers to analyse pay data covering the previous three years; assess the causes of pay differences; evaluate promotion and progression systems; and adopt corrective action plans where unjustified disparities are identified.

Finally, a new Commission for Monitoring Pay Transparency will collect and publish pay gap data, monitor compliance and support the exercise of employee information rights.

Importantly, employers should note that while the Directive phases in pay gap reporting obligations for employers of 100 or more employees, the draft Spanish law adopts a substantially lower threshold of 50 employees.

Notably, the draft Royal Decree also expressly states that it only partially incorporates the Directive into Spanish law. The draft does not cover some of the Directive’s recruitment-stage transparency requirements, such as obligations relating to salary information for job applicants and restrictions on requesting applicants’ pay history. These areas may require further legislative action.

In addition, measures to ensure full compliance with the Directive’s requirements on remedies, compensation and enforcement may be needed.