Remuneration Differences Assessment Plan: what to Know (and Do) to Comply with the Law?

Pay equality between women and men has increasingly taken a prominent place on the labor and social agenda – and all indications are that it will remain so for the foreseeable future.

In this context, companies with 50 or more employees are being notified by the Authority for Working Conditions (ACT) to submit a Remuneration Differences Assessment Plan whenever data from the Single Report reveals indications of pay inequality between women and men.

What does fulfilling this obligation mean in practice? What is expected from companies? What are the deadlines? And what are the consequences of non-compliance?

1. What is the Remuneration Differences Assessment Plan?

It is a document in which pay differences between women and men performing equal work or work of equal value are identified and assessed, based on objective, neutral, and non-discriminatory criteria. This Plan is more than a formality – it requires a detailed technical analysis and justification of the company’s pay practices.

2. What should the Remuneration Differences Assessment Plan include?

The Plan must cover at least the following elements:

i) Definition of goals and targets;
ii) A timeline outlining the phases and steps needed to achieve the proposed objectives;
iii) Identification and description of job positions and the factors and subfactors used to assess them;
iv) Grouping of job positions by gender;
v) Determination of job value and identification of pay differences;
vi) Identification of any unjustified pay differences and proposal of corrective measures;
vii) Conclusions drawn from the assessment.

3. What is the deadline for submitting the Plan to ACT?

The company must submit the Plan within 120 working days.

4. Is it mandatory to form a working group composed of employer and employee representatives?

No. It is a recommendation, justified by the considerable work involved in gathering and analyzing information required for the assessment.

5. Can only the data from the Single Report be used in preparing the Plan? Which employees should be considered?

The Plan should be based on the most up-to-date information about the company’s workforce, in order to reflect the current organizational reality at the time of its preparation.

All employees under contract at the time of the assessment must be considered – including those on fixed-term and open-ended contracts, working full-time or part-time, and even those in a probationary period.

6. Can the assessment consider only the base salary of employees?

No. The Plan must cover all components of remuneration beyond base salary. All pay supplements and other financial benefits provided to employees must be considered.

7. What criteria should be used to assess job positions?

Skills, responsibilities, working conditions, and effort. These evaluation factors may be subdivided into subfactors tailored to each company’s reality.

8. What if no unjustified pay differences are found after the assessment?

In that case, the company must document this conclusion in the Plan, explain the criteria used, and demonstrate that no gender-based discriminatory pay gaps exist.

The absence of corrections does not eliminate the need to conduct the job evaluation or justify the Plan.

9. What are the consequences of non-compliance?

Both failure to submit the Plan to ACT (within the 120 working days) and failure to implement the Plan or report results to ACT (within 12 months) constitute a serious administrative offense.

If it is presumed that the identified pay differences are discriminatory, this may be considered a very serious administrative offense.

Additionally, an accessory penalty may be applied, such as disqualification from participating in public tenders or auctions for up to two years.

10. My company has not been notified by ACT. Should we still prepare an Assessment Plan?

Yes. Regardless of ACT notification, companies are always required to ensure pay equality between women and men.

The legislation also outlines other situations in which the company may be required to submit the Plan – for example, if a worker claims pay discrimination or if the company is notified by the Commission for Equality in Labour and Employment (CITE).

Moreover, voluntarily preparing the Plan helps detect and correct internal inequalities and anticipate possible future inspections, safeguarding the company against allegations of pay discrimination.