Quick Hits
- Spain published its draft Royal Decree on 4 August 2026, and Portugal published its draft proposal on 5 August 2026.
- Consultation for both drafts closed recently—24 August for Spain and 25 August for Portugal.
- Further legislation is expected to provide greater clarity on unaddressed provisions.
Despite being published within days of each other, the approaches taken by the two governments vary considerably. Both drafts have been open for relatively short consultation periods; however, that is not to say that they do not offer a helpful insight into how the respective governments plan to transpose the Directive.
Pre-Employment Obligations
As the legislation currently stands, Spain has not yet addressed starting pay or pay-range disclosure at the recruitment stage. This is deliberate and is likely to be the subject of a further consultation and/or draft legislation in due course.
Conversely, Portugal has been clear that applicants must receive their pay or pay range, based on objective gender-neutral criteria, before the employment contract is entered into, closely aligning with the Directive.
Transparency Obligations During Employment and the Right to Request Information
Proactive Disclosure of Pay Criteria
All employers in Spain must provide their staff, in a comprehensible and easily accessible manner, with information on the criteria used to determine pay and the pay levels applicable to different jobs or professional categories. Those criteria must be objective and gender-neutral. Employers with 50 or more workers must additionally provide information on the criteria for pay progression. This information must be kept up to date and be made available to workers whenever the criteria are amended.
In Portugal, employers must display in customary locations, or on their intranet, the criteria used to determine pay, pay levels, and pay progression. Companies with fewer than 50 employees are exempt from the obligation regarding pay progression information.
Both countries, therefore, require proactive disclosure of pay criteria and levels without the need for an employee request.
Right to Request Individual Pay Information
In both Spain and Portugal, workers may request pay information once per year and can expect a response within two months of receipt of the request. In Spain, workers have the right to receive written information on their individual pay and the average pay, expressed in annual and hourly terms and broken down by sex, for workers performing equal work or work of equal value. In Portugal, employees may also receive both individual and average pay level information, broken down by sex, for comparable groups.
The channels through which right-to-information requests are made also vary. In Spain, employees may request such information directly, through workers’ representatives where present, or through the Women’s Institute. While the first two options remain available for employees in Portugal, they may also bring requests through the Commission for Equality in Labour and Employment (CITE).
Pay Register and Pay Audit (Spain)
Under the existing (now amended) Royal Decree 902/2020, all employers in Spain, regardless of size, must maintain a pay register showing the arithmetic mean and median pay, broken down by sex, by each pay component, and by professional classification. Where the arithmetic mean or median of the total pay of one sex exceeds the other by 25 percent, the register must include a written justification. This is a separate and distinct threshold from the Directive’s 5 percent trigger if an employer meets the employee threshold for gender pay gap reporting (see below).
Spain also requires mandatory pay audits for employers with 50 or more workers. These audits must include job evaluation; identification and analysis of pay differences using at least three years of historical data; and preparation of an action plan to remedy any unjustified pay inequality, with a maximum implementation deadline of six months.
Ultimately, Spain is more prescriptive regarding job evaluation; the legislation details specific soft skills and factors to be considered by employers, including hardship, dexterity, thoroughness, isolation, financial responsibility, responsibility for the well-being of others, versatility, interpersonal skills, care skills, conflict-resolution skills, and organisational skills. Conversely, Portugal’s legislation aligns closely with the Directive’s broader language, which assesses four key factors: responsibility, effort, skills, and working conditions.
Gender Pay Gap Reporting
Both countries will require employers with 50 or more workers to report on the gender pay gap—a much lower threshold than the Directive requires. Pursuant to the Directive, employers with 250 or more workers must report annually, and those with between 50 and 249 workers must report every three years. The first reports are due by 7 June 2027 for employers with 150 or more workers and by 7 June 2031 for employers with between 50 and 149 workers.
In Spain, reports are submitted to the newly established Commission for Monitoring Pay Transparency, an interministerial tripartite body that will publish data in an easily accessible format and retain it for at least four years. In Portugal, reports are submitted to the designated data-processing authority, which will similarly publish data and keep it accessible for at least four years.
Enforcement of Unjustified Pay Gaps
Portugal has adopted a more active enforcement model than the Directive requires. Where an unjustified pay gap of 5 percent or more persists within a category of worker, the labour inspectorate notifies the employer to submit a joint pay assessment (involving employee representatives) within forty-five days, with corrective measures to be implemented within ninety days. Pay differences that the employer fails to justify are presumed to be discriminatory.
In Spain, unjustified pay gaps are addressed through the pay audit framework. Where inequality is identified, the employer must prepare an action plan with a maximum six-month remedy deadline. The Commission for Monitoring Pay Transparency collects and analyses the data, but it does not directly initiate enforcement in the manner of Portugal’s labour inspectorate.
Additionally, Spain retains its unique 25 percent register justification threshold for the arithmetic mean or median total pay gap between the sexes, sitting alongside the Directive’s 5 percent reporting trigger. The Portuguese legislation aligns solely with the Directive’s 5 percent joint pay assessment trigger.
Sanctions
Portugal’s draft legislation provides tiered sanctions for noncompliance (“very serious,” “serious,” or “minor,” depending on the obligation breached). For repeated infringement, ancillary sanctions include withdrawal of tax and financial incentives, loss of public benefits, disqualification from public procurement for up to two years, and mandatory training. Spain’s draft relies on its existing labour inspection and sanctions framework and does not introduce any new specific penalties.
Current Status and Next Steps
Neither piece of legislation has a confirmed implementation date, as both are subject to the parliamentary process. Following the closure of the consultation periods, there may be more changes and, one hopes, more clarity on timing.
Information and updates on the progress of the Directive’s implementation across the European Union can be found using the Ogletree Deakins’ EU Pay Transparency Directive Member State Implementation Tracker.
Ogletree Deakins’ London office, Cross-Border Practice Group, Pay Equity Practice Group, and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the Cross-Border, Pay Equity, and Workforce Analytics and Compliance blogs as additional information becomes available.
Daniella McGuigan is a partner in the London office of Ogletree Deakins and co-chair of the firm’s Pay Equity Practice Group.
Mai Barry, a paralegal in Ogletree Deakins’ London office, contributed to this article.
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