Brazil’s Ministry of Labor clarifies questions about pay parity and remuneration criteria

On February 7, 2024, the Brazilian Ministry of Labor and Employment (MTE) and Ministry of Women held a live event to address questions about the Salary Transparency and Remuneration Criteria Report (Transparency Report) provided for in the recently enacted Gender Pay Parity Law (Law No. 14,611/2023).

Although not every question about the report was answered at the event, it did provide a view of certain aspects of how the law will be implemented in practice, as summarized below:

The report: key takeaways

• The MTE should make the Transparency Report available to companies on March 15;
• The Transparency Report for the first half of 2024 will consider some of the data on the e-Social platform from 2022. In order to validate the number of employment bonds, only those that were active as of 2023 will be considered;
• The Transparency Report will be prepared based on Brazil’s Occupation Classification System (CBO). The MTE emphasized the need to update CBO entries in regard to job activities and positions. For example, if an employee moves from a technical position to a management position, the change must be updated in the CBO.

The layout of the report, as presented at the event, indicates it will contain data on:

• The ratio between men’s and women’s median contractual and entry-level salaries;
• The ratio between men’s and women’s actual final salaries (taking into account deductions and extras), considering the major occupation groups within the CBO;
• Percentages of black (including brown) and non-black men and women;
• The existence of policies and criteria that companies declare in their respective Salary Equality Declarations.
• There was no confirmation of whether the Transparency Report will contain additional data.
• Companies must obtain the Transparency Report from the system by March 31, 2024. However, the deadline for companies to disclose the Transparency Report on their respective communication channels (e.g., websites) was not made clear;
• Profit-sharing (PLR) payments will not be considered in comparisons of men and women;
• The Transparency Report will consider all professionals who are paid a salary, including intermittent workers and apprentices.

Salary Equality Declarations

• Companies must fill out the information regarding their Salary Equality Declarations on the Emprega Brasil Portal by February 29, 2024;
• The live event did not clarify precisely what the MTE defines as a career plan (plano de carreira). However, it was stated that the company’s employees must be widely aware of the plan;
• Companies with fewer than 100 employees as of December 31, 2023, do not need to fill out the Salary Equality Declaration. Such companies can indicate this condition on the Emprega Brasil Portal.

Zero tolerance for violations

• At the event, mention was made of potentially clarifying procedures for when salary and remuneration criteria inequality between women and men is detected. However, the point at which this will be clarified was not revealed – specifically, whether this will occur before or after the company is notified to implement an action plan;
• According to the MTE, any inequality detected in a company’s salary and remuneration criteria will be considered a violation of the Gender Pay Parity Law, and a zero-tolerance approach will be applied.

Although the MTE’s representatives at the live event alleviated certain concerns about potential disclosures of personal data and salary practices, it remains important for companies to consider the potential impacts of disclosing the Transparency Report.

The confirmation that the BCO will be used to prepare the Transparency Report increases the MTE’s chances of identifying discriminatory practices and there is potential for inaccuracy in this regard. Companies should therefore evaluate if they need to take measures to reduce legal and reputational risks.

For more information on this topic, please contact Mattos Filho’s Labor & Employment practice area.