New decree enacted to regulate Brazil’s Gender Pay Parity Law
New requirements regarding the information in pay transparency reports and compliance with the Brazilian Data Protection Law are set to impact companies in various ways
On November 23, 2023, Brazil’s Ministry of Labor issued Federal Decree No. 11,795/2023. The decree regulates the recently enacted Gender Pay Parity Law (Law No. 14,611/2023), which provides for equal pay and remuneration criteria between women and men.
Salary Transparency and Remuneration Criteria Report
In July, the Gender Pay Parity Law established the obligation for companies with 100 or more employees to periodically publish a Salary Transparency and Remuneration Criteria Report. In issuing the decree, the Ministry of Labor has now addressed the following aspects of the report:
- Publication method and deadlines: the report must be published twice a year in March and September (the first report was initially scheduled for January 4, 2024, but this deadline has been extended).
These reports must be disclosed on companies’ websites, social media profiles or other channels that ensure they are widely disseminated. Digital versions of the reports must also be sent via a specific platform, which the Ministry of Labor is expected to make available soon.
- Content: While the information that must be provided in the reports has not been specifically defined, it has been determined that companies should include job positions or occupations contained in the Brazilian Occupation Classification System (CBO), together with their respective duties. The value of the following must also be included:
- Contractual (monthly) salary;
- Thirteenth salary;
- Increased pay rates for night shifts and working in risky or hazardous conditions, among others;
- Vacation premium;
- Payments due during notice period;
- Paid weekly time off;
- Tips; and
- Any other payments to the employee stemming from current laws or collective bargaining agreements.
Brazil’s Ministry of Labor will also issue further regulations to establish which information should be included in the Salary Transparency and Remuneration Criteria Report, as well as requirements concerning the format of the report.
- Personal data protection: personal data and information must be anonymized, as per the provisions of the Brazilian Data Protection Law (LGPD).
Action Plan for Mitigating Wage Inequality
In the event the Ministry of Labor identifies differences in a company’s wage and remuneration criteria, the company must implement an Action Plan for Mitigating Wage Inequality, which must encompass:
- Measures, objectives and deadlines that the company will adopt to end wage inequality;
- Training programs on equity between women and men in the job market, diversity and inclusion in the workplace, and capacity building and training for women to enter, remain in, and rise in the job market on equal terms with men;
- Labor union and employee representative participation, as per the provisions of the new decree.
Preferably, employee representation will be established according to the provisions of the relevant collective bargaining agreement. In the event no such provisions exist in the agreement, a committee will be organized and selected for this purpose.
The Ministry of Labor’s duties
The decree states that the Ministry of Labor is responsible for overseeing compliance with wage equality and remuneration criteria regulations. It must also establish a specific channel for receiving complaints.
Despite addressing a series of technical and practical issues that were not covered in the Gender Pay Parity Law, a number of points must still be addressed in future regulations – above all, the information that must be contained in the Salary Transparency and Remuneration Criteria Report.
Companies may also face challenges in complying with the decree due to potential conflicts between the information required for the report and the need to comply with the LGPD.
Moreover, disclosing remuneration data can also be a sensitive topic for companies, especially from the perspective of attracting and retaining professional talent.
Another important point concerns how the Action Plan for Mitigating Wage Inequality could be analyzed as diversity metrics with potential impacts on various aspects of business.
Trade union and employee committee participation in such plans also require special attention, especially in the case of companies whose employees work in multiple jurisdictions represented by multiple trade unions,
Companies should take a holistic approach to analyzing the aspects highlighted above – both in relation to the Salary Transparency and Remuneration Criteria Report and Action Plan for Mitigating Wage Inequality – taking the numerous factors and impacts arising from the regulations into account.