Regulation governing law on equal pay for women and men published

On November 23 and 27, 2023, respectively, Decree No. 11,795, of November 23, 2023, and MTE Ordinance No. 3,714 were published to regulate certain provisions of the “Equal Pay Law” for men and women (Law No. 14,611/2023), mainly regarding the biannual reports on wage transparency and action plans to mitigate inequality.

These obligations must be complied with by private companies with 100 or more employees, and whose registered office, branch or representation is located in Brazil.

Law No. 14,611/2023 regulates two obligations of particular note, as follows:

1. Wage Transparency Report on Remuneration Criteria:

According to the provisions of this Ordinance, the Wage and Remuneration Criteria Transparency Report will be drafted by the Ministry of Labor and Employment, based on the information provided through eSocial and on the additional information inserted in the tab called “Equal Pay and Remuneration Criteria”, to be implemented in the employer’s area of Portal Emprega Brasil.

• Content:

The transparency report must encompass, at least, the following information:

Section I – data extracted from eSocial:

a) employer registration data;

b) total number of workers employed by the company in every branch;

c) total number of workers employed, sorted by gender, race and ethnicity, with the respective contractual salary and monthly remuneration amounts;

d) positions or occupations held by the employer, as listed in the Brazilian Occupation Classification System (“CBO”); and

Section II – data extracted from Portal Emprega Brasil:

a) existence or non-existence of a career framework as well as a job and salary plan;

b) remuneration criteria for employee’s access and advancement or career progression;

c) existence of incentives to hire women;

d) identification of criteria adopted by the employer for promotion to positions of leadership, management, and direction; and

e) existence of initiatives or programs, by the employer, that support the sharing of family obligations.

• Data

All data included in the report must be anonymous, according to the Brazilian General Data Protection Law (“LGPD”), and must be submitted through a digital platform to be made available by the Ministry of Labor and Employment every February and August, for the first and second six-month periods, respectively.

This tool is likely to be displayed as a tab to be filled with information, called “Equal Pay and Remuneration Criteria”, which is expected to be implemented in the employer’s area of Portal Emprega Brasil.

• Publication

The Ministry of Labor and Employment will collect the data provided by employers, as well as additional information, and will publish the Wage and Remuneration Criteria Transparency Report every March and September, on the platform of the Labor Statistics Dissemination Program (“PDET”). In addition, the report must be published on the companies’ websites, social networks, or similar platforms, as a means to ensure the wide circulation of the data to employees and the general public.

2. Action Plan to Mitigate Wage and Payment Criteria Inequalities for Women and Men: 

The new regulations also establish guidelines for the action plan to be drafted in the event of unequal pay and remuneration criteria for women and men.

This action plan must include:

· measures to be adopted and the corresponding priority scale;
· targets, deadlines, and mechanisms for measuring results;
· annual planning along with an implementation schedule; and
· evaluation of the measures every six months, at least;

• Creation of programs aimed at:

· training managers, leaders and employees on equity matters between women and men within the labor market;
· fostering diversity and inclusion in the workplace;
· fomenting training programs that advance women’s entry, permanence, and development within the labor market, on equal terms with men; and
· establishing a transparent structure of wage and remuneration criteria.

• Ensuring the participation of labor unions and employee representatives, preferably as provided for in a collective bargaining agreement.

The new regulation seems to place the Ministry of Labor and Employment as the leading figure in the publication of the transparency report, with employers themselves in charge of supplying information through the appropriate channels.

The ordinance comes into force on December 01, 2023, but the reports will not be required until the specific tab for collecting information on equal pay is duly implemented on Portal Emprega Brasil. In light of this, postponements are likely to occur.

Demarest’s Labor Team is available to provide clarifications on the topic and to assist in any necessary measures.