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We dedicate the first post on labor compliance to the wage gap and how it is being addressed from different positions. Equality between men and women and non-discrimination have gained prominence in the social debate in recent times, thanks to different social and political movements, and the socio-economic reality. One of the most tangible manifestations of gender bias is seen in the “wage gap,” which, in Spain, is estimated to be around 16% in relation to gross hourly wages.

The concentration of part-time contracts in women, and work breaks to take care of children or family members, are two of the plausible causes of these differences. Also, jobs in sectors of activity traditionally occupied mainly by men have higher additional wage payments than those occupied by women. Therefore, the current regulations on equality as a regulatory framework to curb these situations are proving insufficient, protected by a society that is progressing in this area, but that is dragging along a model rooted in our culture.

Elements such as the greater awareness, the social clamor, the verification of inequalities, and the insufficiency of regulation, are resulting in (i) the intensification of the labor inspectorate’s actions to verify and impose the actual compliance with the current regulations, and (ii) the promotion of legislative initiatives aimed at detecting and tackling the existing inequalities between men and women.

Thus, the proposals presented by the parliamentary groups of Podemos (We can) and the PSOE (Spanish Socialist Workers’ Party) contemplate measures to promote wage transparency, obliging companies to report on their average wage, broken down by sex. These proposals also include assumptions that allow presuming that there is a wage gap in the company and contemplate reforms in the Labor Infringements and Penalties Act to include specific penalties for all breaches relating to equality.

The Labor and Social Security Inspectorate has set, within its National Strategic Plan 2018-2020, the aim of ensuring compliance with the standards on matters of equality and non-discrimination, acting in the area of gender discrimination, with special emphasis on equality plans in companies, and monitoring of the wage gap and collective bargaining to avoid discriminatory clauses.

But is Spain the only country that is taking measures to curb this typical manifestation of inequality? Not at all. In 2017, the United Kingdom enacted an act under which companies with more than 250 workers must publish statistics on gender wage differences on an annual basis.

In Iceland, in four years, any public body or private company that employs more than 25 workers must obtain a certification stating that they pay equal wages for equal work.

In the United States, in addition to the laws that are enacted in each of the states, the national legislative proposals are aimed at increasing the possible compensation should the existence of wage discrimination be determined, which has been prohibited by the legal system since 1963.

We must add that, in the legal realm, the High Court of Justice of Andalusia issued a groundbreaking ruling on this matter on February 14, sentencing a company to compensate a female worker that received a lower wage than her male colleagues, after declaring that there was discrimination when—with an equal position and equal responsibility—the woman received a lower wage because of discretionally allocated incentives, for which awareness-raising against the wage gap has also been embraced by the courts.

Also, we must not forget the impact that the integration or non-integration of these policies into the business framework can have on the reputation of companies towards investors, proxy advisors, customers, providers and especially potential employees.

This new social, business, legislative and legal reality determines that it is of great interest for companies to work on gender-linked wage inequalities, and they must diagnose their reality and review their internal equality policies, while articulating ways to ensure non-discrimination based on gender. This will facilitate the recruitment and retention of female talent.

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Asociada

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Asociada sénior de Gestión del Conocimiento del Área Laboral de Cuatrecasas. Miembro del Instituto Internacional Cuatrecasas de Estrategia Legal en Recursos Humanos.

ana.campos@cuatrecasas.com