The long-awaited regulation of the salary transparency report and compensation criteria, published on November 27 by the Ministry of Labor and Employment (MTE) through MTE Ordinance 3,714/23, brought in as main innovations:

  • the definition that the MTE will be responsible for drawing up the salary transparency report, based on information from eSocial and complementary information to be provided by companies; and
  • companies must publicize the salary transparency report drawn up by the MTE, posting the document on their websites, social networks, or similar tools, always in a visible place, and ensuring that it is widely disseminated to their employees, workers, and the general public.

Although the regulation describes the data that will be used by the MTE, it does not establish what methodology will be used to prepare the salary transparency report or what information will actually be included by the ministry in the report.

This scenario of uncertainty exposes companies to irreparable damage related to competition, disclosure of personal data, and an indication of non-existent salary differences that can affect their image and institutional reputation.

So we've prepared a guide with questions and answers and a step-by-step guide to help companies' legal and HR departments deal with these challenges.

Question and answer guide

  1. What will be the basis for comparison? Can the Ministry of Labor and Employment use the name of the position or the Brazilian Classification of Occupations (CBO) to compare salaries?

According to the regulation, the MTE will extract data from the positions or CBOs already declared in eSocial, in order to ascertain pay equity and compensation criteria and issue the pay transparency report.

  1. Is the job title or the CBO enough to compare salaries between men and women?

No. Per Law 14,611/23, equal pay for women and men is governed by the requirements of article 461 of the Consolidated Labor Laws, which includes, among other things, identical duties, productivity, and technical perfection.

Simply naming the position, therefore, is not enough. The Labor Courts have had this understanding settled for decades. An assistant at a company, for example, can carry out administrative, financial, legal, or operational activities. None of the positions, despite the "assistant" nomenclature, has an identical function or performs work of the same value. The position alone does not allow for a proper comparison.

The same reasoning applies to cases where the CBO is used. Sometimes the description in the CBO that most closely matches the activities carried out is applied, but this can cover different activities carried out by different positions - which in no way reflect an identical function or a job with the same value. It should also be mentioned that MTE Ordinance 397/02 determined that the CBO should be adopted for specific purposes. There is no legal provision for using the CBO for salary matching purposes.

  1. What happens if you only use the name of the job or the CBO for the salary transparency report?

Salary differences will probably be identified on the basis of employees who are not actually comparable. These distortions could be interpreted by the authorities (and the general public) as gender discrimination.

  1. If salary differences are identified based on job title or CBO, can the company be notified to implement an action plan?

Yes. This is why companies must:

  • review all the data sent through eSocial and which will be used as a source of information in the preparation of the salary transparency report, to minimize the possibility of data distortion and inconsistencies; and
  • review in detail the salary transparency report issued by the Ministry of Labor and Employment and prepare to challenge, including in court, inconsistent results arising from the methodology used.
  1. Should companies publicize the salary transparency report if this document points to differences in salary as a result of the methodology used by the Ministry of Labor and Employment?

Although the regulations state that they do, we believe that companies can take legal action to guarantee their right not to publish a salary transparency report that does not reflect the reality of the information and, consequently, could affect the company's reputation and institutional image.

For this reason, companies should analyze in detail the reports drawn up by the Ministry of Labor and Employment and make sure that there are no inconsistencies resulting from the use of the wrong methodology.

  1. Will the salary transparency report disclose employee compensation?

The legislation establishes that data must be anonymized and that the General Personal Data Protection Law (LGPD) must be observed. However, as there is no express provision on how the information will be disclosed in the document to be issued by the MTE, we cannot rule out the possibility of the report disclosing employee compensation.

Considering that, in many cases, it is possible to identify the salary of a particular professional even if their name is not disclosed, drawing up a salary transparency report containing absolute salary and compensation figures could be interpreted as an affront to the LGPD. In addition, the disclosure of confidential company information could also damage competition.

If the salary transparency report is issued with absolute salary figures and monthly compensation, it would be possible to take legal action to secure the right not to publish the salary transparency report.

Step by step guide for legal and HR departments:

The adoption of the measures listed below by the legal and HR departments will enable companies to legally challenge any inconsistencies in the salary transparency report prepared by the Ministry of Labor and Employment:

  1. Analyze the data entered in eSocial about positions and the CBO and identify whether there is a need for adjustments that can minimize the risk of inconsistent salary differences that do not reflect reality.
  2. Analyze salary and compensation figures by position and CBO, anticipating any salary differences that may be pointed out by the Ministry of Labor and Employment.
  3. Look for legal justifications for the salary differences that the Ministry of Labor and Employment may point out, analyzing whether, from a legal point of view, the justifications are robust enough to explain the differentiated payment.
  4. Analyze whether there is a legal need to formalize variable compensation payments through policies or programs and strengthen the justifications directly related to individual performance.
  5. Analyze, from a legal point of view, the individual performance evaluation system, to ensure that the evaluation forms are consistent and strengthen the justifications directly related to individual performance.
  6. After the Ministry of Labor and Employment sends the salary transparency report, analyze the salary differences pointed out to see if the discrepancies are - or are not - in line with the legal parameters.
  7. Evaluate appropriate legal measures that guarantee the company the possibility of not publishing the salary transparency report until the errors and inconsistencies have been remedied, in addition to not being obliged to implement an action plan, under penalty of suffering irreparable damage to its image and reputation.