Decree 11,795/23, published on November 24th, regulates Law 14,611/23, or the Law on Equal Pay for Women and Men.
The main innovation introduced is the stipulation of the months of March and September each year for the biannual publication of the Salary Transparency Report. This gives companies an extension to the deadline, initially set for January 2024.
Furthermore, Decree 11,795/23 did not bring in any significant changes in relation to what was already expected from the regulation and what we are applying to the reports of clients who are preparing to comply with the legal obligation.
Content of the report
According to the decree, the report must include, at the very least, information on the position or occupation contained in the Brazilian Classification of Occupations (CBO), with the respective duties and the amount of the worker's compensation.
As we anticipated, the comparison of compensation must include both the fixed and variable amounts paid to the worker:
- contractual salary;
- thirteenth salary;
- bonuses;
- commissions;
- overtime;
- night, hazard, hardship, and dangerous work premiums, among others;
- one-third for vacations;
- prior notice period worked;
- paid weekly rest;
- tips; and
- other payments that, by law or collective bargaining agreement, make up the compensation.
With regard to variable compensation, the challenge is to detail all the amounts separately and to point out that, although the criteria for payment are the same for women and men, the possible differences in salary are the result of different performance.
It will be necessary to have robust mechanisms to back up companies if questions arise that the differences in pay between men and women in the company are due to gender discrimination and not performance.
In addition, although the decree provides for the presentation of the amounts relating to compensation, it reinforced that the report must contain anonymized data and in compliance with the General Data Protection Law (LGPD), guaranteeing companies the possibility of not disclosing the absolute amounts paid to workers.
Publication of the report
The decree established that the Salary Transparency Report should be published in March and September, using two simultaneous approaches:
- Submission through a computerized tool provided by the Ministry of Labor and Employment (still pending creation and dissemination); and
- Publication on the companies' own websites, social networks, or similar tools, guaranteeing wide dissemination to employees, contingent workers, and the general public.
With the dates and places of publication of the Salary Transparency Report now defined, we understand that companies that were notified by the Labor Prosecutor's Office (MPT) to present the document in January of 2024 can rely on the regulation to present it only in March of 2024.
In any case, for companies that have already completed the report or that, due to administrative proceedings initiated by the MPT, find it advantageous to submit it early, we recommend that they do not wait for the deadline set in the decree.
Action plan
If the Ministry of Labor and Employment identifies unequal pay or compensation criteria between women and men, the company must draw up and implement an "Action Plan to Mitigate Unequal Pay and Remuneration Criteria between Women and Men" within 90 days of notice from the ministry.
The plan should establish the measures to be adopted, targets, and deadlines, as well as detail the creation of programs related to:
- training for managers, leaders, and employees on the subject of equality between women and men in the labor market;
- promoting diversity and inclusion in the workplace; and
- training of women to enter, remain in, and rise in the labor market on equal terms with men.
In drawing up and implementing the action plan, the participation of labor unions and employee representatives must be guaranteed. This should preferably be done in the manner defined in a collective bargaining agreement or, in the absence of such an agreement, by means of an employee committee established under the terms of the Consolidated Labor Laws (CLT).[1]
For companies with between 100 and 200 employees, a specific election procedure can be set up to establish a committee. The aim is to ensure effective participation of employees in drawing up and implementing the action plan.
Companies should therefore pay attention to this procedure and, if possible, negotiate through a collective bargaining agreement, how the participation of union representatives will be guaranteed.
Whistleblowing channel
The Ministry of Labor and Employment will provide a specific channel for receiving complaints involving discrimination in pay and compensation criteria between women and men.
Oversight
The decree gives the Ministry of Labor and Employment the power to:
- oversee the submission of Salary Transparency and Compensation Criteria Reports by companies; and
- analyze the information contained in the Salary Transparency and Compensation Criteria Reports.
It will also be incumbent on the Ministry of Labor and Employment, through the Labor Auditor’s Office, to notify companies in the event of a finding of unequal pay and compensation criteria between women and men, so that they can draw up an action plan within 90 days.
As expected since the publication of the Gender Pay Equity Law, the main impact of the change for companies is directly related to the effects that the information contained in the Salary Transparency Report will have on their institutional image.
Publicizing information, even if data anonymization is guaranteed, exposes possible discriminatory gender practices to the public. In today's context, this can affect companies' reputations, even resulting in financial damage due to the reactions of consumers, employees, and other stakeholders.
[1] Article 510-A. Companies with more than two hundred employees are guaranteed the election of a committee to represent them, with the aim of promoting a direct understanding with employers.
Paragraph 1. The committee shall be composed:
I - of three members at companies with more than two hundred and up to three thousand employees;
II - of five members at companies with more than three thousand and up to five thousand employees;
III - of seven members at companies with more than five thousand employees.
Paragraph 2. In the event that the company has employees in several states of the Federation and in the Federal District, the election of a committee of employee representatives per state or in the Federal District shall be ensured, in the same manner as established in paragraph 1 of this article.
