Equal pay: find out what has changed with the new act

Law provides for measures to ensure equal pay for men and women and impose harsher penalties on companies that do not engage in pay transparency

By Marcelo Lima

On July 4, 2023, Law No 14,611 was published in Brazil. The act amends the Consolidation of Labor Laws – CLT, to introduce provisions to close the gender wage gap and curb pay discrimination.

The right to equal pay is already provided for under the Brazilian Constitution, but the new law puts several measures in place to ensure wage transparency, which companies must comply with.

Employers should be mindful of the new act, as its provisions are already in force and they impose harsher fines and penalties for noncompliance.

Check out the most significant changes below:

New measures to ensure pay equality

Companies must put the following measures in place to ensure equal pay and compensation criteria for men and women

• Improvement in inspection policies and establishment of proper procedures to ensure wage transparency and adoption of objective pay criteria;
• Creation of dedicated channels for reporting unequal pay;
• Implementation of programs focused on diversity and inclusion for training employees and lead management personnel on gender equity in the labor market, with evaluation of results; and
• Training and qualification of women so that they can enter, remain and develop in the job market on equal terms with men.

Harsher penalties for pay discrimination

The fine for noncompliance, which used to amount to the state minimum wage, is now 10 times the new salary owed to the injured worker, which may be doubled should the offense be repeated.

The act also states that the payment of the salary differences due does not rule out the employee's right to file a personal injury claim.

Transparency reports

One of the most significant changes brought by the law is that companies with 100 employees or more are now required to publish reports on wage transparency and pay criteria every 6 months.

These reports must comply with the provisions of the General Data Protection Act (LGPD) and must contain:

• anonymized data and information that allow the objective comparison of salaries and the proportion of women and men in key management and leadership positions;
• information that help produce statistical data on other possible gaps arising from race, ethnicity, nationality and age;

Should any wage gap be found, the company must set an action plan as a countermeasure, establishing goals and schedules, with the involvement of union and employee representatives in the workplace.

Legal entities that fail to publish their transparency reports will be subject to an administrative fine of up to 3% of the employer's payroll, limited to 100 minimum wages, without prejudice to other applicable penalties and liabilities.

Best practices for labor management

DPC’s specialists are always up to date with the latest legislative changes, assisting clients in remaining compliant with the inspection authorities, putting the best practices in place to reduce labor risks. You can count on our support: dpc@dpc.com.br.