Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 1 hour ago
Pay transparency in Spain is entering a new phase. With the transposition deadline for Directive (EU) 2023/970, the EU Pay Transparency Directive, set at 7 June 2026, employers operating in Spain face obligations that go well beyond the existing Remuneration Register introduced by Royal Decree 902/2020. Compliance officers must now prepare for mandatory pre-employment salary disclosures, strengthened employee information rights, rigorous gender pay audits and phased public reporting by company size. This guide maps the legal landscape and provides the practical, step-by-step tools needed to reach labour compliance in 2026 and beyond.
The transposition deadline of 7 June 2026 is not a future planning exercise, it is an immediate implementation challenge. Even where the final Spanish transposition instrument refines certain procedural details, the Directive itself sets minimum standards that employers should already be working towards. Industry observers expect enforcement activity to intensify quickly once the deadline passes.
Compliance officers should prioritise the following six actions without delay:
Directive (EU) 2023/970 was adopted in May 2023 and published in the Official Journal of the European Union on 17 May 2023. Its stated objective is to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms. The Directive establishes EU-wide minimum standards covering pre-employment salary disclosures, employee rights to request pay information, periodic pay gap reporting, mandatory joint pay assessments where unjustified gaps are found, and a shift in the burden of proof to the employer in pay discrimination proceedings.
All EU Member States are required to transpose these standards into national law by 7 June 2026. Where national legislation already provides a higher level of protection, Member States retain those provisions alongside the new requirements.
Spain was among the early movers on pay transparency within the EU. Royal Decree 902/2020, which entered into force on 14 April 2021, established several foundational obligations. All companies, regardless of size, must maintain an annual Registro Retributivo (Remuneration Register) that records average values and median values of salary components, disaggregated by sex and professional classification. Companies with 50 or more employees must also produce an Auditoría Retributiva (Remuneration Audit) as part of their Equality Plan (Plan de Igualdad), and where the average remuneration for one sex exceeds the other by 25 per cent or more within a given professional classification, the employer must include a justification in the register.
These existing rules gave Spanish employers a head start. However, the EU Pay Transparency Directive introduces several obligations that go further.
The key shifts that compliance teams should anticipate from Spain’s transposition include the following changes. The gap threshold triggering mandatory corrective action is expected to drop significantly, industry observers note that the Directive references a 5 per cent threshold for joint pay assessments, well below the current 25 per cent justification rule under Royal Decree 902/2020. Pre-employment salary band disclosure will become mandatory in job advertisements or at the latest before the first interview. The right of employees to request written information about individual and average pay levels, broken down by sex, will be legally enforceable. The burden of proof in pay discrimination claims will shift to the employer once a prima facie case is established.
Public pay gap reporting obligations will be phased in by company size.
Understanding the phased implementation is critical for resource planning. The EU Pay Transparency Directive allows Member States to apply reporting obligations progressively based on employer size. Although Spain’s final transposition text may adjust certain dates, the Directive itself prescribes minimum phasing that compliance teams can plan around.
| Entity / Item | Current Spanish Position (RD 902/2020) | Expected Impact After Transposition (2026) |
|---|---|---|
| Small employers (<50 employees) | Must maintain a basic Remuneration Register; exempt from Equality Plan and Remuneration Audit obligations. | Likely exempt from initial reporting phases; however, employee information rights and pre-employment salary band obligations apply regardless of size. |
| Medium employers (50–249 employees) | Full Remuneration Register and Equality Plan (including Remuneration Audit) required; 25% gap justification rule. | Pay gap audits and reporting obligations phased in, 150+ employers expected in the first wave by June 2027, with 100+ employers following. Joint pay assessment obligation triggered at a 5% gap threshold. Employee information rights apply immediately. |
| Large employers (250+ employees) | Existing register, Equality Plan and audit obligations fully apply; justification for gaps of 25% or more. | Immediate and full compliance required upon transposition: annual or biannual reporting (depending on final national rules), public disclosure of pay gap data, applicant salary transparency, employee information rights, mandatory joint pay assessment where unexplained gap exceeds 5%. |
Compliance officers should note that even where Spain exercises discretion on phasing, the Directive mandates that all employers with 100 or more employees must be covered by reporting obligations no later than 7 June 2031. Early preparation is therefore not optional, it is a question of timing.
One of the most visible changes introduced by the EU Pay Transparency Directive concerns the recruitment process. Employers in Spain will be required to disclose the initial pay level or pay range for a position either in the job advertisement or, at the latest, before the first interview, without the candidate having to request it. This obligation applies irrespective of company size.
In addition, employers will be prohibited from asking candidates about their salary history at previous employers. The rationale is straightforward: anchoring new salaries to historical pay perpetuates existing gender pay gaps. Compliance officers should immediately review all recruitment documentation, job descriptions, offer letters, agency briefings and interview templates, to ensure these requirements are embedded before the transposition deadline.
Beyond recruitment, the Directive reinforces the need for structured, documented pay decision-making. Employers must ensure that criteria used for determining pay and career progression are objective, gender-neutral and accessible to employees. In practice, this means compliance teams should work with HR to create or update the following elements:
Any pay decision that deviates from the established framework should be recorded with a written justification. The likely practical effect of the transposition will be to make undocumented pay decisions a significant litigation risk.
Employers should also update employment contracts and internal communications. The Directive requires that employees be informed about the criteria used to determine their pay, their pay level, and the average pay levels, disaggregated by sex, for categories of workers performing the same work or work of equal value. A model notice clause might read:
“Your remuneration is determined in accordance with [Company]’s Remuneration Policy, using objective criteria including [job classification, seniority, qualifications, performance]. You have the right to request written information about your individual pay level and the average pay levels, broken down by sex, for employees performing the same work or work of equal value.”
| Obligation | Action Required | Owner |
|---|---|---|
| Salary band in job adverts | Update all job postings and agency briefing templates | HR / Recruitment |
| Ban on salary history questions | Revise interview scripts and recruiter training | HR / Legal |
| Employee pay information rights | Create template response for pay information requests | HR / Payroll |
| Documented pay criteria | Publish remuneration policy and job evaluation framework | HR / Compliance |
| Contractual transparency clause | Insert pay transparency notice in employment contracts | Legal / HR |
The gender pay audit is the centrepiece of the new pay transparency framework. For compliance officers, the goal is not merely to produce a report, it is to create a legally defensible audit trail that demonstrates good faith, identifies genuine gaps and documents corrective action. A well-executed audit also reduces the risk of adverse findings if the Labour Inspectorate (Inspección de Trabajo) conducts an investigation or if an employee brings a discrimination claim.
The first step is to extract comprehensive pay data from the HRIS and payroll systems. The data fields required for a robust gender pay audit typically include:
Compliance teams should work with IT and payroll to automate this extraction so that it can be repeated annually.
Raw payroll data must be cleaned to remove anomalies (employees on unpaid leave, new joiners with partial-year data, expatriate packages governed by different rules). The cleaned data is then grouped into cohorts, employees performing the same work or work of equal value, using the job evaluation framework described above. Cohorting is the most legally sensitive step: if cohorts are defined too broadly, genuine gaps may be masked; if defined too narrowly, statistical significance disappears.
For each cohort, calculate the mean and median pay gap between male and female employees. Under Royal Decree 902/2020, a gap of 25 per cent or more within a given professional classification required a justification entry in the Remuneration Register. The EU Pay Transparency Directive introduces a substantially lower threshold: where the gap in any category of workers exceeds 5 per cent and the employer cannot justify that difference by objective, gender-neutral factors, the employer must conduct a joint pay assessment in cooperation with workers’ representatives and take corrective measures.
More advanced analyses may include regression modelling to isolate the effect of legitimate explanatory variables (seniority, qualifications, performance) from unexplained residual gaps. While regression is not explicitly mandated, early indications suggest that it is becoming best practice and can strengthen the employer’s defence in litigation.
Where unexplained gaps are identified, the employer must design a remediation plan. This should include specific, measurable actions (e.g., targeted salary adjustments, revised grading, training for decision-makers) together with a timeline and budget. Under Spanish labour law, the remediation plan for companies with 50 or more employees should be discussed with workers’ representatives or union delegates as part of the Equality Plan negotiation process. Documenting the consultation, including signed minutes and any objections raised, is essential for demonstrating good faith.
The completed audit, including raw data extracts (securely stored), methodology notes, cohort definitions, statistical outputs and the remediation plan, should be stored in a central compliance repository. Retain all documentation for a minimum period aligned with the statute of limitations for pay discrimination claims in Spain, which is generally one year for administrative claims but may be longer for judicial proceedings.
Pay transparency does not exist in a vacuum. Compliance officers must embed the new obligations into the broader compliance architecture, including data protection, employee relations and internal audit functions.
Equality Plan integration. For companies with 50 or more employees, the gender pay audit results must feed directly into the Equality Plan (Plan de Igualdad). If an existing Equality Plan is in force, it may need to be renegotiated to incorporate the new pay transparency measures and the lower remediation thresholds.
Data protection considerations. Processing pay data disaggregated by sex involves the handling of personal data under the GDPR and Spain’s Organic Law 3/2018 (LOPDGDD). The Data Protection Officer should be involved from the outset to ensure that: the legal basis for processing is clearly identified (typically compliance with a legal obligation under Article 6(1)(c) GDPR); data minimisation principles are followed; access to disaggregated data is restricted; and anonymised or aggregated outputs are used for public reporting wherever possible.
Training. Hiring managers, HR business partners and payroll administrators need training on the new rules, particularly the prohibition on salary history questions, the process for responding to employee information requests, and the documentation standards for pay decisions.
The enforcement framework for pay transparency in Spain operates on multiple levels. The Labour and Social Security Inspectorate (Inspección de Trabajo y Seguridad Social) has the power to investigate compliance with remuneration obligations, issue corrective orders and impose administrative fines. Under the existing framework for labour infractions (Royal Legislative Decree 5/2000, LISOS), breaches of equality and non-discrimination obligations can attract fines ranging from approximately €7,501 to €225,018 for very serious infractions, depending on severity and aggravating factors.
Beyond administrative penalties, the Directive’s shift in the burden of proof represents a significant litigation risk. In a pay discrimination claim, once the employee establishes a prima facie case, for example, by showing a gender pay gap within a comparator group, the employer must prove that the difference is justified by objective, gender-neutral factors. Employers who cannot produce a documented pay audit, objective evaluation criteria and evidence of remedial action will find this burden extremely difficult to discharge.
To mitigate enforcement and litigation risk, compliance teams should maintain a detailed audit trail that includes:
The following checklist summarises the key actions for compliance officers. Each task is mapped to an internal owner to ensure clear accountability.
Pay transparency in Spain is no longer a future obligation, it is a present one. The transposition of the EU Pay Transparency Directive by 7 June 2026 marks a structural shift in how employers must manage, justify and report their pay practices. Compliance officers who act now will avoid the dual risk of administrative penalties and adverse litigation outcomes.
The five most critical next steps are: confirm your organisation’s scope and timeline obligations; run an immediate pay gap snapshot; update recruitment documentation and employee contracts; launch a comprehensive gender pay audit programme; and embed the results into your Equality Plan and broader compliance framework.
Employers who treat this as a one-off compliance exercise rather than a permanent operational change are likely to face ongoing regulatory and reputational exposure. The organisations that invest in robust, defensible pay structures now will be better positioned not only for legal compliance but also for talent attraction and retention in an increasingly transparent labour market.
This article was produced by Global Law Experts. For specialist advice on this topic, contact Jordi Sot Ball-Llosera at Toda & Nel-lo, a member of the Global Law Experts network.
Find the right Legal Expert for your business
Sign up for the latest advisor briefings and news within Global Advisory Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.
Naturally you can unsubscribe at any time.
Global Advisory Experts is dedicated to providing exceptional advisory services to clients around the world. With a vast network of highly skilled and experienced advisors, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.
