Spotlight Q&A With Aline Fidelis - The New Equal Pay Law

• Published date: 27 March 2024
• Subject Matter: Employment and HR, Discrimination, Disability & Sexual Harassment, Employee Benefits & Compensation
• Law Firm: Tauil & Chequer
• Author: Ms Aline Fidelis

AT A GLANCE

• The new Brazilian equal pay law introduces new obligations on employers with 100 or more employees. Failure to comply will lead to fines.
• Employers must submit employment information to the Brazilian Ministry of Labor by certain deadlines, and publish the Ministry of Labor's "Transparency Report" on their websites or social media.
• If notified of salary discrepancies, employers must prepare an action plan to mitigate workplace inequality within 90 days of notification.

CAN YOU PROVIDE SOME BACKGROUND TO THE NEW EQUAL PAY LAW?

The Law No. 14,611, also known as the Brazilian equal pay law, came into force on July 4, 2023. It is regulated by Decree No. 11,795, of 2023, and by the Brazilian Ministry of Labor's Ordinance No. 3,714.

The new provisions aim to reduce workplace inequalities based on gender and other characteristics such as race, ethnicity, nationality, and age, as well as to guarantee equal pay. The law establishes new obligations that employers in Brazil must comply with concerning the adoption of mechanisms for transparency and, if necessary, actions to mitigate salary differences.

WHAT ARE THE KEY PROVISIONS OF THE NEW LAW?

The new equal pay law established a new directive for equal pay, primarily with respect to the identification of salary differences between men and women, but it also considers other characteristics, e.g., race, ethnicity, nationality, age, etc. Under the new regulation, the Brazilian Ministry of Labor will prepare and disclose a Salary and Remuneration Criteria Transparency Report ("Transparency Report") in March and September of each year, covering employers with 100 or more employees. The Transparency Report will contain statistical information regarding internal salary differences, which employers are required to make publicly available on their website or social media.

The Transparency Report will be based on (i) the public employment information required by law to be posted on eSocial, the Brazilian government's platform for information regarding employment, tax and social security; and (ii) additional information regarding internal remuneration practices and policies previously provided by the employer to the Ministry of Labor in February1 and August.

If any salary discrepancies are identified, based on the Transparency Report, the employer may be notified by the Ministry of Labor to take action, which involves preparing an action plan to mitigate workplace inequality within 90 days from the date of...