Pay transparency: New Draft Regulation

Pay transparency: New Draft Regulation

Spain is making progress in transposing the European Directive on pay transparency

On 3 August 2026, the Draft Royal Decree amending Royal Decree 902/2020 of 13 October on equal pay for women and men was published, with the aim of advancing the transposition of Directive (EU) 2023/970 on pay transparency.

As this is still a draft regulation, its content may be subject to change before final approval. However, the text sets out significant changes regarding pay transparency, employees’ right to information, pay records, pay audits, and information on the gender pay gap.

Key changes for businesses

1. Greater transparency regarding pay-setting criteria

Companies must inform their workforce, in a comprehensive and easily accessible manner, of the objective and gender-neutral criteria used to determine pay and pay levels.

In companies with 50 or more employees, this obligation will also extend to the criteria for pay progression, where such progression is provided for. The information must be updated whenever these criteria are amended.

2. New and strengthened individual right to information on pay

Employees may request, in writing, information regarding:

– their individual pay; and

– the average annual and hourly pay, broken down by gender, of those performing the same work or work of equal value.

This request can be made once a year or whenever changes occur. In addition, companies must inform the entire workforce, at least once a year, of the existence of this right and how to exercise it.

The company must respond in writing within a maximum of two months.

3. Greater detail in the pay register

All companies will continue to be required to maintain a pay register covering the entire workforce, including management and senior staff.

The draft bill strengthens the content of this register by requiring it to include the arithmetic mean and the median of the remuneration actually received on an annual and hourly basis, broken down by gender, group, category, pay grade, position, and other applicable classification systems, whilst also distinguishing between each remuneration component.

4. More stringent pay audits

The pay audit must analyse, at a minimum, information from the previous three years and identify the causes of any pay differences, based on objective and gender-neutral criteria.

Factors such as work-life balance measures, promotion opportunities, mobility, and availability requirements that may influence pay differences must also be analysed.

Where unjustified inequalities are detected, an action plan must be drawn up setting out specific measures, the parties responsible and a timetable. The draft legislation stipulates that such differences must be rectified within a reasonable timeframe of no more than six months.

5. New obligation to report on the gender pay gap

Companies with 50 or more employees falling within the scope of the draft legislation must provide specific information on the gender pay gap. This includes the following data:

the average and median pay gaps; differences in pay supplements; the proportion of women and men receiving supplements; distribution by pay quartile; and the pay gap by categories, groups or posts of equal value.

The reporting frequency will be as follows:

– Companies with 250 or more employees: annually.

– Companies with between 50 and 249 employees: every three years.

The first reporting obligation is due by 7 June 2027 at the latest for companies with 150 or more employees, and by 7 June 2031 for companies with between 50 and 149 employees.

At Bové Montero’s Labour Law Department, we provide comprehensive advice on labour and remuneration compliance, helping companies to anticipate and adapt to new legal obligations.

Our team can assist organisations, amongst other areas, with reviewing remuneration structures and policies, salary records, remuneration audits, job evaluations, equality plans, internal protocols and other labour compliance obligations. We can also help identify potential areas of risk and propose corrective measures.

In light of the anticipated changes regarding pay transparency, we recommend carrying out a proactive review of the current remuneration model and internal reporting and documentation procedures to ensure compliance with future regulatory requirements.