Brazil: Brazilian Gender Pay Gap Law – News about the Transparency Report and upcoming important dates

Law 14.611/2023, known as the gender pay gap law (gender equality law), has created, among other obligations, the need for companies with 100 or more employees to publish a semi-annual transparency report on wage and remuneration criteria, which will show not only the differences between the remuneration of male and female employees but also the ratio of male and female employees at the companies.

The regulation of the law (Decree 11,795/2023 and Ordinance 3,714/2023) that were published last November 2023 clarified that the MTE is the one that will draft the transparency report, and not the companies, based on the data already provided by the companies in the e-Social system (which is a mandatory government system used by the companies to report their tax, labour and social security obligations) and on the information that will be provided by the companies in the form disclosed on the MTE’s specific website called in Portuguese “Portal Emprega Brasil.” Companies have until 29 February 2024 to fulfill the form on Portal Emprega Brasil, which requests information about companies’ remuneration policies and incentives to hire and maintain women at the workplace.

The first transparency report will be published by MTE on 15 March 2024. Once the MTE publishes the transparency report, companies must disclose the transparency report on their main communication channels (websites, social networks, and similar) until 30 March 2024, even if they do not agree with the information contained in such a report. This obligation may greatly impact the companies’ reputation and image because the conditions that will be used by the MTE in the preparation of the report will not take into account the requirements provided by law (section 461 of the Brazilian labour code) regarding equal pay for equal work.

If the MTE’s transparency report reveals a gender wage gap, the companies may be notified by the MTE to provide clarifications. If the MTE understands that the clarifications do not justify the pay gap, the companies will be required to present within 90 days an Action Plan to Mitigate Unequal Salaries and Remuneration Criteria between Women and Men, with the participation of union and employee representatives.

Key Action Points for Human Resources and In-House Counsel

• Companies should revisit the information provided in the e-Social system as well as their job position classification and remuneration criteria.
• Companies should think carefully about the information that will be provided in the Portal Emprega Brasil since it can be used by the company or by the authorities in the event of future questionings.
• Companies may prepare a “shadow” transparency report using the conditions that will be used by the MTE on its report to be prepared for the information that will be published on 15 March, and verify if any measure should be taken as damage control.
• Companies may prepare their own transparency report based on their own criteria and the rules regarding equal pay for equal work in Brazil (section 461 of the Brazilian labour code) to be able to confront the report that will be prepared by the MTE or to defend themselves in the event of questionings of the labour authorities.

TozziniFreire is available to assist the companies with any clarification about the law and measures that must be taken to comply with it and to better protect the company.