Extent of Protection
The Federal Constitution prohibits salary differences based on sex, age, colour or marital status. As mentioned above, such prohibition also applies to employees with disabilities. In addition, the Labour Code ensures that employees performing the same activity, with equal value, to the same employer, at the same facility, are entitled to the same remuneration, except if the difference in their length of service: (a) with the same employer is longer than 4 years and (b) at such position is longer than 2 years. In accordance with law, “equal value work” is the work performed with the same productivity and same technical perfection.
Remedies
If a company does not comply with the equal pay rules mentioned above, the company may be subject to (a) inspection from the Ministry of Economy, which may subject the company to the payment of administrative penalties, (b) investigation by the Ministry of Labour Prosecution and/or (c) individual labour claims filed by employees or former employees, claiming payment of salary differences and indemnification for moral damages due to the discriminatory treatment.
Enforcement/Litigation
Equal pay for equal work is a common request in labour claims in Brazil.
Other Requirements
On July 3rd, 2023, law 14.611/2023 was published, including the obligation for private companies with 100 or more employees to publish a biannual transparency report (on March and September of every year) on wage and remuneration criteria that also observes the limits of the General Data Protection Law (LGPD). Failure to publish the transparency report may lead to an administrative fine of up to 3% of the company’s payroll, capped at 100 Brazilian minimum monthly wages.
Additionally, it has established more severe legal and monetary consequences in the event of wage discrimination. Thus, in the event of wage discrimination, companies are subject to the following sanctions and fines:
- payment of salary differences to the employees discriminated against;
- employees may seek compensation for moral damage; and
- administrative fines of ten times the new salary owed to the employee that was subject to discrimination – the amount doubles for repeat offences.
The transparency report is prepared and provided to the companies by the Ministry of Labor based on the information in the e-Social system (Digital Bookkeeping System for Tax, Social Security and Labour Obligations), that comprehends a Federal Government platform that centralises the submission of labour, social security and tax information by employers and complementary information provided by the companies.
Companies must access the report prepared by the Ministry of Labor and publish it on their website and social media channels. The methodology adopted by the Ministry of Labor to prepare the transparency report has been questioned by both companies and unions, however, companies cannot change the information provided in the report before publishing it. Nevertheless, companies may publish the report along with comments about the companies’ policies and their interpretation about it.
In case the Ministry of Labor finds that there are unequal salaries and remuneration criteria between women and men (after the analysis of the transparency report and inspection of the company), companies with 100 or more employees must draft and implement, within 90 days, an Action Plan to Mitigate Unequal Salaries and Remuneration Criteria between Women and Men, in specific conditions.
