July 24, 2021

Portugal seeks equal pay with law that requires only 5% of companies

Portugal seeks equal pay with law that requires only 5% of companies



The Portuguese Parliament has approved a law with which it hopes to tackle the wage inequality between men and women, but in practice will only ask for accounts to around 5% of the total of companies in the country.

The Law of Remunerative Equality, presented at the proposal of the Government led by the socialist António Costa, will enter into force in January with the objective of "promoting an effective fight against wage inequalities between men and women," the executive announced.

It is a necessary goal in Portugal, where women earn on average 15.8% less than men; to receive the same, a woman would have to work 58 days more per year, according to official data.

With the idea of ​​reducing these "very significant asymmetries", in the words of the Executive, the portfolios of Work and Citizenship and Equality worked on a law that provides, among other things, to have annual statistical information on these wage differences by companies .

In addition, companies are required to "ensure a transparent remuneration policy" and apply a plan to exclude any possibility of wage discrimination, being subject to sanctions such as the deprivation of the right to participate in public competitions if they do not comply with this request.

The rule, which includes other innovative measures, loses strength because, if disparities are discovered, explanations can only be required for less than 5% of Portuguese companies.

As reflected in the transitional provisions, during the first two years of the law, official entities that have verified that there is a wage gap can only address entities that employ "250 or more workers" to submit "a plan of evaluation of the salary differences "leading to its eradication.

From the third year they may also apply to companies with "50 or more workers", leaving out small companies and micro-enterprises with fewer than 50 workers, which are the overwhelming majority in Portugal.

According to the most recent data of the National Institute of Statistics luso, in the country there are a total of 1,196,102 registered companies, of which 1,195,064 are small and medium (SMEs) and only 1,038 are considered large; that is, 99.9% are SMEs.

Of the total of SMEs, 96.2% correspond to micro enterprises (less than ten workers), 3.2% are small (less than fifty workers) and 0.5% are medium (less than 250 workers).

Asked by Efe about the real application that this law will have, the Ministry of Labor of Portugal remitted the communiqué in which the approval of the norm was celebrated, avoiding answering the concrete questions.

Meanwhile, the Secretary of State for Citizenship and Equality, Rosa Monteiro, defended in a statement to Efe that the law "is not focused only on identifying wage disparities and having sanctioning measures, it is more complex than that".

"The law guarantees a new right to workers, which is to request an opinion (from an official entity) in case they feel discriminated against," argued Monteiro, who admitted however that in some cases it is limited.

"When significant levels of wage inequality are identified and the company is notified so that it justifies it, it applies only to a group of companies, which was negotiated in the Parliament," he said.

The rule has not satisfied the General Confederation of Workers of Portugal (CGTP), the largest union in the country, which believes that "it has a very generic nature" and "is restricted to just a few companies, which greatly reduces its field of application "

"In practice, this law seems to have as main concern not to affect too many companies and above all not to stigmatize them with the violation of the law," the coordinator of the Equality Commission of the CGTP, Fatima Messias, told Efe.

Messias points out that it is a rule that simply "looks good" and adds that, although "it may have good intentions", it runs the risk of "becoming, in reality, impracticable", because in order to tackle the problem, a greater involvement of the inspecting entities.

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