Out of the Spanish financial crisis comes Fair Pay
Siesta - who needs a siesta? When it comes to Fair Pay, Spain is definitely not sleeping on the job! As recently as 2007, the country’s unadjusted gender pay gap was 18 percent, however within 12 years that figure fell to just under 12 percent in 2019. But how on earth did the Kingdom of Spain, which includes the peninsular plus the Balearic Islands in the Mediterranean and the Canary Islands in the Atlantic, manage to achieve this in the midst of a financial crisis and growing unemployment?
How do you tackle an economic crisis? In Spain, the solution is Fair Pay. While equality lost significant ground in many countries during the Coronavirus pandemic, the Spanish government decided to reinforce equal pay laws in late 2020. Spanish companies that do not pay women and men the same for equal work of equal value now face fines of up to six-digits. "For the country to recover from this emergency situation, we as women must receive equal pay for equal work," said Equality Minister Irene Monteri, explaining the move.
No half measures
The message of the new law is clear, especially since Spain's government is actually implementing what our experts unanimously called for at the International Pay Transparency Conference in summer of 2021: sanctions, sanctions, sanctions. Such a clear understanding that Fair Pay is an instrument to stimulate the economy is unprecedented worldwide.
And there will be no half measures, as this overhaul of equal pay laws brings together three extremely effective levers. Firstly, there is a legal requirement for companies to provide equal pay for equal and equivalent work. Secondly, there is an obligation to regularly review pay structures to ensure the pay system is permanently neutral and free from stereotypes, and thirdly, financial penalties will follow should the requirements not be met.
Ambitious parental leave laws
In addition, another law was passed under Monteri that aims to end discrimination against women in the workplace and increase equality in the private sector. Since January 2021, new fathers in Spain have been entitled to the same parental leave as mothers, a total of 16 (paid) weeks. Women are entitled to the same number of weeks, and this entitlement is not transferable to the other parent. Since the law came into force, taking no parental leave at all is no longer an option for Spanish fathers - the first six weeks after birth are now also mandatory for fathers in Spain - with full pay for both parents. The rest of the parental leave can be taken all at once or a week at a time until the end of the child's first year.
This is incredibly ambitious, especially as far as the active role of fathers is concerned. By comparison, fewer than four in ten fathers in Germany take parental leave and those who do stay at home for an average of 3.7 months. Mothers, on the other hand, stay at home for an average of 14.5 months. In other words, the majority of fathers in Germany don’t take parental leave at all, or take it for less than two months, so inheritance and care work is hardly ever shared equally.
A boost for equality
In Spain, things are likely to be much more equal in the future. But the regulation has also come under attack, as many consider maternity leave to be far too short. There is an urgent call for the current leave allowance to be extended beyond the fourth month of the child's life.
Nevertheless, these new equal pay and parental leave laws should give equality in Spain a further boost. Although the new regulations weren’t passed until 2020, Spain had already done extremely well in the Global Gender Gap Report 2020: the country jumped an impressive 21 places to eighth place, an immense improvement over 29th place in 2018. This is due to the large numbers of women in the Spanish government and parliament, meaning Spain also clearly lands in the global top ten in terms of political parity. However, there is still room for improvement, for example in the proportion of women in management positions in business and also in pay equality.
And this is precisely where the new laws are intended to make an impact at last. The first equal pay laws were put in place in 2007. In 2019, a decree was issued declaring it was illegal to pay different rates for women and men for equal work of equal value. Since then, Spanish companies with more than 50 employees have been required to keep a register listing average salaries by gender, function, position, and equivalent positions. In addition, the equivalence of positions in each company must be verified. If the requirements are not met, sanctions may be imposed.
In 2020, regulations were tightened once again. Since then, companies have also had to submit “equality plans”, including an analysis of their current status, and specifying concrete measures to implement equality and Fair Pay. To ensure implementation, each company must have an internal committee to monitor compliance with the measures described. The results of a salary audit also form part of the equality plan. Companies are required to review their compensation structures and ensure transparency. If any inequalities come to light in the process, companies must correct them.
Speaking of inequalities, after 16 months of tough negotiations, the decision to provide Fair Pay for women in soccer was also made in 2020. In the future, Spanish national soccer players in the Primera División will also be entitled to one year’s maternity leave, receive a minimum annual salary and be paid according to collective agreements.
FPI - What we do
Why does the gender pay gap prove so intractable? What is standing in the way of fair pay for all? What do companies need to do in order to put sustainable pay strategies into practice?
Knowing about the pay gap and being willing to rid the world of the unjust state of affairs are evidently not enough to actually ensure fair pay. It is right here ...