Today, the Ministry of Labor and Employment (MTE) provided clarifications on the Salary Transparency Report. The Report aims to assess the equality of pay and remuneration between men and women, as provided for in Law 14,611/23.[1]
According to the MTE, the first Salary Transparency Report will be available to companies by March 15. Each company will have until the end of the same month to publish its respective Report on its websites, social media, or similar channels, in a visible place, in order to ensure wide dissemination to its employees, workers and the general public.
The Pay Transparency Report will be divided into two parts and will consist of the following information:
- total number of employees considering gender and race/ethnicity;
- ratio between the remuneration of women and men, considering the average salary actually paid in 2022 and the average contractual and hiring salaries in 2023 – the comparison will be made based on the Major Groups of Occupations of the Brazilian Classification of Occupations (CBO); and
- additional information provided by the companies on the Emprega Brasil Portal.
According to MTE representatives, any cent difference that does not have a valid legal explanation will indicate discrimination. In this situation, the development of an action plan by the company will be required and employers will be exposed to the fines established by the legislation.
In view of the various doubts that have arisen about the Salary Transparency Report, the presentation of the model in today's event was important, as it brought greater clarity to companies. Employers are now able to visualize how the information will be used by the MTE and disseminated in practice, which will allow them to anticipate potential distortions and prepare to address them.
Based on the considerations presented by the MTE, we understand that the methodology to be adopted does not comply with the requirements for salary equalization, especially work of equal value and the exercise of the same function, as it does not follow the concept provided for in article 461, first paragraph of the Brazilian Labor Law (CLT) nor the provisions of Law 14,611/23 itself.
The use of average – and outdated remuneration (information from 2022 and 2023) – as a parameter is also based on a non-objective comparative basis, which does not reflect the company's current reality.
The use of the Major Groups of Occupations as a grouping parameter for comparing the remuneration of women and men indicates a broad assessment without the specificity that the theme requires (exercise of the same function). This is because this classification corresponds to the broadest level of the CBO, composed of only ten groups of occupations, which, individually, aggregate competencies and similarities of the activities performed by the respective specific occupations that compose them.
If we already suspected that the use of the CBO would make the result of the Salary Transparency Report uncertain, now we are sure that the data used will generate inconsistencies that do not reflect the reality of the companies.
There will be no comparison of pay between women and men performing the same activity or holding the same function. Depending on how men and women are distributed in the company's positions, the information disclosed in the Salary Transparency Report will indicate wage differences that, in practice, are not linked to gender discrimination.
The model presented by the MTE also does not use criteria/data that allow the identification of possible inequalities arising from nationality and age, disregarding part of the parameters established by Law 14,611/23.
The complementary information filled in by companies on the Emprega Brasil Portal will simply be reproduced by the MTE in the Salary Transparency Report. There will be no context or explanation of the purpose of the questions and, consequently, what context the answers fit into.
In other words, once again, the Salary Transparency Report does not explore practical issues that need clarification or even ignores specific methodologies used by companies that would make a difference in the result of the comparative analysis.
By opting for the methodology presented, the MTE disregards the current corporate structures of the largest companies in Brazil. The model released will treat the topic in a superficial way.
The proposed report, therefore, tends to generate more distortions than constructive discussions for the benefit of such a noble purpose and will not allow to achieve the result intended by the legislator when drafting Law 14,611/23 – verifying real gender equality in companies.
During the event, MTE representatives expressed concern about structural discrimination and clarified that, if companies have valid legal explanations for the identified salary differences, these differences will not characterize discrimination or violation of the Equal Pay Law (as in the case of pay differences related to the achievement of performance goals, specific characteristics of a particular occupation, difference in seniority among the employees who were grouped by the MTE analysis).
Before assessing the company, it was also clarified that the MTE will allow the company to explain whether there are legally valid reasons to justify the salary differences identified.
In view of the above, regardless of the disclosure by the MTE of the Salary Transparency Report and the fact that the representatives of the MTE and the Ministry of Women have expressly said that companies do not need to prepare their own Salary Transparency Reports, we understand that it remains essential and highly recommendable for companies to prepare their own reports.
In these documents, companies must observe the labor legislation correctly and address the inconsistencies and distortions pointed out in the model used by the MTE. Companies need to be prepared to provide the necessary information and clarifications to government authorities and also to society, demonstrating that there is no gender discrimination in their organization.
Machado Meyer Advogados will continue to monitor the evolution of the matter and its potential developments.
[1] The full MTE livestream, which was attended by representatives of the MTE and the Ministry of Women involved in the project, is available at this link.
