New Guidance on Brazil's Gender Pay Gap Law Includes Union in the Action Plan

The Ministry of Labor and Employment (MTE) has recently released Normative Instruction No. 6, trying to address some controversial points in the gender pay gap law. The new guidance includes union involvement in the company’s action plan process. 

HR Policy Global’s Take: Brazil’s equal pay law requires companies with more than 100 employees to publish pay transparency reports twice a year. As the implementation is facing multiple challenges, MTE provides more information on the action plan by a company with unjustified salary differences, including involving unions in preparing and executing the Action Plan.

Action Plan: the evaluation of the reports is called Labor Audit. If a Labor Audit identifies unjustified salary differences, companies must submit an Action Plan within 90 days. This plan should include:

• Priority measures: Clearly defined actions to address disparities, ranked by importance.
  
  
• Goals and timelines: Specific objectives, deadlines, and methods for assessing progress.
  
  
• Training programs: Initiatives to educate managers and staff on gender equity and diversity.
  
  
• Union involvement: Representatives from labor unions and employee representatives in workplaces will actively participate in preparing and executing the Action Plan, as outlined in collective bargaining agreements or, if those are absent, through an employee committee.

Disclosure obligations: the pay transparency reports must be easily accessible on company websites and social media. Confidentiality is maintained by only disclosing information involving at least three employees per gender to prevent identification.

The bottom line: The MTE’s focus on inspections requires companies to comply with these regulations to avoid potential legal ramifications.