Both Spain and Portugal have published draft legislation to comply with the EU Pay Transparency Directive, despite August traditionally being a quieter period for European lawmaking.
The EU Pay Transparency Directive, formally known as Directive (EU) 2023/970, required transposition into national law by 7 June 2026 across all EU member states.
Spain published its draft Royal Decree on 4 August 2026, with Portugal following just one day later by publishing its own draft proposal on 5 August 2026.
Consultation periods for both drafts were notably brief, closing on 24 August for Spain and 25 August for Portugal, leaving limited time for stakeholder input.
Despite being published within days of each other, the approaches taken by the two governments vary considerably in their interpretation of the Directive’s requirements.
Under Spain’s existing framework, established through Royal Decree 902/2020, all employers regardless of size must maintain a pay register showing arithmetic mean and median pay broken down by sex, pay component, and professional classification.
Where the arithmetic mean or median of total pay for one sex exceeds the other by 25 percent, Spanish employers are required to include a written justification in the pay register.
This existing 25 percent threshold is a separate and distinct requirement from the Directive’s own 5 percent trigger, which applies when an employer meets the employee threshold for gender pay gap reporting.
Spain also already mandates pay audits for employers with 50 or more workers, placing it ahead of many EU member states in terms of existing pay transparency obligations.
Portugal’s draft legislation takes a different approach, aligning more closely with the Directive’s broader language by assessing four key factors: responsibility, effort, skills, and working conditions.
Both countries will require employers with 50 or more workers to report on the gender pay gap, setting a significantly lower threshold than the Directive itself demands.
Under the Directive’s own framework, employers with 250 or more workers must report annually, while those with between 50 and 249 workers are only required to report every three years.
The first reports under the Directive are due by 7 June 2027 for employers with 150 or more workers, with smaller employers in the 50 to 149 bracket facing a deadline of 7 June 2031.
By moving beyond the Directive’s minimum requirements, both Spain and Portugal are signalling a more ambitious domestic approach to closing the gender pay gap across their workforces.
Further legislation from both governments is expected in due course, with the aim of providing greater clarity on provisions that remain unaddressed in the current draft texts.
Employers operating in Spain and Portugal should monitor developments closely as both governments move toward finalising their respective transposition frameworks before the deadline passes.