Portugal Equal Pay Framework

Overview

The legal framework for equal pay in Portugal is primarily anchored in Law No. 60/2018 of August 21, which introduced comprehensive measures to promote equal remuneration between women and men for equal work or work of equal value. This legislation, which came into force in February 2019, represents a significant step in combating persistent gender pay gaps and ensuring transparency in remuneration policies across the Portuguese labor market. It builds upon the foundational principles enshrined in the Portuguese Constitution and the Labour Code, which have long prohibited discrimination based on sex in employment and remuneration. The law was proposed by the Portuguese Government, specifically through the areas of Employment and Citizenship and Equality, with the explicit aim of providing more effective tools to address existing pay asymmetries and align with European and international standards.

Prior to Law No. 60/2018, Portugal already had legal provisions against pay discrimination, notably in Article 24 and Article 270 of the Labour Code, which guarantee the right to equal opportunities and equal treatment, including equal pay for equal work. However, these provisions often lacked the specific enforcement mechanisms needed to proactively identify and rectify systemic pay disparities. The 2018 law introduced innovative and proactive mechanisms, such as the 'Barometer of Pay Differences between Women and Men' and mandatory evaluation plans for companies with identified pay discrepancies. These innovations were crucial for moving beyond mere prohibition to active enforcement and proactive identification of inequalities, thereby strengthening the legal framework and providing concrete tools for both employers and employees to address pay equity issues.

While the document ID 'RET-PT-NA-LAWNO13-2023' might suggest a primary focus on Law No. 13/2023 of April 3, it is important to clarify that Law No. 13/2023 primarily introduces broader amendments to the Labour Code, addressing various aspects of labor relations, including digital platform work, disciplinary procedures, and work-life balance, rather than being the standalone, comprehensive equal pay legislation. The core framework for 'Equal Pay for Equal Work' in Portugal, with its specific mechanisms for transparency, reporting, and enforcement, remains Law No. 60/2018. This regulation entry will therefore detail the provisions of Law No. 60/2018, its interaction with the Labour Code, and the roles of key enforcement bodies, providing a comprehensive overview of Portugal's approach to pay equity and its ongoing evolution in response to national and European developments.

Definitions

The Portuguese legal framework for equal pay relies on several key definitions to ensure the comprehensive application of the principle of non-discrimination. Central to this is the concept of 'equal pay for equal work or work of equal value'. 'Equal work' generally refers to situations where employees perform identical or very similar tasks and responsibilities within the same organization. This implies a direct comparison of roles that are substantively the same in nature, conditions, and requirements. The Labour Code, particularly Article 270, explicitly enshrines the principle of 'a trabalho igual, salário igual' (equal work, equal pay), ensuring that remuneration is determined by the quantity, nature, and quality of work, without unjustified discrimination based on sex or any other protected characteristic.

The more expansive concept of 'work of equal value' is critical for addressing indirect discrimination and encompasses jobs that, while different in nature, are considered equivalent based on objective, gender-neutral criteria. These criteria typically include skills, effort, responsibility, and working conditions. Law No. 60/2018 mandates that employers establish transparent remuneration policies based on the evaluation of job components using such objective and gender-neutral criteria. This ensures that jobs traditionally held by women, which may be systematically undervalued due to historical biases, are assessed fairly against jobs predominantly held by men. The objective is to eliminate any pay disparities that cannot be justified by such neutral, non-discriminatory criteria, thereby promoting a more equitable valuation of different types of work.

'Remuneration' (retribuição) is broadly defined in the Portuguese Labour Code, specifically in Article 24(2)(c) and Article 258, to include not only the base salary but also all other benefits, whether paid directly or indirectly, in cash or in kind, by the employer to the employee. This comprehensive definition ensures that all components of an employee's compensation package are subject to the equal pay principle. This includes, but is not limited to, bonuses, allowances, commissions, benefits in kind, and any other payments linked to the employment relationship. This broad scope is essential to prevent employers from circumventing equal pay obligations by differentiating non-base pay components. The law also clarifies that differences in pay due to parental leave or related exemptions are not justifiable, reinforcing the protection of parental rights within the equal pay framework.

Covered Employers

The provisions of Law No. 60/2018 apply broadly to all employers in Portugal, encompassing both the private and public sectors, without specific size thresholds for the fundamental principle of equal pay. The core obligation to ensure equal remuneration for equal work or work of equal value is universal, meaning every employer, regardless of size or sector, must adhere to this principle. This universal application underscores Portugal's commitment to eradicating pay discrimination across its entire labor market. There are no explicit exemptions for specific industries or types of organizations, reinforcing the comprehensive reach of the legislation.

However, while the principle is universal, certain reporting and auditing obligations, particularly those related to the 'Barometer of Pay Differences' and the requirement to submit evaluation plans, are primarily triggered for employers who are identified as having potential pay discrepancies based on the data they submit annually through the 'Relatório Único' (Unique Report). This report, which collects detailed employee-level data, is mandatory for all employers with employees. The Authority for Working Conditions (ACT) then analyzes this data to identify companies with statistically significant gender pay gaps, prompting them to engage in a more detailed assessment and corrective action. This targeted approach ensures that resources are concentrated on areas where pay equity issues are most prevalent, while maintaining the overarching principle for all.

The 'Selo da Igualdade Salarial' (Seal of Equal Pay) initiative, awarded by the Commission for Equality in Work and Employment (CITE), targets companies with more than one employee that demonstrate a low gender pay gap (between 1% and -1%) and a minimum representation of the less represented sex (at least one-third of the workforce). While this is a recognition program rather than a mandatory obligation, it serves as an incentive for a wider range of employers, including small and medium-sized enterprises (SMEs), to actively pursue and demonstrate pay equity. This mechanism, alongside the general enforcement, aims to foster a culture of pay transparency and equality across all types and sizes of organizations operating in Portugal, encouraging voluntary compliance and best practices beyond the minimum legal requirements.

Employee Rights

Under Portuguese law, employees are endowed with robust rights to ensure pay equity and challenge discriminatory practices. The fundamental right to equal pay for equal work or work of equal value is enshrined in the Labour Code (Article 270) and reinforced by Law No. 60/2018. This means that workers cannot be discriminated against in terms of remuneration based on gender or other protected characteristics. Employees have the right to equal working conditions, particularly concerning pay, and any factors determining remuneration must be free from gender-based discrimination. This includes not only base salary but also all other components of remuneration, ensuring a holistic approach to compensation equality.

A crucial right for employees and their representative bodies (unions) is the ability to request an opinion from the Commission for Equality in Work and Employment (CITE) regarding suspected cases of gender-based wage discrimination. This request must be submitted in writing and include a substantiated allegation of discrimination, providing CITE with sufficient information to conduct its assessment. CITE's role is to provide a final, non-binding opinion, which is then notified to the Authority for Working Conditions (ACT) to initiate proceedings for gender-based discrimination and the potential application of fines. This mechanism empowers employees and unions to actively participate in the enforcement of equal pay principles, providing an accessible avenue for addressing grievances and leveraging expert assessment.

Furthermore, the upcoming transposition of the EU Pay Transparency Directive (EU 2023/970), which Portugal is obligated to integrate into national law by June 7, 2026, will significantly strengthen employee rights. This directive grants employees the right to request and receive information about their individual remuneration level and the average remuneration levels, disaggregated by sex, for categories of workers performing equal work or work of equal value. It also prohibits employers from preventing employees from disclosing their remuneration for the purpose of ensuring the effective application of the equal pay principle, thereby fostering greater transparency and collective action. These forthcoming provisions will enhance transparency and provide employees with more direct tools to identify and challenge potential pay discrimination, moving towards a more proactive and informed workforce.

Pay Transparency Requirements

Portugal's Law No. 60/2018 significantly bolstered pay transparency requirements, moving beyond general prohibitions on discrimination to mandate proactive measures from employers. A cornerstone of this is the requirement for employers to maintain a transparent remuneration policy. This policy must be based on the evaluation of job components using objective and gender-neutral criteria. The aim is to ensure that the criteria used to determine pay, pay levels, and pay progression are clear, accessible, and free from any discriminatory bias. This transparency is crucial for both employees to understand how their pay is determined and for regulatory bodies to assess compliance, fostering a culture of fairness and accountability within organizations.

While the current law does not explicitly detail requirements for salary range disclosure in job postings or public pay scale publication in the same way some other jurisdictions do, the emphasis on transparent remuneration policies and objective job evaluation criteria serves a similar purpose. Employers are expected to have internal systems that can justify pay differences based on objective factors, rather than allowing opaque practices to perpetuate gender pay gaps. The annual submission of employee-level pay data through the 'Relatório Único' (Unique Report) to the Ministry of Labor, Solidarity, and Social Security also contributes to transparency, as this data is used to generate the 'Barometer of Pay Differences' and identify potential discrepancies that warrant further investigation.

The upcoming transposition of the EU Pay Transparency Directive (EU 2023/970) by June 7, 2026, will introduce more explicit and stringent pay transparency requirements. These will include obligations for employers to provide information on the initial pay level or range in job advertisements or before the job interview, ensuring applicants have crucial information upfront. Furthermore, employers will be required to inform employees annually about their right to request and receive written information on their individual pay level and the average pay levels, disaggregated by sex, for categories of workers performing equal work or work of equal value. These measures are designed to empower job applicants and employees with more information to negotiate fair pay and identify potential discrimination, significantly enhancing the transparency landscape in Portugal.

Reporting & Audit Obligations

Portuguese legislation, particularly Law No. 60/2018, imposes significant reporting and audit obligations on employers to monitor and address gender pay gaps. Employers are required to submit employee-level pay data annually through the 'Relatório Único' (Unique Report) to the Ministry of Labor, Solidarity, and Social Security. This report contains detailed information on remuneration, broken down by various factors including gender, profession, qualifications, and other relevant employment characteristics. The submission deadline typically falls within the first half of the year, usually by March 31st, for data pertaining to the previous calendar year. This comprehensive data forms the essential basis for the government's analysis of gender pay disparities and for identifying potential areas of concern.

Based on the data submitted through the 'Relatório Único', the Ministry of Labor, Solidarity, and Social Security, through its Gabinete de Estratégia e Planeamento (GEP), publishes detailed information on the gender pay gap, both generally and by sector, as well as by company, profession, and qualifications. This public reporting, known as the 'Barometer of Pay Differences between Women and Men', aims to increase awareness and accountability across the labor market. If, after reviewing the submitted pay data, the government inspection authority (ACT) identifies potential pay discrepancies between men and women that cannot be justified by objective factors, the employer is formally notified of these findings and the need for corrective action.

Upon notification from ACT, the employer is legally obliged to submit a 'Pay Gap Assessment Plan' to the ACT within 120 working days. This plan must thoroughly assess the identified pay gaps, verify the assessment methodologies, detail the corrective measures taken or proposed, and demonstrate that any remaining gaps are not due to discriminatory practices but rather to objective, gender-neutral criteria. The evaluation plan should have a one-year implementation period, during which the employer must actively work to justify existing differences or to eliminate unjustified disparities. After one year, the employer must report the results of the plan's implementation back to the ACT, demonstrating the justified pay differences and the correction of any unjustified ones. Failure to comply with the obligation to submit or implement this plan constitutes a serious administrative offense, subject to penalties.

Governance & Enforcement Bodies

The enforcement and governance of equal pay legislation in Portugal are primarily overseen by two key bodies: the Commission for Equality in Work and Employment (CITE) and the Authority for Working Conditions (ACT). CITE is a tripartite collegiate body with administrative autonomy and legal personality, whose mission is to promote equality and non-discrimination between men and women in work, employment, and vocational training. It also collaborates in the application of legal and conventional provisions in this area, including those related to parental protection and work-life balance. CITE provides legal support and non-binding opinions on cases of discrimination, including pay discrimination, and communicates its findings to the competent inspection bodies, acting as a crucial advisory and investigative entity.

The Authority for Working Conditions (ACT) is the national labor inspection authority responsible for verifying and ensuring compliance with labor laws, including those related to equal pay. ACT receives notifications from CITE regarding suspected cases of discrimination and is responsible for opening proceedings, conducting thorough investigations, and applying fines for non-compliance. ACT actively monitors pay data submitted by employers through the 'Relatório Único' and initiates investigation actions, notifying employers of potential disparities and requiring them to submit 'Pay Gap Assessment Plans'. ACT's role is crucial in the practical enforcement of the law, ensuring that employers take concrete steps to address identified pay gaps and comply with their legal obligations.

The complaint filing process typically involves an employee or a union representative submitting a written request to CITE, substantiating the allegation of wage discrimination with relevant details. CITE then conducts its assessment and issues an opinion, which, if it indicates discriminatory practices, is formally forwarded to ACT. ACT then proceeds with an in-depth investigation, which may involve site visits, document review, and interviews. If discrimination is proven, ACT can issue orders for compliance and impose penalties. This two-tiered approach leverages CITE's specialized expertise in equality matters and ACT's authority in labor inspection and enforcement, creating a comprehensive and effective system for addressing pay discrimination. The Ministry of Labor, Solidarity, and Social Security also plays a significant role in publishing aggregated gender pay gap data and overseeing the overall policy framework and strategic planning.

Monitoring & Evaluation

Monitoring and evaluation of pay equity in Portugal are multi-faceted, involving regular data collection, rigorous statistical analysis, and targeted inspections. The primary mechanism for monitoring is the annual submission of employee-level pay data by employers through the 'Relatório Único'. This comprehensive report allows the Ministry of Labor, Solidarity, and Social Security, through its specialized departments like the Gabinete de Estratégia e Planeamento (GEP), to compile and analyze statistical information on remuneration differences between men and women. The 'Barometer of Pay Differences between Women and Men' is a key output of this process, providing aggregated data by sector, company, profession, and qualification, which is publicly disseminated to foster transparency and accountability and inform policy decisions.

The Authority for Working Conditions (ACT) plays a direct and proactive role in evaluating compliance by initiating investigation actions. Based on the analysis of the 'Relatório Único' data, ACT identifies employers with potential pay disparities that cannot be objectively justified and formally notifies them. These notifications trigger the requirement for employers to develop and submit a 'Pay Gap Assessment Plan' within 120 working days. The plan itself serves as an internal audit, requiring employers to meticulously evaluate their remuneration structures, identify the root causes of any discrepancies, and propose concrete corrective measures to eliminate unjustified gaps. The effectiveness of these plans is then monitored over a one-year implementation period, after which employers must report the results of their implementation to ACT, demonstrating the justified pay differences and the correction of any unjustified ones.

The Commission for Equality in Work and Employment (CITE) also contributes to monitoring and evaluation by providing expert opinions on alleged discrimination cases and, where necessary, conducting visits to workplaces to gather evidence of discriminatory practices. The evaluation criteria for pay differences are strictly based on objective and gender-neutral factors, such as skills, effort, responsibility, and working conditions, as mandated by Law No. 60/2018 and the Labour Code. Any pay differences that cannot be justified by such objective criteria are considered discriminatory. The ongoing monitoring and evaluation efforts are crucial for tracking progress in reducing the gender pay gap, for identifying emerging trends, and for adapting policies and enforcement strategies as needed, especially in light of the upcoming EU Pay Transparency Directive which will introduce further requirements for monitoring and reporting.

Enforcement & Penalties

The Portuguese legal framework provides for robust enforcement mechanisms and significant penalties to ensure compliance with equal pay provisions. Gender-based discrimination in remuneration is classified as a 'very serious offense' under the Portuguese Labour Code (Article 338). This classification reflects the gravity with which such violations are viewed and allows for substantial fines. The fines for very serious offenses can range from €2,040 to €61,200, depending on the severity of the infraction, the size of the employer (e.g., micro, small, medium, or large enterprise), and other aggravating or mitigating circumstances, such as recidivism or the number of affected employees. These penalties are designed to act as a strong deterrent against discriminatory pay practices and to encourage proactive compliance.

Beyond monetary fines, failure to comply with specific obligations introduced by Law No. 60/2018 can lead to additional, impactful sanctions. Notably, if an employer fails to submit a 'Pay Gap Assessment Plan' when required by the Authority for Working Conditions (ACT), or fails to implement the plan effectively to address identified disparities, they are subject to administrative sanctions. A particularly impactful ancillary sanction for non-compliance is the deprivation of the right to participate in public auctions or tenders for a period of up to two years. This measure can significantly impact businesses that rely on public contracts, providing a strong economic incentive for compliance and demonstrating the government's commitment to using all available tools to enforce pay equity.

The enforcement process typically begins with an investigation by ACT, often triggered by a complaint from an employee or union, or by ACT's own analysis of the 'Relatório Único' data. If discrimination is proven, the employer is legally required to address the pay difference within 180 days, ensuring that the affected employees receive the correct remuneration. Employees who have been subjected to discrimination are entitled to compensation for both material and non-material damages, under general civil law principles, which can be pursued through the courts. The appeals process for administrative offenses follows the general regime of administrative infractions, allowing employers to challenge decisions through the appropriate administrative and judicial channels. The combination of substantial fines, ancillary sanctions, and the right to compensation aims to provide comprehensive protection against pay discrimination and ensure effective redress for victims.

Relationship to Other Laws

Portugal's equal pay legislation operates within a broader legal ecosystem, interacting with and complementing several other key laws. The foundational principles are enshrined in the Portuguese Constitution (Constituição da República Portuguesa), particularly Article 13, which establishes the general principle of equality, and Article 59, which guarantees the right to equal working conditions and remuneration, without discrimination. These constitutional provisions establish the overarching commitment to equality and non-discrimination, which are then elaborated upon and operationalized in specific legislation, ensuring that equal pay is a fundamental right protected at the highest legal level.

The most direct and significant interaction is with the Portuguese Labour Code (Código do Trabalho). Law No. 60/2018 directly amends and reinforces provisions within the Labour Code, particularly Article 24, which guarantees equal opportunities and treatment in employment, and Article 270, which explicitly mandates equal pay for equal work or work of equal value. The Labour Code provides the general framework for employment relations, and the equal pay provisions are integrated into this broader structure. For instance, the definitions of 'remuneration' (Article 258) and 'discrimination' (Article 24) found in the Labour Code are directly applicable to the interpretation and enforcement of equal pay laws. Law No. 13/2023, a recent amendment to the Labour Code, further reinforces general principles of equality and non-discrimination, particularly in new areas like digital platform work and work-life balance, ensuring that these principles extend to evolving employment models and modern work arrangements.

Furthermore, the Portuguese legal framework is significantly influenced by and must align with European Union law. The principle of equal pay for male and female employees performing equal work is a fundamental tenet of the Treaty on the Functioning of the European Union (Article 157). Portugal, as an EU member state, is bound by this principle and by various EU directives aimed at promoting gender equality in employment, such as Directive 2006/54/EC. The recent EU Pay Transparency Directive (EU 2023/970) is particularly relevant, as Portugal, like all EU member states, is required to transpose this directive into national law by June 7, 2026. This directive will introduce new, more stringent requirements for pay transparency and enforcement, which will necessitate further adjustments and enhancements to Portugal's existing equal pay legislation, ensuring a higher standard of protection and transparency across the Union.

International Context

Portugal's commitment to equal pay is deeply rooted in international and European legal frameworks, reflecting a global consensus on gender equality in the workplace. At the international level, Portugal is a signatory to key International Labour Organization (ILO) conventions, most notably ILO Convention No. 100 on Equal Remuneration (1951) and Convention No. 111 on Discrimination (Employment and Occupation) (1958). These conventions establish the fundamental principle of equal remuneration for men and women for work of equal value and prohibit discrimination in employment and occupation. Portugal's national legislation, including Law No. 60/2018 and the Labour Code, is designed to align with and implement these international standards, demonstrating the country's dedication to upholding fundamental labor rights and promoting social justice on a global scale.

Within the European Union, the principle of equal pay for equal work or work of equal value is a cornerstone of EU law, enshrined in Article 157 of the Treaty on the Functioning of the European Union. Portugal, as an EU member state, is bound by this principle and by various EU directives aimed at promoting gender equality in employment, such as Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. The most recent and impactful development is the EU Pay Transparency Directive (EU 2023/970), approved in 2023. This directive establishes a clear framework for EU member states to strengthen the application of the equal pay principle through enhanced pay transparency and enforcement mechanisms.

Member states, including Portugal, have until June 7, 2026, to transpose this directive into their national laws. This will likely lead to further legislative updates in Portugal, introducing more explicit requirements for pay information in job advertisements, employee rights to request and receive pay information, and mandatory joint pay assessments for larger companies (over 100 employees) if significant pay gaps persist. These forthcoming changes will reinforce Portugal's position among countries with comprehensive pay equity laws, ensuring a higher standard of protection and transparency that is harmonized across the European Union and contributes to the global effort to close gender pay gaps.

Implementation Timeline

Compliance Checklist

Sources and References