Portugal Equal Pay Law

Overview

The foundation of pay equity in Portugal is primarily established by the Labour Code, approved by Law no. 7/2009 of February 12. This comprehensive legislation serves as the cornerstone of employment law in the country, integrating various principles of non-discrimination and equal treatment, including the fundamental right to equal pay. The 2009 Labour Code was a significant revision, transposing several European Union directives into national law, notably Directive 2006/54/CE concerning the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. It maintained and reinforced the core concepts related to the equal pay principle that had been present in previous labour legislation, ensuring that the right to equal conditions of work, particularly regarding remuneration, is guaranteed for all employees across both the public and private sectors.

While the Labour Code (Law no. 7/2009) provides the overarching framework, the specific and robust measures for promoting equal remuneration were significantly enhanced by Law no. 60/2018 of August 21. This subsequent legislation, which came into force on February 21, 2019, is often considered the 'Portugal Equal Pay Law' due to its direct focus on combating the gender pay gap. Law no. 60/2018 introduced a series of innovative mechanisms aimed at increasing pay transparency, obliging employers to justify wage differences, and strengthening the role of enforcement bodies. It represents a proactive governmental effort to move beyond mere prohibition of discrimination towards active promotion and enforcement of pay equity, addressing persistent asymmetries in remuneration between men and women through a combination of reporting, auditing, and corrective actions.

The combined effect of the Labour Code and Law no. 60/2018 underscores Portugal's commitment to aligning its national legislation with international and European standards on equal pay. These laws are crucial for fostering fairer and more inclusive workplaces, ensuring that remuneration is based on objective criteria rather than gender. The legislative framework aims to provide both preventative measures, through transparency and reporting, and corrective mechanisms, through audits and penalties, to effectively tackle gender-based pay discrimination. The evolution of this legal landscape reflects a growing understanding that explicit and robust measures are necessary to dismantle systemic inequalities and achieve genuine pay equity, promoting a culture of fairness and accountability within organizations.

Definitions

The Portuguese legal framework for equal pay relies on precise definitions to ensure comprehensive application and enforcement. Central to this is the concept of 'equal pay for equal work or work of equal value.' Article 31, paragraphs 1 and 2, of the Labour Code (Law no. 7/2009) explicitly states that workers have the right to equal remuneration for equal work or work of equal value. This principle mandates that any form of variable remuneration, such as task-based pay, must be established on the same unit of measure, and time-based remuneration must be identical for comparable work. Work of 'equal value' is not limited to identical job titles but considers a broader range of objective criteria, including qualifications, professional experience, responsibilities, and the specific conditions under which the work is performed. This ensures that jobs requiring similar skills, effort, and responsibility are compensated equally, irrespective of the gender of the worker, preventing subtle forms of discrimination where job titles might differ but the actual work content is equivalent.

The term 'remuneration' itself is broadly defined within the Labour Code to encompass all payments and benefits, whether in cash or in kind, that an employee receives from an employer in exchange for their work. This comprehensive definition ensures that the principle of equal pay extends beyond the basic salary to include all components of compensation, such as regular and irregular payments, bonuses, allowances, commissions, productivity premiums, and benefits in kind (e.g., company car, housing allowance, health insurance). This broad scope is critical to preventing indirect discrimination, where disparities might be hidden in supplementary payments rather than the base wage. The law aims to capture the total compensation package to ensure that no element is used to perpetuate gender-based pay gaps, thereby promoting a holistic approach to pay equity.

Furthermore, the legislation defines 'discrimination' in the context of pay, prohibiting any direct or indirect discrimination based on sex in relation to remuneration. Direct discrimination occurs when one person is treated less favourably than another in a comparable situation on grounds of sex. For example, paying a woman less than a man for the exact same job with the same experience. Indirect discrimination arises when an apparently neutral provision, criterion, or practice would put persons of one sex at a particular disadvantage compared with persons of the other sex, unless that provision, criterion, or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary. An example could be a bonus structure that disproportionately benefits roles predominantly held by men, without a clear, objective justification. These definitions are crucial for identifying and challenging subtle forms of pay inequality that might not be immediately obvious but still result in disparate outcomes based on gender, ensuring that both overt and systemic biases are addressed.

Covered Employers

The Portuguese equal pay legislation, particularly Law no. 60/2018, applies broadly to both private and public sector entities operating within the national territory. The scope of application for specific obligations, such as pay gap reporting and the development of evaluation plans, is primarily determined by the size of the employer, measured by the number of workers. Initially, during the first two years of its enforcement, from February 21, 2019, to February 20, 2021, the reporting and evaluation plan requirements under Article 5 of Law no. 60/2018 were applicable exclusively to employers with 250 or more workers. This phased approach allowed larger organizations, which typically have more complex pay structures and greater administrative capacity, to adapt to the new transparency and accountability measures first, setting a precedent for compliance.

Following this initial period, from the third year of its entry into force, specifically starting February 21, 2021, the scope of these obligations expanded significantly to include all employers, both private and public, that employ 50 or more workers. This expansion demonstrates a clear legislative intent to extend the reach of pay equity measures to a substantial portion of the Portuguese workforce, recognizing that gender pay gaps are not exclusive to very large corporations but can exist and persist in medium-sized enterprises. While the fundamental principle of equal pay for equal work or work of equal value applies to all employers regardless of size under the Labour Code (Law no. 7/2009), these specific transparency and corrective action mechanisms are tailored to organizations with a certain employee threshold to ensure practical implementability and impact, balancing regulatory burden with the goal of widespread pay equity.

There are no explicit exemptions for specific sectors or types of employers, other than the employee threshold for certain reporting and audit obligations. This means that companies in manufacturing, services, technology, retail, and all other economic activities, as well as public administration bodies, are subject to the law's provisions if they meet the employee count. The universality of the equal pay principle means that all employers are legally bound to ensure non-discriminatory remuneration practices, irrespective of their size. The phased-in approach for reporting obligations reflects a pragmatic strategy to allow businesses time to adjust their internal processes and data collection methods, facilitating compliance while progressively broadening the scope of active measures to combat the gender pay gap across the Portuguese economy, ensuring a comprehensive and equitable application of the law.

Employee Rights

Under the Portuguese Labour Code (Law no. 7/2009) and further reinforced by Law no. 60/2018, employees are endowed with several key rights aimed at ensuring pay equity and combating discrimination. Foremost among these is the fundamental right to equal remuneration for equal work or work of equal value, irrespective of gender. This right extends to all components of remuneration, including basic salary, bonuses, allowances, and benefits, ensuring that no element of compensation can be used to perpetuate gender-based disparities. Employees are entitled to working conditions, particularly regarding pay, that are free from any direct or indirect discrimination based on sex, and this right is enforceable through various legal avenues.

A significant enhancement introduced by Law no. 60/2018 is the right for employees or their union representatives to request an opinion from the Commission for Equality in Labour and Employment (CITE) regarding the existence of gender-based wage discrimination. This request must be submitted in writing and include a duly substantiated allegation of discrimination, providing specific details that support the claim. This mechanism provides a formal, accessible avenue for workers to challenge suspected pay disparities and seek an impartial assessment from a specialized body. CITE's role is to analyze the facts, gather necessary information, and issue a final, non-binding opinion on whether discrimination exists. This opinion is then notified to the Authority for Working Conditions (ACT), which can initiate proceedings for gender-based discrimination and apply fines if discrimination is confirmed, thereby providing a structured path for redress.

Furthermore, the law provides robust protection against retaliation. Dismissal or other sanctions allegedly imposed to punish a labour offense are presumed abusive if they occur within one year of an employee or union representative making a request for CITE's opinion on pay discrimination, or within one year of the ACT initiating an inspection or proceeding related to such a complaint. This presumption shifts the burden of proof to the employer, who must then demonstrate that the dismissal or sanction was based on legitimate, non-discriminatory grounds entirely unrelated to the discrimination complaint. This provision is critical for safeguarding employees who exercise their rights under the equal pay legislation, encouraging them to come forward without fear of adverse consequences. The Labour Code also guarantees the right to equal opportunities and equal treatment for all employees and job candidates, extending beyond pay to areas such as access to employment, vocational training, and career progression, ensuring a holistic approach to workplace equality and fostering an environment where employees feel secure in asserting their rights.

Pay Transparency Requirements

Portugal's equal pay legislation, particularly Law no. 60/2018, places a strong emphasis on pay transparency as a crucial tool for identifying and addressing gender pay gaps. One of the primary requirements is the annual availability of statistical information on pay differences. The Ministry responsible for the labour area is mandated to develop and make available a 'general and sectoral barometer of remuneratory differences between women and men' and a 'balance sheet of remuneration differences between women and men by company, profession, and qualification levels.' This information is compiled from legal and administrative sources, notably the detailed employee-level pay data provided by employers through the annual Single Report (Relatório Único). The public availability of this data aims to increase awareness, enable comparisons, and pressure companies to address disparities.

Employers are explicitly required to implement a transparent remuneration policy based on objective and non-discriminatory criteria. This means that pay structures, criteria for salary progression, bonuses, allowances, and other benefits must be clear, understandable, and applied consistently, without any gender bias. The objective criteria may include factors such as seniority, qualifications, professional experience, performance, responsibilities, and the complexity of the tasks performed. The aim is to eliminate opaque pay systems that can inadvertently or intentionally conceal discriminatory practices, thereby fostering a culture of fairness and accountability within organizations. This transparency extends to internal communication, where employees should be informed about the criteria used to determine their remuneration and career progression.

While Law no. 60/2018 does not explicitly mandate salary range disclosure in job postings in the same way as some other jurisdictions, the broader requirement for transparent pay policies and the public availability of pay gap data indirectly push companies towards greater openness. The government's annual publication of detailed gender pay gap data, broken down by economic activity sector and at the individual company level (for those meeting the employee threshold), serves as a powerful transparency mechanism. This public scrutiny, combined with the obligation for companies to justify pay differences, encourages employers to proactively review and adjust their remuneration practices to ensure compliance and avoid potential penalties. Furthermore, the right of employees or their representatives to request CITE's opinion on pay discrimination implicitly requires employers to be able to articulate and justify their pay structures, contributing to overall pay transparency within the workplace.

Reporting & Audit Obligations

Under Law no. 60/2018, Portuguese employers are subject to significant reporting and audit obligations designed to promote pay equity and identify gender-based disparities. A cornerstone of these obligations is the annual submission of detailed employee-level pay data. This data is collected through the 'Single Report' (Relatório Único), which all employers are already required to submit annually to the Ministry of Labour, Solidarity, and Social Security. The Single Report includes comprehensive information on each employee, such as gender, age, professional category, qualification level, type of contract, and all components of remuneration received during the year. This granular data is crucial for accurate analysis of pay differences.

The information provided in the Single Report is then used by the Ministry to generate two key transparency tools: the 'Gender Pay Gap Barometer' (Barómetro das Diferenças Remuneratórias entre Mulheres e Homens) and the 'Remuneration Differences Balance Sheet' (Balanço das Diferenças Remuneratórias entre Mulheres e Homens). The Barometer provides a general and sectoral overview of pay disparities across the country, while the Balance Sheet offers a company-specific breakdown, disaggregated by profession and qualification levels. The Ministry is required to make this information publicly available annually, typically in the first semester. Following the generation of these reports, the inspection authority of the Ministry responsible for the labour area, the Authority for Working Conditions (ACT), reviews the company-specific balance sheets. If the ACT identifies unjustified remuneration differences between men and women for equal work or work of equal value, it notifies the employer within 60 days of receiving the balance sheet that an evaluation plan is required.

Upon notification from the ACT, companies have a strict deadline of 120 days to prepare and submit an evaluation plan to the ACT. This plan must either demonstrate that the identified pay discrepancies are objectively justified by non-gender-related factors (e.g., seniority, qualifications, performance, specific responsibilities, or working conditions) or outline concrete measures to eliminate these disparities over a one-year period. The audit methodology, while not explicitly detailed in the law, implicitly relies on a comparative analysis of remuneration for jobs of equal value, considering objective criteria. The obligation to develop and implement such a plan effectively acts as a mandatory internal audit, compelling employers to actively address and rectify any identified gender pay gaps. Failure to submit the plan or to implement the corrective measures within the specified timeframe can lead to further penalties, ensuring that employers move beyond passive compliance to proactive equity promotion and sustained monitoring of their pay practices.

Governance & Enforcement Bodies

The enforcement and governance of pay equity in Portugal are primarily overseen by two key national bodies: the Commission for Equality in Labour and Employment (CITE - Comissão para a Igualdade no Trabalho e no Emprego) and the Authority for Working Conditions (ACT - Autoridade para as Condições de Trabalho). CITE is a tripartite body, meaning it includes representatives from the government, employers' associations, and trade unions, reflecting a collaborative and consultative approach to promoting equality in the workplace. Its mandate is broad, covering the promotion of equality and non-discrimination in employment, work, and vocational training, with a specific focus on gender equality. CITE plays a crucial advisory role, providing expert opinions and recommendations on matters of equality.

Under Law no. 60/2018, CITE plays a crucial role in the complaint and investigation process for alleged pay discrimination. Employees or their union representatives can submit a written request to CITE, providing a substantiated allegation of gender-based wage discrimination. CITE then conducts an investigation, which may involve requesting information from the employer, and issues a final opinion on the existence of such discrimination. This opinion is not directly binding on the employer in terms of imposing penalties, but it is a critical step in the enforcement chain. It serves as an authoritative assessment from a specialized body, lending credibility to the employee's claim. Once CITE issues its opinion, it is formally notified to the Authority for Working Conditions (ACT), signaling that a potential violation of equal pay principles has been identified.

The ACT is the primary labour inspection authority in Portugal, responsible for monitoring compliance with labour laws, including those related to equal pay. Upon receiving CITE's opinion indicating gender-based discrimination, the ACT is empowered to open a formal administrative proceeding, conduct further investigations, and apply appropriate fines and penalties as stipulated in the Labour Code. The ACT also proactively monitors compliance through its analysis of the annual Remuneration Differences Balance Sheets and conducts inspections based on its own initiative or other complaints. This interaction between CITE and ACT ensures a two-tiered approach: CITE provides expert assessment on discrimination allegations and promotes dialogue, while ACT handles the formal enforcement and sanctioning. This division of roles aims to provide both specialized expertise in equality matters and robust enforcement capabilities to ensure adherence to the equal pay legislation across the country, fostering a comprehensive system of oversight and accountability.

Monitoring & Evaluation

The monitoring and evaluation of pay equity in Portugal are multifaceted, involving both proactive data collection and reactive complaint investigation, underpinned by a systematic approach to identifying and rectifying disparities. A central element is the annual collection of detailed remuneration data from employers through the Single Report (Relatório Único). This comprehensive dataset forms the basis for the Ministry of Labour, Solidarity, and Social Security to produce the Gender Pay Gap Barometer and company-specific Remuneration Differences Balance Sheets. These reports serve as key monitoring tools, providing a statistical overview of pay disparities at both national and organizational levels, allowing for the identification of trends, persistent gaps, and specific areas requiring intervention. The public availability of these reports enhances transparency and facilitates external scrutiny.

The Authority for Working Conditions (ACT) is responsible for the inspection procedures and the investigation of complaints. When the Remuneration Differences Balance Sheet, generated from the Single Report data, indicates unjustified pay differences within a company (i.e., differences not attributable to objective, gender-neutral factors), the ACT proactively notifies the employer. This notification initiates a formal process that requires the company to submit an evaluation plan within 120 days. This plan must either provide objective justifications for the identified differences or outline concrete measures to eliminate these disparities over a one-year period. The ACT then monitors the implementation of this plan to ensure that the corrective measures are effectively put into practice and achieve the desired outcome of pay equity. This systematic follow-up ensures accountability and drives tangible change within organizations.

Complaints of gender-based pay discrimination can also be filed by employees or union representatives with the Commission for Equality in Labour and Employment (CITE). CITE investigates these allegations, gathers evidence, and issues an opinion on the existence of discrimination. This opinion then triggers ACT's enforcement actions, leading to further investigation and potential penalties if discrimination is confirmed. The evaluation criteria for assessing compliance include the objectivity and non-discriminatory nature of remuneration policies, the validity of justifications for any existing pay differences, and the effectiveness of corrective measures outlined in evaluation plans. The frequency of audits and inspections by ACT is not strictly defined as a fixed cycle for all companies but is often triggered by the analysis of the annual reporting data, specific complaints, or targeted campaigns focusing on sectors or companies with identified high pay gaps. This dynamic and responsive approach allows for resources to be focused on areas where pay disparities are most evident or where non-compliance is suspected, maximizing the impact of monitoring efforts.

Enforcement & Penalties

The Portuguese legal framework imposes significant enforcement mechanisms and penalties for violations of equal pay principles, particularly those related to gender-based discrimination. Gender-based discrimination in remuneration is classified as a 'very serious offence' under the Portuguese Labour Code. This classification reflects the gravity with which the legislator views such violations and allows for the application of substantial fines. The fines for very serious offenses can range from 2,040 to 61,200 Euros, depending on the severity of the infraction, the size of the employer (e.g., micro, small, medium, or large enterprise), and whether it is a repeat offense. These penalties are designed to act as a strong deterrent against discriminatory pay practices and to encourage employers to proactively ensure pay equity, emphasizing the financial consequences of non-compliance.

Beyond monetary fines, the law also provides for specific and robust protections against retaliation. If an employee or union representative requests an opinion from CITE regarding alleged pay discrimination, any dismissal or disciplinary sanction imposed on that worker within one year of the request is presumed to be abusive. This presumption shifts the burden of proof entirely to the employer, who must then demonstrate with clear and compelling evidence that the dismissal or sanction was based on legitimate, non-discriminatory grounds entirely unrelated to the discrimination complaint. An abusive dismissal can lead to its annulment, requiring the reinstatement of the employee, and the payment of significant compensation, which can include lost wages and moral damages. This strong protection is critical for safeguarding employees who exercise their rights under the equal pay legislation, encouraging them to come forward without fear of adverse consequences and ensuring the integrity of the complaint process.

The enforcement process typically involves the Authority for Working Conditions (ACT) initiating administrative proceedings based on CITE's opinion, its own inspections, or other complaints. If pay discrimination is proven, employers are not only subject to fines but are also legally required to address and rectify the pay difference within a specified timeframe, typically 180 days from the date of the final decision. This rectification involves adjusting the remuneration of the discriminated employee(s) to match that of their comparators, often with retroactive effect. Failure to comply with the obligation to submit an evaluation plan, to implement the corrective measures outlined in it, or to rectify proven discrimination can lead to further penalties and escalating enforcement actions. While criminal liability is generally reserved for more severe forms of discrimination or repeated serious offenses, the robust administrative fines, the mandatory rectification orders, and the strong protections against retaliation provide a comprehensive enforcement regime aimed at ensuring compliance and promoting genuine pay equity in the Portuguese labour market. Appeals against ACT decisions follow the standard administrative and judicial procedures outlined in Portuguese labour law, allowing for due process.

Relationship to Other Laws

The Portuguese equal pay legislation operates within a complex web of national and international legal instruments, demonstrating a layered and comprehensive approach to combating discrimination. At the highest national level, the principle of equality and non-discrimination, including equal pay, is enshrined in the Portuguese Constitution, particularly in Article 13 (Principle of Equality) and Article 59 (Rights of Workers). This constitutional mandate provides the fundamental legal basis for all subsequent legislation on the matter, ensuring that equal pay is a protected constitutional right. The Labour Code (Law no. 7/2009) serves as the primary legislative instrument, detailing the general principles of employment law, including the right to equal opportunities and equal treatment, particularly concerning remuneration, and setting out the basic framework for labour relations.

Law no. 60/2018, which specifically addresses measures for promoting equal remuneration, acts as a crucial amendment and complement to the Labour Code. It explicitly amends several existing laws to integrate its new provisions, ensuring a coherent legal framework. These amendments include changes to Law no. 10/2001 (which established an annual report on equal opportunities), Law no. 105/2009 (which regulates and amends the Labour Code), and Decree-Law no. 76/2012 (which approves the organic structure of CITE, clarifying its powers and responsibilities in the context of pay equity). This intricate relationship ensures that the new equal pay measures are integrated seamlessly into the existing legal framework, strengthening and operationalizing the principles already present in the Labour Code and other related statutes. The new law also clarifies the application of the contra-ordenational regime (administrative offenses) regulated in the Labour Code for violations of its provisions, ensuring that penalties are consistent and enforceable.

Internationally, Portuguese law is heavily influenced by European Union directives, which are directly transposed into national legislation. The Labour Code itself transposed Directive 2006/54/CE, which consolidates previous EU directives on equal treatment for men and women in employment and occupation, including the principle of equal pay. More recently, Portugal is actively engaged in the process of transposing the EU Pay Transparency Directive (Directive (EU) 2023/970), which will introduce even more stringent pay transparency measures across the EU, such as the right to information on pay levels, salary range disclosure in job advertisements, and joint pay assessments. This ongoing transposition will likely lead to further amendments to the Labour Code and Law no. 60/2018, ensuring that Portugal's national legislation remains aligned with the evolving European standards and continues to strengthen its commitment to pay equity. Furthermore, Portugal is a signatory to key International Labour Organization (ILO) conventions, such as Convention No. 100 on Equal Remuneration and Convention No. 111 on Discrimination (Employment and Occupation), which underpin the national commitment to pay equity and non-discrimination, reflecting a global standard for fair labour practices.

International Context

Portugal's commitment to pay equity is deeply rooted in its adherence to international and European legal frameworks, demonstrating a robust alignment with global standards for fair labour practices. As a member state of the European Union, Portugal is fundamentally bound by the principle of equal pay for male and female workers for equal work or work of equal value, as enshrined in Article 157 of the Treaty on the Functioning of the European Union (TFEU). This principle has direct effect and has been further elaborated through various EU directives, notably Directive 2006/54/CE, which the Portuguese Labour Code (Law no. 7/2009) explicitly transposed into national law. This directive provided a comprehensive framework for equal opportunities and equal treatment in employment, including specific provisions on equal pay, which Portugal integrated into its domestic legal system, ensuring consistency with broader European objectives.

The ongoing process of transposing the new EU Pay Transparency Directive (Directive (EU) 2023/970) signifies Portugal's continued effort to align its national legislation with the most advanced European standards. This directive, which must be transposed by June 7, 2026, will introduce more robust measures for pay transparency and enforcement across the Union, including requirements for salary range disclosure in job advertisements, the right for employees to request information on average pay levels, and mandatory joint pay assessments for companies with significant pay gaps. Portugal's proactive stance in implementing Law no. 60/2018 already positions it favorably for this transposition, as many of its provisions anticipate the EU directive's requirements, further solidifying its leadership in pay equity within the EU context.

Beyond the European context, Portugal is a staunch supporter of the International Labour Organization (ILO) and has ratified key ILO conventions relevant to pay equity. These include ILO Convention No. 100 on Equal Remuneration (1951), which calls for equal remuneration for men and women for work of equal value, and Convention No. 111 on Discrimination (Employment and Occupation) (1958), which aims to eliminate discrimination in all aspects of employment. These conventions establish the foundational principles of equal pay and non-discrimination, guiding Portugal's legislative and policy development in this area. Portugal's membership in the Equal Pay International Coalition (EPIC) since 2019 further underscores its dedication to reducing the gender pay gap through legislative and non-legislative initiatives, including projects, campaigns, tools, and reports aimed at building knowledge and raising awareness. This active engagement in global initiatives reflects a comprehensive strategy to tackle pay inequality, drawing on international best practices and contributing to global efforts for gender equality in the workplace, reinforcing its commitment to a fair and equitable labour market.

Implementation Timeline

Compliance Checklist

Sources and References