Equal Salary Law: how is its implementation going and what to take into account to adapt to it?

Last Sunday, March 6, it was four years since the regulation of the Equal Pay Law (Law No. 30709)which aims to avoid possible situations of discrimination in terms of salary due to gender or other reasons, by designing bands based on the level of contribution of each position to the achievement of the company’s objectives.

“In Peru, an important group of companies is complying with the regulations, since they already had salary bands prepared based on the evaluation of their positions and this was the starting point to adapt to the demands. Others worked on the implementation quickly and some are still in the process of adapting to the standard and have been making significant efforts to do so”, explains Alejandra Osorio, head of human capital consulting in the Labor Area of ​​EY Peru.

Regarding the implementation process, he states that “companies face two important challenges, regardless of their size, sector or origin: the customization of structures and the availability of budget to close gaps”.

“Regarding the first point, the problem is that there are companies that name the position based on the people who occupy it or specific situations. This, without taking into account the real functions that will be developed and the profile that the employee should have. This generates disorder in the organization and we can find positions with the same name, with different responsibilities and salaries”, says Osorio.

Here are some considerations that companies must follow to apply the obligations of the Equal Pay Law (Law No. 30709) in a correct way:

• Have a Job Description Manual (MOF): in which the characteristics of each position are specified, such as the management or department to which it belongs, mission of the position, main functions, responsibility for decision-making, experience requirements, academic training, languages, handling of technological tools, conditions in which they carry out their work, soft skills, among others.
• Assess all jobs with objective criteria: through qualitative and quantitative methodologies by taking into account only the real requirements of the position, as well as considering the functions that must be performed and not the characteristics of the person who occupies the position.
• Analyze the internal equity of the organization’s salaries: take into account the remuneration of the collaborators of the different categories and the value of the position held.
• Identify remunerative deviations and the objective causes that justify them: In the case of unjustified differences, the company must develop a gap-closing plan that prioritizes the most critical cases, according to budget availability.
• Prepare salary policy: detailing the criteria considered by the company to manage its remuneration and salary increases, the assignment of training and the management of situations of incapacity.
• Communicate: The company must communicate the established salary policy to all its collaborators.

Sanctions related to non-compliance with the Equal Pay Law

The Equal Pay Law establishes five obligations that companies must comply with. These are: define an internally equitable salary structure, have a table of categories and functions, establish a salary policy for the management of compensation and promotions, communicate the defined salary policy to the organization’s employees, and justify the differences existing salaries based on objective supports.

Failure to comply with this regulation is linked to infractions classified as very serious and the amount of the corresponding fines is calculated based on the number of employees affected. If we take as an example a company with 116 workers, the fine for not having the proper implementation of the regulations could amount to S/ 293,526.

Likewise, it is important to bear in mind that, in the event that the inspector determines the existence of discrimination against any worker, in addition to the fine for the very serious infraction and its surcharge, the company must reimburse the discriminated employee the difference in relation to the of reference of the following concepts: remuneration, CTS, gratuities, legal bonuses and interest, according to information from EY Peru.