Almost nine out of ten Portuguese companies admit they are not yet prepared for the new pay transparency rules, which are included in the European directive that the country will have to transpose by next summer. Speaking to ECO, Joana Brito, from Aon, emphasises that this is a worrying scenario, which should serve as a warning to companies and policymakers.

According to this year's "Pay Transparency Study" by the aforementioned multinational, only 14% of companies in Portugal say they are prepared to comply with the new requirements, while 58% indicate they are preparing and 28% admit they are not ready at all.

In other words, 86% of organisations are still not ready for the changes to labour laws set to take place in June of next year, particularly the requirement to immediately indicate salary ranges in job advertisements. "This number is indeed worrying and should serve as a warning to both policymakers and business leaders," notes Joana Brito, HR solutions senior consultant at Aon Portugal.

"Most companies are still in the initial stages of adaptation, which could compromise compliance with legal deadlines and the credibility of the Portuguese market within the European Union," she argues, emphasising that "it is essential to accelerate preparation" or risk "losing competitiveness in attracting and retaining talent."

Although Portugal has until next summer to implement these rules, several experts have warned that companies can (and should) start preparing now.

When asked, the consultant offered some recommendations: implement robust job evaluation processes now, analyse pay equity, consider communication and training, review recruitment, promotion, and benefits policies to ensure objective and neutral criteria, and prepare reports.

On the other hand, the study shows that only 22% of companies have a communication strategy for pay transparency. Of these, more than half (55%) include training for team managers, and 55% have a cross-functional plan to explain the topic to all employees.

However, the majority (78%) still do not have a formal, structured communication strategy in place. "This suggests that a significant portion of companies may not yet be fully aware of the demands, or, even if they are, have not moved forward with implementation," says Joana Brito, speaking to ECO.

Another relevant fact is that only 18% of Portuguese companies report having conducted an independent pay equity analysis in the last 18 months, compared to the European average of 24%.

"This figure suggests that, in Portugal, the issue [of pay transparency] is not yet as high a priority as in other European markets. This may reflect less regulatory pressure so far, but also a lack of organizational maturity regarding pay equity," adds Joana Brito.

"As the directive's transposition approaches, this concern is expected to increase significantly," she anticipates.

The European directive, which must be transposed by the summer of next year, stipulates that employers must provide information on the starting salary or the pay range associated with the job openings in job advertisements. During interviews, they will be prohibited from questioning candidates about their pay history.

On the other hand, once in a position, workers will have the right to request information from employers on average pay levels, broken down by gender, "for categories of workers performing the same or equal work," as well as on the criteria used to determine pay and career progression, "which must be objective and gender-neutral."

In addition, there is a reporting obligation: companies with more than 250 employees will be required to report gender pay disparities registered within them annually to the competent national authority. Smaller employers will have to do so every three years.