Pay transparency in the courts' sights

The publication of the salary transparency report, which became mandatory after the Equal Pay Law, has led to a legal dispute between companies and the Ministry of Labor (MTE).

While entities such as the National Confederation of Industry (CNI) and the National Confederation of Commerce (CNC) are entering the fray to try to take the discussion to the Federal Supreme Court (STF), business entities from Minas Gerais and São Paulo have managed to obtain injunctions against the measure.

On Wednesday (27), the Regional Federal Court of the 6th Region (TRF-6) overturned the injunction that exempted companies across the country from publishing salary transparency reports on their websites and social media. Thus, employers with more than 100 employees have until Sunday (31) to publish.

According to Flávio Roscoe, president of the Federation of Industries of the State of Minas Gerais (FIEMG), the law addresses the gender pay gap, which is important. However, this requirement to publish salary reports on each company's website and social media channels is a significant problem. Therefore, the federation intends to appeal the decision.

"Until the data was sent to the ministry, which would tabulate everything and return the results, everything was fine. But publishing salaries online not only creates internal discomfort among employees, but also exposes people to unnecessary risk, potentially violating the LGPD (General Data Protection Law)," he said.

Roscoe still questions what the benefit would be in posting all company salaries online when there are gangs that could exploit this information.

Paula Montagner, undersecretary of statistics and studies at the Ministry of Labor and Employment, refutes the argument, saying there are no problems with the LGPD because no one's personal data or monetary values ​​are disclosed, but rather percentages. "Companies participated in the discussions and were able to provide their opinions. And we don't disclose company data that could affect their competitiveness," she states.

The undersecretary says that meetings were even held with representatives of companies required to declare their data to develop a model for data disclosure. "We even had problems because most Human Resources departments don't understand the concept of occupational organization, and we use international aggregation standards," she explains. Thus, mid-level professionals are in one category, higher-level professionals in another, and operational or technical professionals in others.

Roscoe states that the companies took intense action because the ministry initially wanted to use employees' names, but the companies objected, and it was agreed that only the position would be used in the disclosure. "But, depending on the company, it's not difficult to deduce who holds a certain position and find out how much they earn. This also violates competition law, because it reveals strategic information, such as employee compensation policies," he says.

For Paula Montagner, the problem is that many companies declare their employees' occupations without paying attention to their classification. "They say women are junior professionals and men are senior professionals. But they don't explain why many women are junior professionals with 10 years of service," she says.

How is it done?
Companies are required to report their payroll data, identifying positions and salaries, on the Emprega Brasil Portal. The Ministry of Labor and Employment (MTE) tabulates the data to determine whether there are differences between men and women. Since March 21, companies have been able to view the reports by logging into the platform with a username and password to download the report.

The Ministry of Labor also announced this Thursday (28) that two pieces of information on policies to increase diversity have been added to the document. Furthermore, information on the proactivity criterion was included, as it lacked an indication of how many types of women's hiring policies companies already support. The new report is now available on the Emprega Brasil Portal.

There's no salary breakdown per person. The Brazilian Classification of Occupations (CBO) is used, and the reports provide average salaries. However, Manuela Leite, a labor lawyer at Chiode Minicucci, says the problem arises when commissioned careers are grouped with non-commissioned ones, for example, which ends up distorting the figures. "It's not clear to companies how the data was grouped or how they can correct discrepancies," she says.

And even so, companies will have to disclose the data by March 31st, as if they do not do so they may be fined and have to pay fines ranging from 3% of the payroll up to a maximum of 100 minimum wages.

"But how can I publish a report about which I have doubts? Companies didn't have enough time to understand the report before making it public, which is why so many injunctions are being obtained in court," said the lawyer.

The Federal Regional Court of the 3rd Region (TRF3) in São Paulo had already granted an injunction before the TRF6. But the Minas Gerais injunction, obtained on March 22, was considered emblematic because it was granted in a general manner, meaning it was effective for all companies nationwide. For this reason, it was the first to be overturned this Wednesday.

Fiemg told InfoMoney that it is defending society by preventing personal data from being exposed and used for inappropriate purposes. "We don't understand the point of publishing specific income data for both men and women," the organization's president stated.

Roscoe points out that income tax returns are confidential, and now income information may be disclosed. "This information will be disclosed in the report, as the company must publish it in a highly visible location," he adds.

A potential leak of MTE data has given companies even more ammunition to question the release of data online. Roscoe reaffirmed his support for equal opportunity initiatives and refuted the argument that failing to disclose the reports violates women's right to equal pay. "We defend meritocracy, yes, for both genders, and we defend equality for all, regardless of gender, race, or age. We are confident that we will ultimately prevail in all these lawsuits."

For lawyer Manuela Leite, the problem was the lack of time to discuss the matter. "In Europe, this process took years, and here, within a year, reports are already being released, without giving companies the right to defend themselves. They will then take legal action to question the way it's being done, creating a much bigger mess."

First balance
On Monday (25), the Ministries of Labor and Employment (MTE) and Women presented the 1st National Report on Salary Transparency and Remuneration Criteria.

The survey found that women earn 19.4% less than men in Brazil. The pay gap can vary even more depending on the occupational group. In executive and managerial positions, for example, the pay gap reaches 25.2%.

Companies reported compensation, wages, employee, and occupational group data to eSocial in 2022. The document summarizes the information submitted by 49,587 establishments with 100 or more employees, the majority of which (73%) have been in operation for 10 years or more. Together, they total nearly 17.7 million employees.

Black women have the most unequal incomes, according to the survey. While their average salary is R$3,040.89, that of non-Black men is R$5,718.40, 27.9% higher than the average. Compared to non-Black women, they earn 66.7% of the salary. According to the document, only 32.6% of companies have policies to encourage the hiring of women.

Article originally published on March 28, 2024, on the Infomoney website.