Editorial: law firms should not wait for the royal decree to measure their pay gap

This is an editorial by the AGENTE LEX newsroom. It expresses the portal's opinion.

The legal profession explains to its clients every day how to comply with the rules. With pay transparency it has a chance to lead by example.

Directive (EU) 2023/970 establishes that job candidates can know the starting pay or its range, prohibits asking about pay history, obliges employers to make available to staff the criteria used to set pay and gives each worker the right to know the average levels of their category, broken down by sex. For employers with 150 or more workers, the first report on the pay gap must be submitted by 7 June 2027 at the latest. If an average difference of at least 5% appears that is unjustified and not corrected within six months, a joint assessment with workers' representatives must be carried out.

In Spain, the Ministry of Labour has published a draft royal decree to transpose the directive in part. At the date of consultation, it was still a draft. Its text provides that all companies keep a pay register with averages and medians by sex, and that those with 50 or more people report gap information to a new Commission for monitoring pay transparency. That is, medium-sized firms would also have reporting obligations, not only the large ones.

Why not wait

Because the directive already sets the destination

The Spanish text may adjust details, but the directive sets the underlying obligations and their timetable. A firm that starts now will have data from several financial years when the first report arrives and will be able to correct differences with room to spare.

Because firms have structures that are hard to explain

Grades by years of experience, variable pay by hours or billing, discretionary bonuses, support staff under other collective agreements: pay at a firm has not always been designed with someone having to explain it in mind. The directive requires the criteria used to set pay to be objective and neutral. Documenting them takes time.

Because it affects talent attraction

If candidates can know the pay range and nobody can ask them about their previous salary, the negotiation of each hire changes. Firms competing for the same profiles will soon notice. We pointed this out when analysing pay transparency at law firms.

Because it is consistent with what we advise

Firms help their clients prepare pay registers, equality plans or whistleblowing channels. Having their own processes in order gives credibility to that advice.

Where to start

1. Build the register: averages and medians by sex, on an annual and hourly basis, by category.
2. Write down the criteria for entry, progression and variable pay, and check whether they are neutral.
3. Review job offers and selection processes.
4. Prepare the reply to staff information requests, which the directive requires to be answered within two months.
5. Involve workers' representatives from the start, because they will be the counterpart if a joint assessment is needed.

A matter of trust

Firms sell trust. Pay transparency is, at bottom, a way of showing that internal decisions are also made on criteria that can be explained. Those that move early will have one more argument to attract and retain talent, and one less thing to fear when the Spanish rule is approved.

The firm's obligations as an employer also include the whistleblowing channel under Law 2/2023 and the new rules on information to the worker under Royal Decree 723/2026. More editorials in Opinion.