Portugal Publishes Draft Pay Transparency Legislation

BLOG OVERVIEW: Portugal published draft pay transparency legislation on August 5, 2026, partially transposing EU Directive 2023/970 by amending the country’s 2018 equal pay statute and labor procedure code. The draft sets a 50-worker pay gap reporting threshold, below the Directive’s 100-worker floor, with triennial reporting for employers of 50 to 149 workers starting June 7, 2031. It compresses the Directive’s six-month remediation window to 45 days for a joint pay assessment, bars pay history questions, requires pay policies agreed with workers’ representatives, and leaves worker category construction to each employer. 

On August 5, 2026, Portugal published draft pay transparency legislation that would amend its 2018 equal pay statute and the labor procedure code to comply with the European Union Pay Transparency Directive (the Directive). The draft itself is characterized as a partial transposition and does not appear to comprehensively address public-employment relationships governed by Portugal’s public-employment regime, while leaving other Directive requirements unaddressed. The draft legislation was open for public comment through August 25, 2026.

Reporting Thresholds and Timelines

A notable provision from the draft legislation (Article 4.º-C(1)) would require companies with as few as 50 workers to report pay gap information, below the Directive’s 100-worker minimum. Temporary-agency workers would count toward that threshold. (Portugal already has a company-level pay-gap mechanism under its 2018 equal-pay law. The first reports were made available in 2020 using data from an annual workforce-and-pay filing submitted by employers.) Triennial reporting for companies with 50 to 149 workers would begin on June 7, 2031, with larger employers following the timetable laid out by the Directive (i.e., employers with 250 or more workers would report annually and those with 150 to 249 triennially, both beginning June 7, 2027).

Worker Categories, Right to Information, and Pay Transparency

The draft legislation, however, does not specify a particular national categorization scheme or framework for grouping workers into worker categories for reporting or right to information requests. Instead, each employer would be responsible for forming its own groups of workers using non-arbitrary, objective, common, sex-neutral criteria. Curiously, Article 4.º(2)’s express list of job-evaluation factors includes skills, responsibility, and working conditions, but not effort, even though the draft expressly includes physical and mental effort elsewhere in its definition of work of equal value.

Moreover, when it comes to pay gap reporting, the national inspectorate in Portugal can require an employer to justify detected average worker-category pay gaps or present corrective measures within 90 days; the draft does not specify a minimum gap size that would trigger this process. If the employer neither justifies the difference nor presents corrective measures during that process, and an unjustified gender difference of at least 5% remains, the employer would have only 45 days to produce a joint pay assessment with workers’ representatives and 90 days to implement the resulting measures. By comparison, the Directive allows six months to remedy a gap before a joint pay assessment is required.

In regard to right to information requests, employers would have two months to respond to workers, which is consistent with the Directive. However, this draft legislation would also cover temporary-agency workers in Portugal, and requests from workers may be submitted through workers’ representatives or the equality body.

The draft legislation includes, as the Directive requires, a ban on asking applicants about their pay history in current or previous employment relationships. The prohibition addresses the question only; the draft does not address whether employers may rely on volunteered pay information, nor whether the ban extends to third-party recruitment agencies or search firms.

Reactions to the Draft

Two provisions within the draft legislation have already drawn scrutiny. First, the draft indicates that applicants for employment are entitled to receive pay information about the job in question prior to signing a contract, and it does not require pay to be published in job postings. A petition before the Portuguese Parliament seeks mandatory pay ranges in job postings (or communicated prior to first interviews), arguing this falls short of the Directive’s requirement to provide this information “… in a published job vacancy notice, prior to the job interview or otherwise” (Article 5(1)).

Second, commentators have questioned a separate provision that would require an employer’s pay policy to be agreed upon with workers’ representatives. The Directive requires agreement on the criteria used to assess the value of work (Article 4(4)); the draft appears to extend that agreement requirement to the pay policy as a whole. Portugal’s employer confederations have solicited member input on the draft, with submissions due before the comment period closes.

Enforcement and Penalties

Finally, the draft legislation maps certain violations of the new obligations to Portugal’s existing three-tiered administrative offense structure, with penalties scaling by severity. For repeated violations of equal-pay rights and obligations, the draft would also permit additional sanctions: employers could lose tax and financial incentives, have public benefits revoked, be debarred from public tenders and concessions for up to two years, and be required to attend compulsory pay transparency training. Fines are determined by the tier (i.e., severity), employer turnover, and degree of fault.

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DCI Consulting helps employers turn complex EU Pay Transparency requirements into clear, defensible pay decisions before reporting becomes mandatory. We provide software and consulting solutions to organizations to establish or review worker categories, conduct required gender pay gap analyses, develop targeted remediation strategies, assess pay transparency compliance, and provide guidance on right to information requests. Visit our EU Pay Transparency Directive page to learn how your organization can prepare to confidently meet upcoming deadlines and subsequent reporting requirements.