Legal Alert | Pay transparency: draft bill for the transposition of the European Directive

On 5 August 2026, a draft billwas published in a supplement to theofficial Labour and Employment Gazette (Boletim do Trabalho e Emprego), aimed at partially transposingDirective (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 into national law – thePay Transparency Directive(Directive), which establishes a set of measures designed to strengthen the application of the principle of equality between women and men in respect of pay for equal work or work of equal value, through pay transparency mechanisms and enforcement instruments.

The transposition draft bill (Draft Bill) is open for public consultationuntil 25 August 2026. The legislative process aimed at transposing the Directive has thus been initiated.

According to the Draft Bill, this transposition will be carried out by amending the following legislation:

• Law No. 60/2018, of August 21, which provides for measures to promote equal pay between men and women.
• Decree-Law No. 78/2026, of March 16, which approved the organizational structure of the Commission for Equality in Work and Employment (CITE).
• Code of Labour Procedure.

The Draft Bill largely follows the solutions set out in the Directive. However, there are some specific featuresof the proposed national transposition legislation that should be highlighted, which are described below.

Employers’ obligations

• Transparency during the recruitment phase

The Draft Bill provides that job applicants shall be entitled to receive, prior to the date of conclusion of the employment contract, information on the starting remuneration or the remuneration range for the position for which they are applying and the relevant provisions of the applicable collective bargaining agreement, where applicable. The Portuguese legislator has chosen not to require that this information be provided in the job advertisement or prior to the interview.

• A transparent remuneration policy ensuring equal pay

The Draft Bill provides that the employer must ensure the existence of a transparent remuneration policy agreed upon with employees’ representatives, where they exist.

This remuneration policy must be based on theassessment of job components, using objective criteria common to both men and women. To this end, the following factors must be taken into account: skills, responsibility and working conditions and, where appropriate, any other factors relevant to the position.

• Transparency of the policy on setting and increasing remuneration

The Draft Bill establishes an obligation for employers to display in suitable locations or publish on their intranet the criteria used to determine remuneration, remuneration levels and pay progression (with regard to the latter, companies with fewer than 50 employees are exempt).

• Access to information

Employers must inform their employees annually, including any temporary workers at their service, of:

• The right to request information on their individual pay level and the average pay levels, broken down by gender, for groups of employees performing the same work or work of equal value.
• The procedure for exercising that right.

If an employee requests the above information, either directly or through employee representatives or CITE, the employer must provide it within two months of receiving the written request.

• Obligation to report on pay gaps

The Portuguese proposal extends the obligation to report periodically on pay gaps to companies with fewer than 100 employees, as permitted by the Directive.

Specifically, the Draft Bill provides that this obligation will apply to companies with 50 or more employees(including temporary workers at their service), as follows:

• Companies with250 or more employees: this obligation must be met by 7 June 2027, and, thereafter, in each calendar year.
• Companies with between 150 and 249 employees: this obligation must be met by 7 June 2027, and, thereafter, every three years.
• Companies with between 50 and 149 employees: this obligation must be met by 7 June 2031, and, thereafter, every three years.

The information to be provided shall relate to thepreceding calendar year.

The Draft Bill sets out the procedure for reporting pay gaps, stipulating that, where pay differences are identified following the above-mentioned communication, the Authority for Working Conditions (ACT) shall notify the employer to provide, within 90 days, a justification or proposed measures to rectify the detected differences. The justification or corrective measures submitted by the employer will be analysed by ACT within 45 days, and any differences that the employer fails to justify shall be presumed to be discriminatory.

By the end of the first half of each calendar year, the entity responsible for the data processing shall publish, on its website, information on the gender pay gap at the national and sectoral level and by employer, relating to the preceding year.

• Joint pay assessment

In the absence of justification or the submission of corrective measures, and where an unjustified pay gap of at least 5% persists, ACT shall notify the employer to submit a joint pay assessment within 45 days, with the participation of employees’ representatives, where they exist.

The employer must,within 90 days, implement the measures set out in the joint assessment and submit a report to ACT. This report must include information on the implementation of the adopted measures and an analysis of the professional assessment and classification systems. 

Measures to protect employees

• Issuance of an opinion by CITE

CITE may issue an opinion on allegations of pay discrimination based on gender for equal work or work of equal value, at the request of the employee or a trade union representative.

If the draft opinion concludes that there is evidence of pay discrimination, the employer shall be notified to, within 30 days, justify the pay difference or set out corrective measures to be adopted within 180 days. Pay differences that the employer fails to justify will be presumed to be discriminatory. Within 60 days of the expiration of the deadline for providing justification or proposing measures, CITE shall notify the applicant and the employer of its opinion, which shall also be communicated to ACT.

• Protection against dismissal or other disciplinary sanctions

The Draft Bill provides that dismissal or other disciplinary action allegedly taken to punish a breach of labour law is presumed to be unfair where it takes place within three yearsof the filing of a complaint regarding a breach of rights relating to the principle of equal pay.

• Limitation period

The Draft Bill provides that rights relating to the principle of equal pay shall be time-barred one yearafter the day following the date on which the employment contract terminated.

• Full compensation for damages

The court may order the employer to pay full compensation for pecuniary and non-pecuniary damages, together with the corresponding default interest, resulting from the breach of a right or obligation relating to the principle of equal pay, even if no specific claim has been made. The court may also exempt the unsuccessful claimant from paying court costs, having regard to equitable considerations. 

Penalties for non-compliance

The Draft Bill provides for administrative liability for breaches of the obligations set forth in the legislation, and further stipulates that, in the event of a repeat offence or repeated breaches of the rights and obligations relating to the principle of equal pay, the following additional sanctionsmay be imposed:

• Revocation of all tax and financial incentives.
• Revocation of public benefits.
• Deprivation of financial incentives.
• Deprivation of the right to participate in auctions, concessions or public tenders for a period of up to two years.
• Mandatory training on pay transparency.

What should companies do to prepare for this new legislation?

Without prejudice to any amendments that may yet be introduced, it is currently possible to predict with reasonable certainty the legal framework with which companies will have to comply in relation to transparency and equal pay.

As Portugal is behind schedule in transposing the Directive, it is expected that the legislative process will be conducted swiftly. The legislation will probably enter into force on the first day of the month following its publication, which may not give employers enough time to prepare.

Accordingly, we recommend that companies begin their adaptation process immediately, so as to ensure that – when the national legislation comes into force – they will be in a position to comply with these new obligations, thereby avoiding legal, financial and reputational risks.

The adaptation process requires a structured approach tailored to the specific characteristics of each organisation and may include, amongst other things, the following measures:

• Conducting an audit to assess the company’s current remuneration situation.
• Mapping and evaluating the roles within the company.
• Reviewing remuneration structures.
• Adapting recruitment processes to the new transparency requirements.
• Reviewing contracts, procedures and internal policies relating to remuneration.
• Training internal teams.
• Identification of any pay disparities and assessment of whether these are justified on the basis of objective and gender-neutral criteria.
• Correcting any unjustified pay disparities.
• Adapting internal systems to ensure compliance with the new obligations.

Our Employment, Social Security and Immigration team is ready to support organisations in preparing for and adapting to the new regime on transparency and equal pay.