Portugal business groups warn of impact from new pay transparency law

Portuguese business federations are expressing significant concern regarding the government's plan to transpose the EU Pay Transparency Directive into national law. The legislation, expected to take effect in 2027, aims to address gender wage gaps but has drawn criticism from industry leaders who warn of increased bureaucracy and legal risks.

Key points of contention include the requirement for companies with over 50 employees to conduct annual pay-gap reporting and the implementation of a 5% statistical threshold. Under the proposed rules, firms must justify wage differences exceeding 5% within 90 days or face potential discrimination claims where the burden of proof is reversed.

The Portugal Business Confederation (CIP) and the Tourism Confederation of Portugal (CTP) argue that these mandates will create an administrative burden for the country's vast number of small and medium-sized enterprises (SMEs). Additionally, the Confederação do Comércio e Serviços de Portugal (CCP) has advocated for a more pedagogical approach, suggesting longer adaptation periods and a focus on training rather than immediate sanctions to avoid large-scale labor litigation.