More and more companies are faced with sanctions due to not complying with the clarity and transparency standards in their workers’ pay slips. However, could your company be at risk? Are the current practices in your organisation sufficient for managing your pay slips? A recent judgement ruled by the Spanish National Court has once again placed a focus on the importance of pay slips complying with the regulations in force in order to avoid labour disputes and sanctions.


What must a pay slip actually contain?


Judgement 73/2024 of 18 June 2024, ruled by the Labour Division of the National Court, involved a class action filed by the General Employment Federation (CGT) against Easyjet Handling Spain. The basis of the dispute lay in the clarity of the items included in the company’s pay slips, in particular remuneration terms such as "variable holidays" and "back pay". The lawsuit claimed that the pay slips must include a detailed description of the origin, item, unitary price, value and number of units paid, alleging that the lack of clarity violated the workers’ right to understand how their wages were calculated.


This case raised a question that should be asked by all companies: Are our pay slips providing the required transparency for the employees to fully understand their wages? Spanish regulations (the provisions in Article 29.1 of the Spanish Labour Relations Act and various ministerial orders) require that pay slips must be clear and detailed so that the workers can understand their remuneration themselves.


Is it sufficient to offer additional support for queries about pay slips?


Easyjet defended this claim by alleging that its pay slip software, connected to the Spanish social security system, restricted its ability to provide the details claimed by the trade unions. The company also sustained that the workers had been provided with a support protocol to clarify any doubts they could have about their pay slips, which should be deemed sufficient. However, the National Court was clear when it ruled that this additional support did not exonerate the company from its obligation to provide clear pay slips right from the start, since the employer is responsible for guaranteeing wage transparency, not the worker.


This raised an interesting consideration: Is your company relying on alternative solutions instead of ensuring that the pay slips comply with the legal requirements right from the start? The judgement stipulated that companies must guarantee, with no exceptions or conditioning factors, that their pay slips are sufficiently understandable, even if their IT system has limitations.


What risks can your company face if it does not comply with the required clarity in its pay slips?


Companies that do not ensure transparency in their pay slips could be subject to claims being filed by their employees and possible administrative sanctions. The National Court made it clear that no technological limitation could justify infringement of the legal standards for clarity in pay slips. Therefore, all companies operating in Spain must ensure that their wages management system is adapted to the regulations and, if necessary, improvements must be made.


Conclusion: A transparency standard that is becoming more and more demanding.


The judgement reinforced companies’ commitment to transparency in labour relations and stressed that clarity in pay slips is not only a formal requirement but an essential guarantee that the workers’ rights can be effectively exercised.  


Is your company actually prepared to comply with this transparency standard? Does your pay slip system have the capacity to provide all the detailed information required by the law in force? In an environment that is becoming more and more demanding, this is a good time to review your practices and ensure that your company complies with the legal requirements. Remember: Prevention is the key factor to avoid sanctions and to ensure your labour relations are based on trust and transparency. 

 

Autor:  Alejandro Duque, socio de Derecho Laboral en RSM