Since 1972, there have been numerous laws on professional equality between men and women but the gender pay gap remains a crucial issue which has not been resolved yet.
The parliament voted a new law on 5th September 2018 creating an index to be used to measure the gender pay gap in companies.
Since 1st January 2019, there has been an obligation to assess the gender pay gap in each company with at least 50 employees through the use of the index. The methodology adopted is to allocate a certain number of points based on the following criteria:
- Comparison of average remuneration men/women per position and age range
- Discrepancy in the rate of individual salary increases not corresponding to promotion
- Discrepancy in the rate of promotion
- Percentage of women having obtained a salary increase in the year of their return from maternity leave
- Number of employees whose gender is under-represented amongst the 10 highest earners in the company
If the number of points obtained is below 75 points (out of 100), the company must remedy the situation and has 3 years to do so. The employer must try to agree measures with the unions during the annual negotiation. If no agreement with the unions has been found, the employer must establish an action plan and send it to the labour authorities.
The employer’s obligation is to obtain a positive result. If the score of the company remains below 75 points after 3 years, the employer will be obliged to pay a penalty of 1% of the total wages in the company. However, if the employer can demonstrate its good faith and depending on the reasons for not succeeding, it can obtain from the Direccte (labour authorities) an additional one year to remedy.
There is also a duty of transparency through the obligation to publish the company’s results on its internet site every year. For companies of at least 1,000 employees: such obligation started on 1st March 2019, for those with between 251 and 999 employees it came into effect on 1st September 2019 and for companies with 50 to 250 employee, it will come into effect on 1st March 2020.
Some other actions are expected both in France and at the European Union level. In France, a new law is expected in 2020 regarding women’s economic empowerment through an increase of quotas in Boards of Directors and possibly in Executive Committees, as well as a law aiming at facilitating the return to work after a period of maternity leave.
At the European Union level, it is expected that the Equality Commissioner will propose measures in a “European Strategy for Gender Equality”, which will include binding measures on pay transparency, and a revival of the directive for a better gender balance in Boards of Directors.
