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Equality between men and women : companies have three years to be compliant

Published on : 07/12/2018 07 December Dec 12 2018
Newsletter / Looking Foward

As of a date that will be set out by decree, each company employing at least 50 employees will have to identify and measure gaps in salary between men and women and, if applicable, implement the necessary measures to resolve any unjustified and persistent differences.
In order to measure these gaps, a specific process based on a range of indicators and objective criteria will be set out in a decree of application as well as the minimum thresholds to be reached by companies.
 
The decree still hasn’t been issued and the process that companies will be required to apply in order to identify and measure gaps in salary between men and women is currently being finalized.
 
Following her meetings with the trade union representatives, it is rumored that Muriel Penicaud (French minister of Labor) decided to apply the 5 criteria :
 
  1. The gaps in salary between men and women;
  2. The percentage of women having received a salary increase after maternity leave;
  3. The difference between the proportion of women and of men having benefitted from a salary increase;
  4. The difference of average time between two promotions for both men and women;
  5. The number of women featuring in the company’s ten highest-paid employees.
 
Each of these criteria should be submitted to different rating systems. Although it is not yet final and is still being discussed, the Government has already identified a list of requirements that could be used to determine the amount of points that should be awarded to companies:
  • 40 points for gaps in salary (1.);
    • it should be measured for each representative sample (which would include at least 3 men or 3 women), taking into account employees’ age and socio-professional categories. In order for this criterion to apply, at least 60% of the company’s workforce will have to be amongst the representative samples (thus excluding a certain number of small and medium-sized companies). The highest score (40 points) will only be reached if the gap is lower than 5%;
  • 15 points for salary increase after a maternity leave (2.);
    • all it would take is for one woman to receive no salary increase (or an increase below the overall increases allocated to employees belonging to the same category) for companies to be denied any points;
  • 20 points for the proportion of women and of men whose salary was increased within the year (3.);
    • companies would receive 15 points if the gap between both proportions is lower than 4%, 10 points if it is between 6 and 8 % but no points if it is higher than 8 %;
  • 15 points for the average time between promotions (4.);
    • companies would be awarded 15 points if the gap between men and women is lower than 2 %, 10 points if it is between 2 and 4 %, 5 points if it is between 4 and 5 % but no points if it is higher than 5 %;
  • 10 points for women with the highest remuneration (5.);
    • granted to companies if at least 3 women are listed amongst the ten highest-paid employees.
 
Based on these criteria, companies will be awarded an overall score out of 100 points. Companies that fail to score at least 75 points in total will face penalty.
 
Should companies fail to reach the minimum thresholds fixed by the decree, they will have to address this issue in the course of the mandatory negotiation on professional equality and quality of working life (article L. 2242-1 of the French Labor code) in order to determine adequate corrective measures and, if need be, negotiate financial measures to resolve these gaps in salary. If no agreement can be reached, these measures will be determined by the employer after consultation of the economic and social committee (new article L. 1142-9).
 
Employers concerned have 3 years to comply. If, at the end of this period, the results obtained are still below the level set out by the decree, they may be subject to a financial penalty, the amount of which may reach a maximum of 1% of the total payroll.
 
Once fully operational, this whole process will be gradually implemented in companies depending on their size. The precise dates have yet to be determined by the decree but, in any case, it should not be later than :
  • January 1st 2019 for companies with more than 250 employees;
  • January 1st 2020 for companies with 50 to 250 employees.
 
In addition, companies will have to “publish every year indicators related to the salary gaps between women and men as well as the actions undertaken to suppress these gaps”, in the conditions set out by the decree (new article L. 1142-8).
 
These same indicators as well as the information on their methodology and their content must also be included by employers in the economic and social database (“BDES”) available to the staff representatives for their consultation (article L. 2312-18). Since 2016, this database already includes indicators pursuant to professional equality between men and women, including on salary gaps.
 
Loi n° 2018-771 du 5 septembre 2018 also called « loi Avenir »
 
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