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100€ inflation indemnity / State-funded salary maintenance scheme prolonged until 31/12/2022 / New quotas on women in senior management

Published on : 31/12/2021 31 December Dec 12 2021
Newsletter / New legislation

100€ inflation indemnity

In order to help French nationals and residents deal with the economic hardship resulting from high inflation over the last quarter of 2021, the government has implemented an inflation allowance, i.e. an exceptional aid of €100 for the most vulnerable, to be financed by the State. The employer is required to pay the inflation allowance to eligible staff in December 2021 or by January 2022 at the latest. 

This inflation allowance, will be paid out to individuals who received average earnings of less than €2,000 net per month, before income tax, from 1 January 2021 to 31 October 2021, i.e. an average of €2,600 gross per month for the period. The amount of the allowance is €100 regardless of the duration of the contract, or if the contract is full time or part time. It is also due to employees who are absent from work (sick leave, maternity leave, etc.). The allowance is also owed to employees who have left the company prior to the date of the allowance payment, if they were employed in October 2021.

The allowance needs to appear on a dedicated line of the pay slip under the heading "Inflation allowance - exceptional state aid”. Recipients of minimum income or social benefits and replacement income (e.g. combined employment-retirement) who are also working will receive the inflation allowance from their employer (and not from the social welfare organisation.) In order to be reimbursed, Employers will include the total amount paid in their next monthly declaration to the URSSAF (French social security authority). The allowance amount will then be deducted from the total monthly salary charges and contributions owed. 

State-funded salary maintenance scheme prolonged until 31/12/2022

In order to avoid mass layoffs and reduced salaries during the Covid pandemic, French employers who were forced to reduce employees’ working time or put them on garden leave received state subsidies to ensure that employees continued to receive at least 70% of their salaries. This temporary system was due to expire on December 31st, 2021.

It has now been extended until December 31st, 2022. Moreover, the scheme has been extended to include senior managers subject to the part-time closure of their company (i.e. not in case of reduced working hours as this category was exempt from working hour legislation). Certain measures of the scheme have also been integrated into the Labour Code so that it will be possible to have recourse to this system should other similar circumstances render it necessary in the future without having to vote another temporary law. 

New quotas on women in senior management

The Rixain bill which aims to ensure women’s financial autonomy, equal opportunity in the workplace and namely increase the percentage of women at senior management level was published on 26th December. Some measures will apply in 2022. Other measures appear less urgent but may require an important and rapid change on in succession planning and hiring practices in order to ensure compliance.

From March 2022, companies with 50 employees or more, that were already obliged to publish their “equality index score”, will now have to publish each year the detail each of the indicators relating to pay gaps used to calculate the score. A decree will soon be published to indicate the minimum level expected for each indicator. If the company’s results are below these levels, the company will have to define and publish what actions will be taken to improve their results. This information will be made public via the Ministry of Labour’s website.

In addition to the “equality index score” indicators, companies with over 1000 employees will need to publish each year the percentage of men and women who are “cadre dirigeant” (specific status under French law which usually corresponds to C-suite and D-suite executives) and members of the company’s governing bodies. The aim is to reach 30% women by 2026. Companies with low female representation at this level should begin succession planning and changes in hiring practices in order to meet this objective.

Company agreements on homeworking will also need to cover specifically the situation of pregnant employees.

From March 2023, the new indicators for companies with over 1000 employees will be made public via the Ministry of Labour’s website.

By March 2026, at least 30% of “cadre dirigeant” and members of the company’s governing bodies in companies with over 1000 employees must be women. Companies not having reached this goal will have to negotiate appropriate and relevant corrective measures during the mandatory negotiations on professional equality, or, failing that, this action plan will be set unilaterally by the company, after consultation of the CSE (Works Council). The Labour authorities will be able to make observations on the proposed measures. 

By March 2029, at least 40% of “cadre dirigeant” and members of the company’s governing bodies in companies with over 1000 employees must be women. Companies not having reached this goal will again have to negotiate on corrective measures as described above but will have to reach the objective by 2031 at the latest. Otherwise, they will be subject to a penalty of up to 1% of their total wage bill. 
 
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