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New Legislation | In depth: Gender equality in the workplace

Published on : 06/11/2019 06 November Nov 11 2019
Newsletter / New legislation

Doing business in France requires keeping up to speed with the quickly evolving and growing legislation. Whether it’s Labor Law, Tax, Social Security, or other, we’re here to guide you through the new rules of the game

Gender equality was declared a national worthy cause by President Macron.
 
The government initiated a plan of action to combat sexual and gender-based violence and put an end to the gender pay gap present in many companies. Legislative measures were adopted in the Act for the freedom to choose one’s future occupation (“loi Avenir”) dated September 5, 2018.
 
The flagship measure of the plan is that equal pay between women and men in companies will no longer be subject to obligations concerning just their efforts to favour equality but to a system based on the evaluation of the results in practice.
 
The law introduced an equal pay index, calculated with indicators, and then, shortly thereafter, an administrative decree of January 2019 specified the methodology of the equal pay index.
 
The index concerns:
  • companies with at least 1,000 employees, since March 1, 2019
  • companies with at least 250 employees, since September 1, 2019
  • companies with at least 50 employees, as of March 1, 2020
 
Employers have the obligation to publish each year indicators relating to the differences in remuneration between women and men and the concrete actions taken to eliminate these.
 
The application of the following indicators gives the company a score out of 100 points:
  • Gender gap in basic and variable pay / 40 points
  • Gender gap in distribution of personal pay raises / 20 points
  • Gender gap in distribution of promotions / 15 points
  • Percentage of female employees given a pay raise on returning from maternity leave / 15 points
  • Number of women and men in the top 10 highest paid employees / 10 points
 
The transparency obligation imposes that companies concerned by the index publish their score and results each year on the company’s website and the economic and social database.
 
Corrective measures must be taken if the score is below 75 points. The negotiation on professional equality will cover the appropriate and relevant measures of correction (wage catch-up plan), but in the absence of an agreement providing for such measures, the employer is required to take unilateral corrective measures.
 
Audits are possible by the Labor inspectorate and they can result in sanction for companies that have not complied with these new obligations.
 
Indeed, after a 3-year period, companies that have not closed their pay gap may be subject to a financial penalty amounting to a maximum of 1% of the total payroll.
 
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