What’s new regarding equal pay rules in France?

The “Professional Future” Act of September 5, 2018 reinforced obligations related to equal pay for men and women as from January 1, 2019.

As a reminder, French employers are required since 2019 to publish an index of KPI to assess whether they comply with their equal pay obligations.

Five KPI are set in this gender equality index. If a company achieves a total of less than 75 points out of 100, it will be bound to implement corrective actions within 3 years (with a possible one-year extension if they can demonstrate that they have made efforts to comply).

French employers are expected to publish their index by March 1, 2021.

Auditioned before the information parliamentary mission on economic and professional equality on February 16, 2021, the French Minister of Labor Elisabeth Borne announced developments in the area of gender pay gap regulation.

The Minister of Labor insisted that major progress had been made in terms of professional equality since the 2019 introduction of the obligation to publish such an index.

The ratings recorded by French companies with more than 1,000 employees are indeed strongly improving, only 4% scoring below 75 in 2020, against 17% in 2019.

Margins of progress have however been identified, particularly in view of two KPI that are still lagging behind, namely :

– The increase in women’s salaries upon their return from maternity leave (despite the fact that this is a legal obligation) ;

– The number of women in the 10 highest pay grades: 37% of companies still have less than 2 women in the 10 highest pay grades.

 In order to fix these, the Minister of Labor wishes to reinforce the obligation to publish the results of the index.

As from March 1, 2021, the Ministry of Labor will publish on its website the ratings recorded by companies employing between 250 and 1,000 employees (only the scores of companies with more than 1,000 employees are currently published) and companies will have to make their ratings more visible on their website. 

Similarly, companies benefiting from the Covid-19 recovery plan should publish all sub-indicators as well as their objectives of progress, even when their score is above 75.

 Before the end of S1 2021, the French Minister of Labor wishes to make it mandatory for all companies to publish the sub-indicators of the index, in order to further increase the transparency of all the companies’ raitings in terms of gender equality.

In the medium term, the French Minister of Labor also wishes to make progress on the decisive issue of balanced representation between women and men in management bodies.

Although there has been a feminization of company boards of directors and supervisory boards in recent years, several steps remain to be taken, according to the Minister of Labor. Only 3% of the 120 executive or general management positions in the 60 largest French companies are held by women, who also represent only 17% of the executive committee, while one third of the managers are women.

In order to improve gender parity in management positions, the French Minister of Labor wishes to act on career advancement, so that women’s access to management bodies is promoted. She wishes to impose binding targets on companies, which could consist in the creation of a specific indicator, outside of the gender equality index, which could nevertheless be modelled on this index, with similar objectives and publication obligations.

A consultation should soon be initiated with the French social partners to this end. 

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