In France, the Government is introducing a law which will require companies with more than 250 employees to report on gender pay gap statistics. Soon after, companies with 50 to 250 employees will also be required to report their gender pay gap data. Companies which fail to comply and correct pay gaps could be fined up to 1% of their payroll costs. In the UK, the first gender pay gap reports issued in April 2019 provoked substantial media attention for employers with large pay gaps.
Background
The French law “for the freedom to choose one’s professional future” was published in the official journal on 6 September 2018. Among other measures, this law imposes on companies with more than 50 employees increased obligations in the fight against the gender pay gap.
A minimum level of equal pay, which will be defined by decree, must be achieved by all these companies.
Compliance that can be progressive…
Each year, these companies will be required to publish indicators on the pay gap between women and men and the actions implemented to eliminate this pay gap. These indicators will be used to check compliance with the pay gap limits defined by decree.
If there is no compliance, the annual compulsory negotiation with union representatives on professional equality must also cover the appropriate and relevant gender pay gap correction measures and the programming of financial catch-up measures .
Companies will have three years to comply with the pay gap limits defined by decree (with a possible extension of one year if they demonstrate that they have made efforts to comply).
…but the absence of which will lead to a penalty
If they fail to achieve the result set by decree, companies may be ordered to pay a penalty of up to 1% of their payroll.
These new rules will enter into force no later than 1 January 2019 in companies with more than 250 employees and no later than 1 January 2020 in those with 50 to 250 employees.
The government intends to closely monitor the effectiveness of this new law.
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