The Professional Future Act of 5 September 2018 strengthened the employer's obligations in terms of professional equality by imposing equal pay. A decree of 8 January 2019 (decree no. 2019-15), an instruction of 25 January 2019 (DGT instruction no. 2019/03) and a question-and-answer system put online on 14 February 2019 specify the system by creating a tool for calculating the pay gaps that we present to you.

Principal: All companies must ensure equal pay for men and women within the company: this is now an obligation of result

Which companies are concerned? All companies must aim to eliminate pay gaps, but only companies or ESUs (economic and social units) with at least 50 employees are subject to the obligations arising from the decree. For companies that have 50 or more employees, the law provides that they have three years to apply the provisions. 

What is it about? Each year, companies must calculate, at company or ESU level, their equal pay indicators over a period of 12 consecutive months and then publish, no later than March 1 of each year following the reference period, their results and any corrective measures taken. The employer must also publish the results on the company's website and transmit them to the employee representative bodies (IRP) via the economic and social database (BDES) and to the services of the Ministry of Labour via an electronic declaration.

Depending on the differences observed, the company acquires a certain number of points for each indicator: the smaller the differences, the greater the number of points attributed. 

Gradual implementation of the system according to the size of the company (publication date of the first results) 

  • Companies of at least 1,000 employees: 1 March 2019
  • Companies of 251 to 999 employees: 1 September 2019
  • Companies of 50 to 250 employees: 1 March 2020

What are these indicators? 

  • The gender pay gap (assessed by job category within pre-defined age groups): 40 points
  • The gap in the rate of individual salary increase does not correspond to promotions between men and women: 20 or 35 points depending on the company's size
  • The gap in the promotion rate between men and women (applicable only to companies with more than 250 employees): 15 points 
  • The percentage of female employees increased upon their return from maternity leave: 15 points
  • The number of employees of the under-represented sex among the 10 highest remunerations: 10 points   

What if the overall score is insufficient? 

Compliance with the law: any company with a score of less than 75 points has a period of three years from publication to comply with the law. 

Corrective measures must be taken:

  • in a negotiated manner as part of the obligatory negotiation on professional equality (e.g. adequate and relevant corrective measures, annual or multi-annual programming, financial measures to catch up on salary levels); or
  • by unilateral decision of the employer after consultation of the IRP, in the absence of an agreement. 

Sanctions: at the end of the three-year period granted to the defaulting company, if the results obtained remain below 75 points, the DIRECCTE (French Regional Department of Enterprise, Competition, Consumer Affairs, Labour and Employment), after hearing the employer's explanations, may either grant him a new period of up to one year, or impose on him a financial penalty of up to 1% of the total payroll for the calendar year preceding the expiry of the three-year period (this penalty is not cumulative with the financial penalty for failure to reach an agreement or an action plan on professional equality). 

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.