What's In The New French Draft Law On Pay Transparency?

Key measures and changes

New pay indicators will replace the ‘Professional Equality Index'

The current Professional Equality Index, based on five indicators, will be replaced by new remuneration indicators (seven in total, to be listed by decree) for employers with at least 50 employees. 

These indicators will have to be reported, and will be published on the Ministry of Labour's website. They may also be posted on the employer's own website, except for the indicator relating to the gender pay gap by employee category. 

A specific indicator will measure the pay gap between women and men by category corresponding to the performance of the same work or work of equal value. Employers with between 50 and 249 employees will only be required to report this indicator every three years.

A decree will define the specific remuneration elements to be taken into account for the calculation of the indicators.

Broader definition of ‘work of equal value'

The concept of work of equal value, which already exists in French law and takes into account professional knowledge, experience, responsibilities, and physical or mental strain, will be complemented. It will now also have to consider non-technical skills and working conditions. 

Categorisation of employees performing work of equal value will primarily result from a company or industry agreement; or, failing that, a unilateral decision by the employer after consulting the Social and Economic Committee.

Employer obligations based on size

For employers with 50 to 99 employees, the following obligations will apply: 

• The Social and Economic Committee (Works council) must be informed about the data used for the calculation, the calculation method and the results of each indicator.

• If the pay indicator by category reveals a pay gap greater than a certain threshold (to be set by decree), the employer will be required to implement corrective measures to reduce the gap as part of the mandatory negotiations with trade unions on professional equality or, failing this, in a unilateral action plan intended to ensure gender equality.

For employers with at least 100 employees, the obligations will be more extensive:

• The Social and Economic Committee (Works council) must be consulted (and not just informed) about the data used for the calculation, the calculation method and the results of each indicator. The opinion of the Committee will have to be reported to the labour authorities.

• Employees, the Social and Economic Committee or trade union representatives within the employer may ask for clarification and justification regarding the indicator on the gender pay gap by category. 

• If a significant gap (threshold to be set by decree) is found in relation to this indicator within at least one category, the employer may either justify the gaps by objective and non-sexist criteria and consult the Social and Economic Committee on these explanations, or decide to immediately initiate negotiations on appropriate and relevant corrective measures to remedy any unjustified gap.

• In the event of a total or partial lack of justification for at least one category, the employer must remedy this gap within six months of the first reporting by collective agreement or unilateral decision on appropriate and relevant corrective measures and report the amended indicator to the labour authorities after consulting the Social and Economic Committee.

• If, at the end of this period, the differences are neither justified nor corrected, the employer must carry out a joint assessment with employee representatives and implement additional measures, either through a company collective agreement or, failing that, through an action plan. These measures must be reported to the labour authorities and communicated within the employer. 

Information on pay structure

Employers are required to make the following information available to employees: categories, criteria for classification and promotion, and all other bases for calculating remuneration, including job evaluation methods.

Right for employees to request pay information

Employees can request in writing (directly or through employee representatives) information on their own pay level, and on the average pay by gender for their job category. The employer must respond within a set timeframe (to be defined by decree) and must remind employees annually of their right.

By way of exception, if the number of employees in this category falls below a threshold to be set by decree, the employer will not be obliged to disclose this information, and will inform the employee accordingly.

Pay transparency during recruitment

Employers may not ask a job applicant for information about their pay history from their current or previous employment relationships.

Job advertisements will have to include a range of proposed initial remuneration and relevant collective agreement provisions applicable to determining remuneration.

If there is no job advertisement, this information must be provided to the candidate in writing before or during the job interview.

Ban on pay secrecy clauses

Employment contracts can no longer include clauses that prohibit employees from disclosing their salary.

Easier burden of proof in cases of wage discrimination 

When there is a wage discrimination dispute, the employee alleging discrimination is only required to provide facts suggesting discrimination; the employer then has the burden to prove that its decision was based on objective, non-discriminatory criteria.

In the event of a breach of transparency obligations, the burden of proof will lie entirely with the employer.

In a wage discrimination dispute, the employee may compare their pay to that of (i) an employee previously hired by their employer or (ii) an employee employed by another employer, if pay rules are set by a common collective agreement (at the group or economic and social unit level).

Penalties for non-compliance

In the event of a breach of the main professional equality obligations (failure to comply with reporting and consultation obligations, incorrect or incomplete declaration, failure to negotiate or take corrective measures), administrative fines can reach 1% of the total payroll. Increased penalties will be imposed for repeat offences.

For failure to comply with other obligations under the draft law, there are fines of up to EUR 450 (per breach), with increased penalties for repeat offences.

Timeline

The bill is expected to be debated in Parliament by the end of 2026.

Assuming that the bill passes in its current form, certain measures (e.g. job offer transparency, ban on pay secrecy clauses) will apply as soon as the law comes into force.

Most other provisions will enter into force on a date to be set by decree, no later than one year after the promulgation of the law.

Provisions regarding the right to request pay information will apply from the date of entry into force of the agreement (or unilateral decision of the employer) determining the categories of employees, and no later than one year after the promulgation of the law.

For companies with fewer than 150 employees, the requirement to report the pay gap indicator by employee category may apply no later than 1 June 2030.

Takeaway for employers

To best prepare for compliance and avoid penalties, employers should:

• Monitor developments: Stay informed as the discussions on the preliminary draft bill progress.

• Ensure that they comply with their current legal obligations,  which will continue to apply, with regard to negotiating or implementing a gender equality action plan and providing employee representatives with the data required by law.

• Review and update pay structures and HR policies to ensure all criteria for pay and progression are objective and gender-neutral and that they are properly documented.

• Prepare for new reporting obligations by identifying how to collect and process pay data.

• Start working on categorising employees by reviewing the current classification levels and their relevance to the concept of work of equal value, and identifying potential gaps.

• Consider training HR and management teams  on the proposed new rules, with a particular focus on recruitment, salary disclosure, and handling requests for information.

• Audit current contracts to remove any pay secrecy clauses and ensure job advertisements include salary information.