The French Gender Pay Equality Index: 3 Years On

March 1, 2023 will mark the third year of the general obligation to publish the gender pay equality index in France. As of this date, all companies that have not reached the objective of 75 points out of 100 at the gender pay equality index could be held liable to a financial penalty of up to 1% of the payroll. As such, it is time to make a first assessment of the situation and to consider the next steps for companies that have not succeeded in making the necessary corrections.

ASSESSMENT OF THE LAST FEW YEARS

The results of the 2022 edition of the gender pay equality index show that companies have continued to progress in their awareness of the existence of professional inequalities and the corrections made.

Overall average score:

Percentage of companies with more than 50 employees:

Percentage of companies with more than 1000 employees:

Indicators up from 2021:

• Return from maternity leave (+ 1 point)
• Parity in the top 10 salaries (+ 1 point)

Proportion of companies with a score of 100 points in 2022: 2%.

Number of companies with a score below 75 points for the last 3 or 4 years: 156

NEXT STEPS FOR COMPANIES WITH A SCORE BELOW 75 POINTS FOR 3 OR MORE YEARS

As a reminder, a company whose gender pay equality index result was below 75 points out of 100 had to implement corrective measures to reach at least the 75-point limit within three years. These measures, which may be annual or multi-year, were to be defined as part of the mandatory negotiations on professional equality, or in the absence of an agreement, by a unilateral decision of the employer and after consultation with employee representatives.

Once the three-year period expired, companies incurred a penalty of up to 1% of their payroll for the following:

• Not having taken corrective measures, negotiated an agreement, or established an action plan
• Not having reached 75 points

Procedure for Establishing a Lack of Compliance

The labor inspector that notices, for the third consecutive year, that a company has a score below 75 points, draws up a report addressed to the Regional Office of Economy, Employment, Labour, and Solidarity— Direction régionale de l’économie, de l’emploi, du travail et des solidarités (DREETS).

The DREETS shall inform the employer, within a maximum period of two months following the date of receipt of the report, that it is considering imposing a sanction on the employer. The latter may then, within a period of one month, share its observations and justifications.

DREETS' Decision

The DREETS must render its decision within two months of the expiry of the period given to the employer to present its observations and justifications.

The DREETS may then grant, after a factual and concrete analysis, on a case-by-case basis (existence of economic difficulties, restructuring or mergers, collective proceedings in particular), an additional period of up to one year or impose a financial penalty.

The DREETS sets the rate of penalty it intends to impose. The penalty may be up to 1% of the payroll for the calendar year preceding the expiration of the three-year period. The proceeds of the penalty are paid into the Fonds de solidarité vieillesse (Old Age Solidarity Fund).