France’s Path Toward Shrinking Gender Pay Gap Under EU Directive

In response to the EU Pay Transparency Directive, which requires employers operating in European Union member states to report on pay data, Trusaic will be evaluating the state of each country in the EU’s current gender pay gaps and the path toward compliance.?

The impetus for the EU Pay Transparency Directive was to close the 12.7 gender pay gap across the European Union. While some countries are further along in achieving pay equity, France’s gender pay gap is relatively high, at around 15% (based on 2021 data).

Stringent legislation was introduced in 2018 to strengthen equal pay measures.?

Quick Action Items for French Employers

While French employers may find it easier than those in other EU nations to adapt to gender pay data reporting, additional strategies will be required. Organizations can act now to prepare for the EU Directive:

• Provide sufficient salary range information to job candidates and ensure gender-neutral job postings. Research from Indeed found that half of all job postings in France include salary, primarily those for lower-paid jobs.?
• Implement a salary history ban.?
• Prepare to act when pay gaps exceed 5%.?
• Account for?intersectional discrimination in pay practices and consider the needs of workers with disabilities. Intersectionality is defined in EU law for the first time.

By 2026, EU employers with 250 or more employees must report on gender pay gaps. By 2031, smaller organizations (100+ employees) will have to comply. The EU Directive uses the broader term of “worker”?versus employee.

French employers are well-positioned for this transition as comprehensive annual reporting is already in place for organizations with 50 or more employees.

France is also committed to the principle of “equal pay for equal work,” which extends to temporary and part-time employees.?

Companies can leverage pay equity software solutions to expedite reviews of existing pay practices and determine causes of pay disparities.?

France Employers’ Current Reporting Requirements

France requires gender pay gap reporting under its Gender Equality Index of 2018 (Index de l’égalité professionnelle femmes-hommes).?

Public and private companies with 50 or more employees must report on four or five indicators, depending on organization size. Each indicator contributes to a final score out of 100 points. The indicators are:

• Pay gap between men and women grouped by age and job category (40 points).?
• Difference in the rate of individual pay increases between women and men, excluding promotions (20 points).
• Difference in the rate of promotions between women and men (15 points).?
• Percentage of employees benefiting from a salary raise in the year following their return from maternity leave (15 points).
• Number of employees of the underrepresented sex among the 10 highest-paid employees (10 points).

Organizations with between 50 and 250 employees are not required to evaluate the difference in promotion rates between men and women. A minimum overall score of 75 points is required.

France Gender Pay Gap Reporting: Corrective Measures

Overall score less than 85 points: The employer must set and publish targets for the progress of each indicator where the maximum score has not been reached.?

Overall score less than 75 points: Employers must include corrective measures in their posting and reporting, and for the programming of salary catch-up measures, where applicable. These employers have three years to improve their gender pay gaps.

Corrective measures and targets are to be posted on the employer’s website until a satisfactory score is achieved. Decree 2022-243 sets out the steps for employers to eliminate pay gaps and improve their score under the Gender Equality Index. Targets and corrective measures will depend on the employer’s internal compensation, hiring, promotion, and HR practices.

Companies that do not display their results clearly or fail to implement corrective measures are at risk of a financial penalty of up to 1% of annual payroll.

France’s 2021 Rixain Law also requires large organizations (1,000 or more employees) to calculate and publish differences in representation between women and men in senior level jobs. Legal quotas require a minimum of 30% of female executives or members of management bodies from March 1, 2026, increasing to 40% from March 1, 2029.?

Complying with the EU Directive

The EU Pay Transparency Directive was approved in 2023, establishing a clear framework for EU member states to apply the principle of equal pay for equal work or work of equal value.

EU member states have three years from June 7, 2023 to transpose the directive into law. Likely implementation dates are 2026, however, some countries may enact legislation earlier. The first large organizations will need to submit pay data reports by June 6, 2027.?

The EU Pay Transparency Directive establishes minimum standards. Member states may implement more stringent measures or adapt existing requirements to comply. France will provide guidance on adjustments to the current Gender Equality Index reporting requirements in due course.??

However, French employers can act now to ensure compliance by reviewing hiring processes to comply with pay transparency requirements and create equitable, explainable and competitive salary ranges.??

Other items include:

• Pay explainability: Prepare to explain how you differentiate and define performance in setting base salaries. Pay transparency legislation means workers must be given access to criteria used to define salary and pay raises.
• Analyze pay gaps: Identify the causes where pay disparities exceed 5%. If there is no objective justification, we recommend addressing any anomalies to remove those unexplained gaps. In cases of alleged pay discrimination, the burden of proof shifts to the employer.
• Intersectional pay equity audit.?Intersectionality is essential to close the gender pay gap. It recognizes that individuals can experience discrimination and inequality based on the intersection of multiple identities, such as race, gender, disabilities, age, and more.?

Trusaic is GDPR compliant and can assist any organization in any EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.