In accordance with the ‘Professional Future’ law passed on September 5, 2018, French companies/subsidiaries with over 50 employees are now required to publish on their website their Gender Pay Equity Index on an annual basis. The deadline imposed by the law for the first publication of the index depends on the size of the French entities: - 1st March 2019 for entities with over 1,000 employees; - 1st September 2019 for entities with 250 to 1,000 employees; - 1st March 2020 for entities with 50 to 250 employees. The law sets out the five indicators that should be assessed to establish the index value. If the value of the index turns out to be less than 75 out of 100, the company then must implement actions to reach this threshold within a three-year timeframe. Should the threshold not be reached after three years or should the company not publish the index, then the company will incur a financial penalty of up to 1% of payroll. The French State intends to follow this very closely and is expected to review 7,000 companies in 2019. This is a wonderful opportunity to revisit your company action plan to reduce the gender pay gap. It is a call to take action to improve diversity and inclusion in organizations’ career, talent and performance management processes. The French pay equity index is a score out of 100 points defined as the total of 5 indicators: 1. The Gender Pay Gap, for identical positions and ages (up to 40 points) (0 points allocated if the gap is more than 20%); 2. The difference between the number of men and women given a pay increase during the year (up to 20 points); 3. The difference between the number of men and women promoted during the year (up to 15 points); 4. The percentage of employees given a pay rise on their return from maternity leave (up to 15 points). This catching-up pay rise has been mandatory since 2006. If only one employee did not get it over the year on return from maternity leave, then the company gets no points for this criteria; 5. The number of people from the under-represented gender (usually women) among the 10 highest earners (up to 10 points). Based on published indices to date, this last indicator is the one on which companies score the lowest. The average representation of the women in the 10 highest earners is two or three out of ten. The above indicators 2 and 3 are merged into one indicator over 35 points for French entities with less than 250 employees. Would you like to find out more?      Mercer France can help you ensure you are compliant with the gender pay equity law in France and can help you implement efficient actions to reduce your Gender Pay Gap and improve diversity and inclusion in your HR processes. Click here to get in touch.

Isabelle Hernu-Sfeir | 19 Aug 2019

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