Forty-five years after the law “for professional equality,” the wage gap between women and men persists. In order to overcome this, the law “for the freedom to choose one’s professional future” imposes new measures on companies. The French law “for the freedom to choose one’s professional future” was definitively adopted on 1 August 2018 by the French Parliament and approved on 4 September by the Constitutional Council (Decision No. 2018-769 DC of 4 September 2018); it was published in the Journal Officiel on 6 September 2018.
The overriding principle is that all employers must have as an objective the removal of the pay gap between women and men (new article L. 1142-7 of the Labor Code). Further, while there is no penalty for non-compliance with this principle in itself, certain provisions of the law are mandatory and subject to sanctions if not respected.
Of particular note are provisions that apply to companies with at least 50 employees:
- The employer must annually publish indicators relating to pay gaps and the actions implemented to remove them (the terms and methodology of this annual publication will be defined by decree) (new Article L. 1142-8 of the Labor Code). In the absence of publication, a financial penalty may be applied under conditions determined by decree (yet to be published).
- If the results obtained by the company are below the indicators defined by the decree, catching-up financial measures must be considered (Article L. 2242-1 of the Labor Code). If no agreement is reached, these measures will be determined by the employer following consultation with the CSE (Comité social et économique) (Social and Economic Committee). In the absence of measures, a financial penalty may be applied under conditions determined by decree.
- Following the publication of the decree instituting the indicators, companies will have 3 years to comply with the equal pay requirement. At the end of these three years, if the company still achieves results below the level set by the decree, it will be subject to a financial penalty. The application of this penalty cannot be combined with that of Article L. 2248-8 of the Labor Code, sanctioning the absence of an agreement on professional equality between women and men (new Article L. 1142-10 of the Labor Code).
Companies will have to dedicate budgetary funding to increasing wage levels to remove the pay gap and a check will be carried out with penalties if the thresholds are not met at the end of the three years period.Part-time employees, who are predominantly women, will have the same training rights as full-time employees (new Article L. 6321-6 of the Labor Code). Moreover, these provisions will come into force on a date fixed by decree that is yet to be published but in any event no later than 1 January 2019 for companies with more than 250 employees and no later than 1 January 2020 for companies with 50 to 250 employees.