DECEMBER 2020

SPOTLIGHT ON
PUBLIC POLICYFRANCEACT FOR THE FREEDOM TO CHOOSE ONE’S FUTURE OCCUPATIONThe Freedom to Choose One’s Future Occupation law was enacted
on 5 September 2018, and it requires companies to ensure equal pay
for work of equal value.
A Gender Equality Index has been developed to facilitate this, andcompanies are required to use it to assess their gender pay gap.
They must also publish the assessment and take any necessary corrective measures within three years.1

France has legally guaranteed equal pay for equal work since passing the 1972 Gender Equality Act. Several other laws have been adopted since then, including a 2006 Act that obliges companies to close
the pay gap for women returning from maternity leave.2
However, the gender pay gap persists. There is a nine per cent difference for work of equal value and a 25 per cent difference over awhole career.3 The World Economic Forum’s 2020 Global Gender Pay
Gap report ranks France as number 127 in wage equality for similar
work,4 a slight improvement since 2015 when the country ranked 132.5

KEY FEATURES OF THE GENDER EQUALIT Y INDEX• Under the Act for the Freedom to Choose One’s Future Occupation, companies with more than 50 employees are required to use the Government’s Gender Equality Index toassess their gender pay gap.

• The Gender Equality Index comprises a set of standard indicators which companies use to evaluate their remuneration
and rewards system. Companies are assigned a score basedon the aggregated points, given for each of the indicators.

• The minimum required score is 75 (out of a maximum of 100).

Underperforming companies are required to devote a budget to close the pay gap or take other corrective measures.

• Within three years of publishing their score, if companies arestill short of this target (at least 75 points), they will be charged
a penalty of 1 per cent of the company’s payroll.

SPOTLIGHT ON PUBLIC POLICY • FRANCE | 1

OVERVIEW
Companies with more than 250 employees must use all five indicators in the index, while companies of 50–250 employees are expected
to use four.
Companies determine their performance by totalling the points
given for each indicator. The maximum score is 100 points, and theminimum required is 75.
The index offers four broad categories to determine comparable jobs:••••

Workers

Prior to the law, the French labour code required companies to negotiate annually with trade unions and employee representatives ongender equality (and wage inequality). The new legal obligations have
now made it compulsory for companies to take responsibility for:••••

Correcting wage inequality
Conducting internal analyses
Being transparent about a gender pay gap
Prioritizing remedial measures.

However, other industry classifications can also be used after discussions with employee representatives.

The law applies to all companies with at least 50 employees. Initially,
it was to be implemented regardless of whether they have tradeunions or representative bodies but, from January 2020, all companies with at least 11 employees must have an employee representative body, called the Social and Economic Committee. Discussions
with this body will be central to addressing any pay gaps. The Committee needs to be informed about the results of the indicators, themethodology applied and any corrective measures required.

The Gender Equality Index Indicators

The Social and Economic Committee

Employees
Technicians and supervisors
Engineers and managers.

•

Difference in average pay between women andmen in the same age group and in a comparable job (scale from 0 to 40 points)•

Difference in the rate of individual salary increases between women and men (scale from0 to 20 points for companies with more than
250 employees and from 0 to 35 points forcompanies with 50–250 employees)•

Difference in the rate of promotion between
women and men (0 to 15 points; companies
with 50–250 employees are exempt from thisindicator)•Percentage of women who have received a salary increase in the year after returning to workfrom maternity leave (0 to 15 points)•Among the top 10 highest paid employees, thenumber of employees who belong to the underrepresented gender.

Every company with at least 11 employees has had to set up
a Social and Economic Committee from 31 December 2019.
The committees replace staff representatives in companies
with at least 11 employees and, in companies with at least
50 employees, they merge the staff representatives, theworks council, and the health, safety and working conditions committee. 6 The committees’ scope and operations
are different depending on the size of the company.

CORRECTIVE MEASURES
If a company scores below 75 points, it must formulate and implement a plan, agreed with employee representatives, for corrective
measures. If there is no such agreement, the company must implement a financial plan itself to close the gaps within three years ofthe data being published.

After the law was passed in 2018, the deadline for companies withmore than 1,000 employees to measure and publish the score was
1 March 2019, while smaller companies were given additional time;
1 September 2019 for companies with more than 250 employees;
and 1 March 2020 for those with more than 50 employees.

SPOTLIGHT ON PUBLIC POLICY • FRANCE | 2

AUDITSFor those companies who score below 75 points, the deadlines toimplement a plan are 1 March 2022 (for those with more than 250
employees), and 1 March 2023 (those with more than 50 employees).
Non-compliance could mean a fine equivalent to one per cent of afirm’s annual payroll.7 However, the relevant labour and employment
authorities can grant additional time under certain situations.
A penalty can also apply if the indicators are not published or if there
is no agreement on an action plan.

IMPACTOf the major French companies that published results as of 1 March
2019, a fifth scored less than 75 and could be subject to the fine ifthey fail to improve within three years. The average score was 80.

Some reports from French companies say that the new law has
created competition between employers keen to improve their reputations and attract the best staff. 8CONCLUSION
The French Government has carried out a strong and calculated push
to close the gender pay gap. A four-layered process has been implemented, requiring around 40,000 companies9 to measure their pay

data, make this data visible, take steps to close the gap, and pay penalties for failing to take action. By using the Gender Equality Index,
employers are now legally obliged to ensure equal pay.

ENDNOTES
1. France, Ministry of Labour, The Gender Equality Index, November 2018. Available at: www.gouvernement.fr/sites/default/files/locale/piece-jointe/2019/01/11_gender_equality_index_fr.pdf

6. France, Ministry of Labour, “The Social and Economic Committee”. Available at: https://travail-emploi.gouv.fr/dialogue-social/le-comite-social-et-economique/2. Ibid.

7. France, Ministry of Labour, Act for the Freedom to Choose One’s Future Career.

3. France, Ministry of Labour, Act for the Freedom to Choose One’s Future Career: The Act in 10 Key Points.
August 2018. Available at: https://travail-emploi.gouv.fr/IMG/pdf/act_for_the_freedom_to_choose.pdf

8. WE EMPOWER G7, Closing Gender Pay Gaps to Achieve Gender Equality At Work. Women’s Empowerment
Principles. Available at: www.weps.org/resource/closing-gender-pay-gaps-achieve-gender-equality-work. Accessed online 17 December 2020.

4. World Economic Forum, Global Gender Gap Report 2020. Available at: www3.weforum.org/docs/
WEF_GGGR_2020.pdf

9. France, Ministry of Labour, The Gender Equality Index.

5. Ibid.

Funded by:weps.org@WEPrinciples

weps@unwomen.org@Empower_Women

Produced by:

In support of:

DISCLAIMER: The views expressed in this publication are those of the authors and do not necessarily represent the views of the European Union, UN Women, International Labour Organization or the United Nations
and their Member States.