French Government Issues Decree Implementing Broad Pay Gap Disclosure

ESG and Diversity & Inclusion, The UK and European Union

Following the enactment of legislation last September mandating that French companies disclose and mitigate their gender pay gaps, the French government has issued Decree 2019-15, which details the methods companies must use to calculate and address the pay gap and lays out guidelines for disclosure.

The Decree requires that companies publish results no later than March 1 annually, with longer transitions for smaller companies (companies between 250 and 1,000 employees have until September 1, 2019, while those with 5-250 employees have until March 1, 2020).  Companies must calculate, but not publicly disclose, the following gender pay gap Indicators:

• The gap between average female and male pay by age group and job category;
• The difference in the rate of pay increase (excluding promotion) between women and men;
• The gap in promotion rates between women and men (if more than 250 employees);
• The percentage of employees returning from maternity leave as well as who received an increase upon their return; and
• Among the top 10 paid employees, how many were women versus men.

The Decree goes into detail regarding the calculation methods of these indicators and creates a scale ranging from 0 to 100 points, the results of which each company must publish on its website.  Companies that fail to achieve a minimum score of 75 points will have three years to implement measures to increase their score to 75.  Failing this, they will incur a penalty of 1 percent of total payroll.

The previously reported requirement for companies to install a government-provided software program on their payroll systems to monitor pay gaps has been scrapped in favor of the above index.