Law firm specialising in employment law
and social security law.
Law firm specialising in employment law
and social security law.
Created in 2019, the purpose of the professional equality index is to measure the pay gap between women and men in companies with a view to encouraging them to close any pay gaps.
In general terms, the aim of this new index is to implement policies designed to promote equal pay more effectively, following the observation made in the mid-2010s that the many texts on the subject were not being applied properly, or were even still unknown to some employers.
Compulsory for companies with at least 50 employees, the index must be published by 1 March each year or face a financial penalty.
There are a number of conditions governing its calculation and publication.
Let's take a closer look at this system and its terms and conditions.
From 1 March 2019, Law n°2018-771 of 5 September 2018 on the freedom to choose one's professional future imposes new obligations on companies with 50 or more employees regarding the measurement and publication of pay gaps between women and men.
In principle, every company must ensure equal pay for equal work or work of equal value (article L. 3221-2 of the Labour Code). They must also work to eliminate any disparity in pay between the sexes (article L. 3221-5 et seq. of the Labour Code).
The professional equality index thus serves as a monitoring tool to ensure that employers comply with these legal obligations.
Companies, associations and trade unions with 50 or more employees, public industrial and commercial establishments and economic and social units (UES) with the same number of employees (even if some of the companies making up the UES have fewer employees) are subject to this requirement. (article L. 1142-8 of the French Labour Code).
However, ‘groups of companies’ are not subject to this system.
The reference period is 12 consecutive months. If there is no obligation concerning the start or end date of the reference period, for the calculation of the index, the obligation is to publish the index on 1st March of the year following the end of the 12 months mentioned above (article D. 1142-4 of the Labour Code and Annexes I and II of Decree n°2029-15 of 8 January 2019).
Companies must determine whether they meet or exceed the 50-employee threshold on the basis of the number of employees present on the date of the publication requirement. Companies with at least 50 employees on 1 March 2025 will therefore have to publish their index on the same date.
Every 1 March, employers must also check whether or not their workforce has reached 250 employees. This threshold changes the calculation obligations, increasing the number of indicators from 4 to 5.
The headcount is calculated in accordance with the rules set out in articles L. 1111-2, L. 1111-3 and L. 1251-54 of the French Labour Code, as set out in article D. 1142-8 of the same code.
In order to adapt to the new obligations, when a company reaches or exceeds the threshold of 50 employees for the first time, it has three years in which to publish its first index.
A recent company that reaches the threshold of 50 employees can only publish an index if it has data for 12 consecutive months. Otherwise, it must inform the DREETS and the CSE of the reasons why it cannot establish its indicators.
All employees are taken into account in the calculation, with the exception of apprentices, holders of professionalisation contracts, expatriates and employees on secondment (including ported employees and temporary workers).
Employees must have been with the company (whether continuously or not) for at least six months during the reference period to be taken into account in calculating the index.
Please note that there are many different types of contracts, and it is important to check which rules apply.
The salary to be taken into account is made up of:
- The basic salary
- And these benefits and accessories paid directly or indirectly in cash or in kind, bonuses, variable remuneration and bonuses if the amount depends on the employee's individual performance. (Annex I and II of Decree n°2029-15 of 8 January 2019).
These items are assessed on a gross basis and reconstituted on an annual basis.
There are some subtleties here too. Some items should be excluded from the calculation of the reference salary, such as severance pay, seniority bonuses, hardship bonuses, overtime and additional hours worked, profit-sharing payments and sums from the monetisation of the CET.
Remuneration components must be carefully checked.
The professional equality index is assessed on the basis of four or five indicators, depending on the size of the company:
- In companies with more than 250 employees, five indicators are taken into account (article D. 1142-2 of the Labour Code):
- Indicator n°1: the pay gap between women and men, calculated by age group and equivalent job category (40 points) ;
- Indicator n°2: the difference in the rate of individual increases, excluding promotions, between women and men (20 points);
- Indicator n°3: the difference in promotion rates between men and women (15 points);
- Indicator n°4: the percentage of female employees receiving a pay rise after maternity leave, if pay rises took place during their absence (15 points);
- Indicator n°5: the number of employees of the under-represented sex among the company's 10 highest earners (10 points).
- In companies with between 50 and 250 employees, the assessment is based on four indicators (article D. 1142-2-1 of the Labour Code):
- The pay gap, according to the same criteria as above (40 points) ;
- The difference in the rate of individual increases between women and men (35 points);
- The percentage of female employees receiving a pay rise after maternity leave, under the same conditions as above (15 points);
- The number of employees of the under-represented sex among the company's 10 highest earners (10 points).
Each criterion allows a certain number of points to be accumulated, in accordance with articles D. 1142-2 et seq. of the French Labour Code.
The smaller the gap between men and women, the more points the company receives. The aim is to reach 100 points.
Since March 1, 2020, companies with 50 or more employees have been required to calculate and publish their equal pay index every year, in accordance with Articles L.1142-7 et seq. and Articles D.1142-2 et seq. of the French Labor Code.
Each indicator is calculated independently, using different methods.
Indicator n°1 - Gender pay gap
This compares the pay of men and women, taking into account criteria such as age and socio-professional category. Employees are divided into categories, and within each category, into four age brackets.
A pay gap is calculated for each group and weighted according to the size of the group within the total workforce. A relevance threshold of 5% is applied to adjust the results.
Indicators n°2 and n°3 - Difference in rate of pay increase and rate of promotion
For companies with 250 or more employees, this index indicator is divided into two separate measures: one for pay rise differentials, the other for promotion differentials in a single indicator. Both indicators are calculated in the same way.
Each measure compares the proportion of women and men receiving pay rises or promotions, and if there are differences, points are awarded according to their size.
For companies with between 50 and 250 employees, things are a little different. Unlike ‘large’ companies, these companies only measure pay increase gaps, including those linked to promotion. They do not measure promotion differences separately.
Indicator n°4 - Increases on return from maternity or adoption leave
Companies should also check whether employees returning from maternity or adoption leave have received pay rises. If all the employees concerned have not received a pay rise, even though pay rises have taken place during their absence, the company will not be awarded any points. The score is 15 points if the percentage is 100%. There is no intermediate level.
Indicator n°5 - Gender representation among the ten highest paid employees
The company must identify which gender is under-represented among these 10 employees. The lowest number of women and men in this group should be used, with this number varying from 0 to 10.
The more balanced the gender distribution, the more points the company obtains:
If the number of employees taken into account is too small, some indicators may be incalculable.
For each indicator, the calculation impossibility conditions differ and must be verified at the time of calculation. (Annex I of Decree n°2029-15 of 8 January 2019).
Indicator n°1 - Pay gap
This indicator cannot be calculated if the groups selected represent less than 40% of the total number of employees.
Indicators n°2 and n°3 - Difference in rate of increase and rate of promotion
The indicators are incalculable if the groups selected represent less than 40% of the total number of employees and/or if no increase or promotion has been granted during the reference period.
Indicator n°4 - Increases on return from maternity or adoption leave
The indicator is incalculable if no return from maternity leave has taken place and/or if no individual increase has been made during the maternity leave(s).
If one or more indicators cannot be calculated, the company must still calculate the other indicators. The total number of points thus obtained is calculated out of 100 by applying the proportionality rule.
The index cannot be determined if the maximum number of points is 75, taking into account the incalculable indicators.
You need to keep a close eye on these factors. If you have any questions, please contact us!
The results of the index (overall result and indicators) must then be published in a clear and easily accessible manner on the company's website, if it has one. This information must remain available at least until the publication of the following year's results.
If the company does not have a website, it must inform its employees of the results by other appropriate means. (articles D. 1142-4 and D. 1142-5 of the Labour Code)
Any company that fails to publish its results by 1 March each year is liable to a financial penalty. The maximum penalty is 1% of the total payroll. However, at the time of the inspection, the Labour Inspectorate may give the company one month to comply with the obligation. (Questions/Answers from the Ministry of Labour, updated on 8 Jan, 2025).
If the company fails to justify the reasons for non-publication, it is again liable to a financial penalty.
If the result of the indicators in the company's index is less than 85 points, the company must define improvement targets for the indicators that have not reached the maximum score and then publish them (article D. 1142-6-1 of the Labour Code).
If the company's index score is below 75 points, the company must implement corrective measures to reduce the gender pay gap, with the aim of achieving a score of at least 75 points within three years (article D. 1142-6 of the Labour Code).
These corrective measures are defined by company collective agreement or by unilateral decision, in accordance with article L. 1142-9 of the Labour Code.
There are several possible scenarios:
In the event of non-publication, a financial penalty of up to 1% of the wage bill will also be imposed on the company. In addition, the company must send its objectives and measures to the authorities and enter them in the economic, social and environmental database (BDESE). (article D. 1142-6-2 of the Labour Code).
The indicators and the results of the index, as well as the data used to arrive at them, must be made available to the CSE via the BDESE. This must be done before the first meeting following publication of the index. (Questions/Answers from the Ministry of Labour, updated on 8 Jan, 2025).
Transmission of the index results also applies in cases where certain indicators cannot be calculated. In this case, the employer must provide the CSE with the reasons why these indicators could not be measured. (article D. 1142-4 of the Labour Code).
For example, staff representatives may be consulted about the calculation of indicator n°1 as part of the employee's classification.
At the social conference in October 2023, the government had already announced its intention to build a new index by spring 2025. A number of possible changes were mentioned, such as changing the threshold of 50 employees or removing the relevance threshold for indicator n°1.
The index is due to change soon.
A report by the French Court of Auditors on 27 January 2025 called into question the effectiveness of the professional equality index, arguing that it masked inequalities without making any real progress.
According to the report, despite an extensive legislative arsenal, the obligations imposed on employers are not always properly applied, and penalties are inadequate.
In addition, European Directive 2023/970 of the European Parliament and of the Council of 10 May 2023 aimed at strengthening the application of the principle of equal pay for men and women must be transposed by the legislator by 7 June 2025 at the latest. This directive includes the obligation to measure the median pay gap between women and men, or to assess the proportion of female and male workers in each quartile (four different pay groups).
These new obligations could be included in the calculation of the index.
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