Today is Equal Pay Day in the US. It marks the date women need to work into 2019 to earn what men were paid in the previous year. (And, in fact, this particular date does not take into account that women of color are often paid less than white women.)
Collecting, sharing, maintaining (and possibly publishing) diversity data (of any type but including gender pay) remains a significant undertaking for employers. And the complexity compounds for multinationals.
The global trend towards requiring transparency is not slowing. Just recently, France, Spain and soon Ireland have jumped aboard.
If you have employees in France or Spain (especially if 50 or more in either country), make sure you’re ready to start reporting on your gender pay gap and addressing any significant disparity, if you haven’t done so already.
If you have employees in Ireland, you still have some time to work on closing any gap, before reporting is mandated. But if you are proud of the strides your company is making to address the gap, with employment counsel, you can consider sharing your story ahead of individual country deadlines to signal your company is ahead of the curve and thinking globally.
- In France, companies with 50 or more employees must start assessing their gender pay gap using a prescribed calculation method and publishing the score on their websites by the date indicated for their headcount:
- 1001 or more employees – from March 1, 2019
- 251 to 1000 employees – from Sept 1, 2019
- 50 to 250 employees – from March 1, 2020 (using a slightly simplified calculation met
If a company fails to reach 75 points out of 100, it will have 3 years to reach this threshold. After 3 years, a penalty of 1% of total remunerations for the prior year may be applied, or an additional grace period granted, depending on good faith efforts made by the company to comply.
Separately, companies that have at least one trade union section and in which at least one trade union delegate is appointed (i.e., companies with 50 or more employees) must initiate negotiations on “professional equality” between men and women at least once every 4 years. In the absence of a collective agreement, the company must unilaterally establish an action plan each year, setting objectives for progress in professional equality and the measures necessary to achieve them.
If a company’s gender pay gap score falls below 75 points, the negotiations on professional equality must also cover appropriate corrective measures. If agreement is not reached on such measures, the company must unilaterally establish them after consultation with the CSE (the “new” works council). Both this and the action plan should be filed with the administrative authority.
Financial penalties of 1% of total remunerations for the period of non compliance can be levied for failure to comply.
Read the full client alert (HERE) from our colleagues in France for more details of the new requirements.
- In Spain, the obligation to negotiate and implement an equality plan now applies to companies with more than 50 employees (it was previously limited to those with more than 250), though implementation is subject to a transition period depending on headcount:
- Those with 150 to 249 employees have 1 year (until March 2020)
- Those with 100 to 149 have 2 years (until March 2021)
- Those with 50 to 99 employees have 3 years (until March 2022)
The plan must be based on a prior assessment to be negotiated with the company’s workers’ representatives, which must incorporate gender based wage audits. Failure to implement an equality plan when required is a serious administrative infringement subject to significant fine.
All companies regardless of headcount must now keep a wage register organized by job category and gender, which must be accessible to workers’ representatives. Companies with more than 50 employees will need to justify disparities of more than 25% in pay between the genders. In addition, new mandatory work hours tracking has also gone into effect.
Read the client alert (HERE) from our colleagues in Spain for more details of the new requirements.
- Ireland is catching up to the pack of countries mandating gender pay gap reporting (which already includes the neighboring UK, where reporting obligations came into effect last year).
The Irish obligations are currently still being ironed out in a draft Bill making its way through the legislative process. Although the details of the requirements are yet to be finalized, companies with 250 or more employees in Ireland should consider implementing strategies to close larger gaps now, before reporting is made mandatory likely in mid-2021. Companies with 249 or fewer should be paying close attention as any requirements are likely to be applied on a rolling basis based on headcount.
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For more detailed analysis and solutions around gender pay, pay equity and diversity and inclusion, visit Baker McKenzie’s Gender Pay Gap Hub or reach out to your Baker McKenzie employment lawyer.