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France to fine companies if gender pay gaps not erased

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A bicycle production line in Machecoul, France -- REUTERS

PARIS — French companies will have three years to erase their gender pay gaps or face possible fines under plans presented by Prime Minister Edouard Philippe on Wednesday to unions and employers.

Men are on average paid 9%more than women in France, even though the law has required equal pay for the same work for the past 45 years, the government said.

Under the plans, companies with more than 50 employees will be required to install special software hooked up directly to their payroll systems to monitor unjustified pay gaps.

The aim was to roll out the software in companies with more than 250 employees next year and in 2020 for firms with 50 to 249 workers.

If a company fails to erase a pay gap detected by the software over three years, labor inspectors could impose a fine of up to 1% of the firm’s wage bill.

“The software is not a magic wand, but it will reveal certain differences in the pay between men and women,” Philippe told journalists after meeting with unions and employers.

The government aims to iron out the details in the coming month with employers, unions and experts and include the plans in a broader labor reform package to be presented to parliament next month.

Companies will also have to be more transparent about their gender pay gaps: they will be required to publish them on their Web sites and internally unions will have access to data by job role and seniority.

The government’s plan met with concern among employers who attended Philippe’s presentation.

“The additional burden must not be counter-productive, deactivating entrepreneurs,” said Jean-Michel Pottier, vice-president of the CGPME federation of small company employers.

Union leaders who attended Philippe’s presentation were open to the government’s plan, but some also had reservations about what criteria would be used for determining whether a pay gap existed. — Reuters