France has unveiled plans to impose fines on companies that fail to close their gender pay gaps in three years, forcing companies to be more transparent about pay rates.

Under the new law companies with more than 50 employees will have to have erase their pay gaps in under three years or they could be fined up to 1% of the firm’s wage bill.

Companies with over 250 employees will next year have to install new software on their pay roll systems to detect gender pay gaps, according to French Prime Minister Edouard Philippe.

Companies with more than 50 employees will have to install the software by 2020. They will then have to publish their gender pay gaps on their websites and internally unions will have access to data by job role and seniority.

The finer details for the criteria of what constitutes pay discrimination in the workplace will be hammered out over the next month, with a final bill presented to French parliamentarians alongside a broader package of reform laws.

What was said:

After meeting with unions and employers Philippe told journalists:

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By GlobalData

The crazy thing is that it all exists in law but equality is missing in practice. Our aim is to pass from fine words to true, genuine equality.

The software is not a magic wand, but it will reveal certain differences in the pay between men and woman.

Muriel Pénicaud, the French labour minister, told the Sunday newspaper Le Journal du Dimanche in January:

This [gender pay gap] issue must become a priority in the dialogue” between unions and employers

However, the plans have been criticised by some employers.

Jean-Michel Pottier, vice president of the CGPME federation of small company employers, told Reuters:

The additional burden must not be counter-productive, deactivating entrepreneurs.

Why it matters:

The announcement came the day before International Women’s Day, which marks a call to action for accelerating gender parity around the world.

In France men’s salaries are on average 9% higher than women’s salaries. French law requires men and women to be paid the same for equal work.

French President Emmanuel Macron is visiting property investment business Gecina today and is reportedly also considering initiatives to improve gender balance when companies hire and promote staff internally.

After he was elected last year Macron made a point of fielding women in easily winnable constituencies in legislative elections, increasing the number of female MPs in France to about 40 per cent in the national assembly.

About half his government ministers are women.

Across the 28 EU member states, the average gender pay gap is 11.5%, according to Eurostat figures.

Neighbouring Belgium has a gap of just 2.5% whereas for women in Lithuania, it is 24.2%.