This year, France is making notable progress towards salary equality, with a median salary increase budget of 3.5% anticipated by 1,000 companies. A key focus is on catch-up raises aimed at addressing gender pay disparities, influenced by the upcoming European directive on salary transparency. By 2026, employers will be required to disclose salaries, helping female employees identify wage gaps. Currently, a 1.7% salary gap exists between men and women, with varying discrepancies across sectors.
Progress Towards Salary Equality in France
This year marks a significant stride towards achieving pay equity in France. According to a study conducted by the consulting firm WTW, 1,000 companies across vital sectors—including sales, energy, finance, industry, technology, media, and pharmaceuticals—are anticipating a median salary increase budget of 3.5%. This allocation is categorized into three distinct types: individual raises to reward performance, collective raises often linked to company agreements, and catch-up raises designed to rectify unjustified salary disparities, particularly between genders.
Catch-Up Raises and Their Impact on Female Employees
The third category, catch-up raises, could be transformative for female workers in France by 2025. Khalil Ait-Mouloud, director of compensation survey activities at WTW, points out that employers are embracing a catch-up strategy in response to the transposition of the European directive on salary transparency. Essentially, companies are proactively adjusting salaries to avoid legal repercussions or financial penalties. Laurent Tylski, co-founder of Acteo consulting, emphasizes that procrastinating until 2026 to comply with the directive could lead to overwhelming budget challenges for companies, especially if they need to address all salary disparities at once.
The European directive, set to be implemented in France by June 2026, aims to bolster the enforcement of equal pay principles between men and women for the same or comparable work through enhanced salary transparency. Within the next year and a half, employers will be mandated to disclose salaries in job advertisements and regularly communicate employee salary information internally. This initiative will empower female workers to better identify and address salary discrepancies with their male counterparts. Interestingly, many employers view the prospect of increasing female salaries positively, as it enhances their employer brand and aids in attracting top talent.
Currently, there exists a 1.7% salary gap between men and women in equivalent roles. While precise figures on the budget dedicated exclusively to women’s salary increases are elusive, estimates suggest that the portion allocated to remedying these unjustified gaps may range from 0.5% to 1%. This differentiated approach is crucial in addressing the average salary gap of 1.7% that persists between male and female employees in similar positions.
To illustrate, consider a scenario where an employer has a total salary increase budget of 3.5% distributed as follows: 2% for individual raises, 1% for collective raises, and 0.5% for addressing unjustified gaps. If Quentin and Sarah, who hold equivalent positions, earn 50,000 euros and 49,150 euros respectively, the existing gap of 1.7% will be addressed through these raises. Quentin’s total salary increase would be 1,500 euros, while Sarah would see an increase of 1,475 euros. To further correct the disparity, the employer allocates the catch-up budget (0.5%) exclusively to Sarah, allowing her to receive an additional 850 euros. Consequently, Sarah’s total raise amounts to 4.73%, compared to Quentin’s 3% increase.
When examining different sectors, the average salary gap of 1.7% reveals significant variations. Some industries, such as technology, showcase smaller discrepancies with only a 1.3% difference. In stark contrast, the real estate sector exhibits a troubling trend where men earn on average 3.3% more than their female counterparts in identical roles. For a woman earning 45,000 euros annually, this gap translates to a loss of 1,685 euros. It is in these sectors with more pronounced gaps that the most substantial catch-up budgets are anticipated, according to Khalil Ait-Mouloud.