France: Recent and Upcoming Labour Reforms

Several important employment law reforms have come into force recently or will come into force shortly, both at the EU and French level. Below are some of the changes to expect for 2019:

At the French level:

• As a reminder, under the Macron Reforms of 22 September 2017, all companies with more than 11 employees must put into place a CSE before 31 December 2019;
• The merger of the complementary pension plans for executive and non-executive level employees (AGIRC/ARRCO) came into effect on 1 January 2019;
• Law n° 2017-1775 of 28 December 2017 and Law n°2018-1317 of 28 December 2018, implementing a new deduction at source system with respect to income tax. The deduction at source system came into force last 1 January 2019;
• Law n° 2018-493 of 20 June 2018 modifying Law n° 78-17 of 6 January 1978 and aligning French law with Regulation (EU) 2016-679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data ("GDPR"). This updates French domestic laws in line with GDPR;
• Law n°2018-1203 of 22 December 2018 and Law n°2018-1213 of 24 December 2018, putting in place an exoneration system for parts of retirement contributions and income tax capped at €5,000 per year on overtime hours from 1 January 2019. To benefit from the exoneration, the remuneration of overtime hours must not be a substitute for other elements of remuneration, unless they have been suppressed for at least 12 months;
• Law n°2018-771 of 5 september 2018 ("loi pour la liberté de choisir son avenir professionnel") with respect to continuing professional development, setting up the creation of a new single contribution for employers to finance professional development/training automatically collected by French Administration, the opening the benefit of the "compte personnel de formation" to all employees whether full-time or part-time employees, directly credited in euros and not in hours of professional training;
•  Decree n° 2019-15 of 8 January 2019 with respect to the enforcement of the provisions aiming at eliminating the remuneration gap between men and women at the workplace and tackling sexual violence and sexist behaviour at work.

Each year, companies with more than 50 employees will have until 1 March at the latest to publish their results with respect to equal pay. Based on 5 indicators, companies will have to evaluate the Gender Pay Gap ("GPG"). Companies have 3 years put into place measures to address the evaluated GPG if their results are insufficient. Failing this, companies can be subject to a fine up to 1% of their total payroll.

Interim provisions have been put in place for the first round of publication of results by companies. Depending on their size, companies must publish their results for the first time at the latest on:

• • 1 March 2019 if they have more than 1,000 employees;
  • 1 September 2019 if they have between 251 and 999 employees;
  • 1 March 2020 if they have between 50 to 250 employees.

With respect to harassment, Companies with at least 250 employees are required to nominate a referee to guide, inform and support employees in the event of sexual harassment and sexist behaviour.

• Regulation n°2019-76 of 6 February 2019 with respect to the entry, stay, social rights and professional activity of non-EU employees based in France in the event of a no-deal concerning the departure of the United Kingdom from the EU.

At the European level:

• Adoption of Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Directive "MLD5");
• Adoption of Directive (EU) 2018/957 of the European Parliament and of the Council of 28 June 2018 amending Directive 96/71/EC concerning the posting of workers in the context of the provision of services;
• On 21 June 2018, the Employment, Social Policy, Health and Consumer Affairs Council agreed its negotiating position with the EU Parliament on draft amending regulations with respect to:

• • the rules on coordination of social security systems;
  • work-life balance for parents and career

The Council Presidency will start negotiations with the EU Parliament once the latter has adopted its position.

• On 14 January 2019, an agreement was reached between the EU Parliament and the Council on the proposal of the European Commission with respect to the creation of a European Labour Authority of 13 March 2018, in order to strengthen cooperation between labour market authorities at all levels and better manage cross-border situations, as well as further initiatives in support of fair mobility, such as a European Social Security Number/s.