Several changes are being made to existing employee savings plans, and new value sharing systems are created. Estelle Trichet, co-head of Walter France’s Social working group, comments on these measures which are part of a reinforced logic according to which employees must benefit, beyond their salary, profits made by their employer.
It was on December 1, 2023 that the majority of the measures in the law transposing the national inter-professional agreement relating to value sharing came into force.. In the event of an exceptional increase in net profit, a negotiation on the sharing of value is obligatory. Companies employing at least 50 employees and having a union representative are affected by this measure.. The law refers to negotiation within the company the task of defining what constitutes an increase in exceptional net tax profit and the terms of sharing the value with employees.. When they open a negotiation on participation or profit-sharing, companies subject to participation must now negotiate the definition of an exceptional increase in their net tax profit and the terms of sharing the value with employees when it occurs*. Companies that already have a participation or profit-sharing agreement applicable on the date of promulgation of the law, i.e. on November 29, 2023, must initiate this negotiation before June 30, 2024. On the other hand, those whose participation/incentive agreement already includes a specific clause on exceptional profits or whose participation regime is more favorable than the legal formula are exempt.. This sharing of value triggered by exceptional results can, under certain conditions, take the form of a participation or profit-sharing supplement, or the opening of new negotiations to set up a profit-sharing plan, a contribution to an employee savings plan or a value sharing bonus (PPV).
For companies with 11 to less than 49 employees
An experimental system has been set up for a period of five years, since December 1, 2023, to promote value sharing in small businesses. This concerns companies with between 11 and 49 employees which are not required to implement participation. If these companies achieve for three successive financial years a net tax profit corresponding to 1% of turnover, they must, for the following financial year :
– or set up a participation system (agreement concluded at branch or company level) ;
– or set up a profit-sharing plan ;
– either contribute to an employee savings plan ;
– either pay a value sharing bonus. The obligation to implement one of these systems will be applicable for financial years beginning on or after January 1, 2025., taking into account the net tax profit of the three previous financial years, i.e. 2022, 2023 and 2024 for a financial year corresponding to the calendar year. As part of this experimental device, these companies have the possibility of concluding, since December 1, 2023, a participation agreement whose calculation formula is less favorable than the legal formula.
The social and solidarity economy concerned with the sharing of value
otherwise, as an experiment, an extended branch agreement could make the establishment of a value sharing system compulsory for structures with more than 11 employees which fall within the social and solidarity economy sector and which do not generate net tax profit. In this situation, excess income at least equal to 1% of revenue will be taken into account, for three consecutive years, so that the structure sets up a profit-sharing system, contributes to an employee savings plan or pays a value sharing bonus.
Optional negotiation of a plan to share the valuation of the company
All companies without workforce requirements have the possibility of setting up, by agreement, an additional device : a plan to share the valuation of the company (PPVE) covering three years and giving rise to the payment of a bonus to employees if the value of the company increases. This premium is exempt from all contributions of legal and conventional origin., social package, of participation-construction, contributions for professional training. In the event of total or partial allocation of the premium to an employee savings plan or a company PER, the blocked amounts are exempt from income tax up to the limit, per year and per beneficiary, 5% of the maximum amount of the premium, or 3,75% you Pass (annual social security ceiling). In the event of immediate payment to the employee, the PPVE premium is subject to income tax. The implementation of the system is subject to the publication of a decree specifying the terms of application of the PPVE.
* Labor code art. L 3346-1
MODIFIED EXISTING SCHEMES
Participation mechanisms, of interest, savings and employee shareholding plans are modified and certain practices are secured.
For participation and interest
• Possibility of paying advances on the bonus at a frequency which cannot be less than the quarter and with the agreement of the employee. So far, both the administration and the case law admitted that a profit-sharing agreement could provide for advances, including monthly. Advances are therefore now permitted in both systems, but monthly advances are no longer accepted.
• Tightening of the seniority condition for temporary workers : the article of the Labor Code which applies to various employee savings schemes provides that, to benefit from it, a condition of seniority of at most three months in the company or group may be required. A temporary employee is deemed to have three months of seniority in the company or group which employs him if he has been made available to user companies for a total period of at least 60 days during the last financial year.. These provisions are supplemented : an extended agreement from the professional branch of temporary work may provide for, by way of derogation from these legal provisions, a different length of service for temporary employees, within 90 days.
For interest
• Securing profit-sharing agreements which already provide for a distribution proportional to salaries. It is now possible to have a distribution favoring the lowest salaries : the agreement can set a minimum wage, a salary ceiling or both, serving as a basis for individual distribution in the case of a distribution proportional to wages.
For participation
• Implementation of the principle of non-substitution of salary. The sums brought to the special participation reserve during a financial year cannot replace any of the elements of remuneration (within the meaning of the social security contribution base) which are in force in the company or which become obligatory in application of legal provisions or contractual clauses.
• The sums paid for participation in results are excluded from the contribution base not only for salaried and similar workers, but also self-employed non-agricultural workers, and agricultural workers.
• Implementation can no longer be delayed in the event of a pre-existing profit-sharing agreement. The Labor Code provided that, when a company employs at least 50 employees, but that she concluded a profit-sharing agreement, the obligation to implement participation only applies to the third financial year closed after crossing the threshold, provided that the profit-sharing agreement is applied without interruption during this period. As provided for in the national interprofessional agreement, the law repeals these provisions which delayed in this situation the implementation of participation in results. However, companies that already benefit from this deferral retain the benefit until the planned end.
• The obligation to recalculate the amount of the special participation reserve when the declaration of results is corrected by the administration or by the tax judge is now legalized (until then it was the subject of a regulatory article).
SOLIDARITY AND THE ENERGY TRANSITION WILL BENEFIT FROM EMPLOYEE SAVINGS
From July 1, 2024, the regulations of employee savings and company retirement savings plans must provide for the possibility of allocating part of the sums collected to the acquisition of shares in a solidarity fund. The regulations for these plans must also propose the acquisition of shares in at least one labeled fund or a feeder fund., a fund labeled as financing the energy and ecological transition or socially responsible investment. A decree will specify the list of labels, their criteria and delivery methods.
REVIEW OF CERTAIN INTER-COMPANY SAVINGS PLANS SIMPLIFIED
The review of certain inter-company savings plans (PEI) is simplified : if the modification concerns the addition of new possibilities for allocating the sums collected, it applies as soon as member companies are informed, therefore without right of opposition ; in other cases, the application of a modification is subject to the absence of opposition within one month and it is no longer postponed to the financial year following the date of information.
RELAXED FREE SHARES ALLOCATIONS
Global and individual ceilings limiting free share allocations (BUT) are relaxed. The text relaxes the conditions for implementing AGMs by raising the individual and overall distribution limits and expanding the cases of allocation to corporate officers..
