Profit-sharing within the company: Bill transposing the Interprofessional National Collective Agreement 2023 adopted by the National Assembly with amendments

The so-called “Value Sharing” Bill, which purports to enact the provisions of the Interprofessional National Collective Agreement signed by the main trade unions on February 10, 2023 into French law, is meant to stimulate profit-sharing in French companies without breaching the non-substitution principle, while improving employee saving and shareholding plans.

This Bill contains 15 articles divided into 4 themes: (i) strengthening social dialogue on employment classification, (ii) facilitating the widespread use of value-sharing schemes, (iii) simplifying the implementation of value-sharing schemes and (iv) developing employee shareholding.

Two of the provisions will be tested over a period of 5 years with a view to develop value-sharing in small and medium size businesses (SME):

  • Companies with less than 50 employees can implement value-sharing schemes at business or company level, which can be less favourable than the legal formula set for profit-sharing schemes. Negotiations should sart at business level by June 30, 2024. Until then, profit-sharing schemes must guarantee the same level of benefits as the legal formula;
  • By January 1, 2024, companies with 11 to 49 employees will be required to implement at least one profit-sharing scheme if they are profitable (net taxable profit of at least 1% of sales during three continuous years), which can take the form of a profit-sharing or incentive scheme, an employee savings plan or a profit-sharing bonus (PPV). This requirement is not applicable to companies which already have a profit-sharing scheme in place.

Improve the profit-sharing allocation in case of exceptional benefits:

  • Companies with at least 50 employees and having at least a union representative will be required to include exceptional profits to negotiations on profit-sharing or incentive schemes. Companies already covered by a profit-sharing or incentive agreement at the time of the publication of the law will be required to launch new negotiations by June 30, 2024, to define what constitutes an exceptional profit and how it will be shared with employees.
  • The profit-sharing bonus (PPV) may be paid twice a year within the statutory limits and still be exempted from tax and social security contributions.

Promote socially responsible savings: to that end company savings plan (PEE) and retirement savings plans (PER) will have to include a fund which allows to finance the energy and ecological transition or socially responsible investments.