The new law on corporate value-sharing, which came into force on December 1, 2023, makes a number of changes to existing employee savings schemes (profit-sharing, incentive schemes and savings plans) and the value-sharing bonus (Prime sur le partage de la valeur – PPV in French), while also creating new value-sharing schemes (both in companies with fewer than 50 employees and in larger companies).
Most of the schemes are either optional, or require the application of a sharing method from a list of choices, but with no obligation with respect to the level of effort required.
- New rules applicable to all companies
Payment of the value-sharing bonus (article 9)
Two (instead of one) value-sharing bonuses can now be granted for the same calendar year, provided that the total exemption ceilings are respected (€3,000 or €6,000).
A company value sharing plan (Plan de partage de valorisation de l’entreprise – PPVE in French) (articles 10 and 11)
Companies of any size can set up a company value sharing plan (PPVE) by collective agreement, aiming at granting a bonus to employees if the value of the company increases over a three-year period.
This optional scheme applies to all employees with at least one year of service at the start of the three-year period.
Advances on profit-sharing (Article 12)
The profit-sharing or incentive agreement can allow the payment of advances during the financial year on the sums due under these schemes.
These advances are paid to the beneficiary after obtaining their agreement, at intervals of no less than one quarter.
Limits of the amount paid (article 14)
The profit-sharing agreement can set a minimum salary, a maximum salary, or both, to be used as a basis for individual distribution when it is proportional to salaries.
- New rules applicable to companies with at least 50 employees
Obligation to negotiate on the exceptional increase in net profit (Article 8)
Large companies, or those belonging to an Economic and social unit (Unité économique et sociale – UES in French) employing at least 50 employees and having at least one trade union delegate, are required to negotiate on the definition and sharing of an exceptional increase in net profit.
This negotiation covers:
- The definition of an exceptional increase in net profit,
- The arrangements for sharing the value in such a case.
Except for companies that already have a profit-sharing agreement that provides for a more favourable calculation than the legal formula, and those that anticipated with profit-sharing and/or incentive agreement already factoring exceptional profits in), all companies with at least 50 employees and a trade union delegate must begin these negotiations before 30 June 2024.
- New rules for companies with fewer than 50 employees
Possibility of a less favourable participation than the statutory formula (article 4)
For a period of 5 years starting with the Act, companies with fewer than 50 employees can deviate from the statutory profit-sharing formula and provide for a calculation formula that is less favourable to employees.
Obligation to set up a value-sharing scheme (article 5)
On an experimental basis for 5 years from January 1, 2025, small and medium-sized companies must introduce a value-sharing scheme if:
- They have between 11 and 49 employees,
- They make a net profit for tax purposes of at least 1% of sales for 3 consecutive financial years (the financial years from 2022 to 2024 for implementation in 2025),
- They have no previously applicable profit-sharing scheme.
These companies must put in place a value-sharing mechanism that can take one of the following forms:
- Voluntary participation (Participation volontaire in French),
- Profit sharing (Intéressement),
- Value-sharing bonus (Prime de partage de la valeur)
- Employer’s contribution to an employee savings plan (Plan d’épargne salariale).