Value-sharing within a company: upcoming changes

6 min read

On 10 February 2023, the national social partners concluded an interprofessional collective bargaining agreement ("ANI") on value-sharing, which has since been signed by the majority of the representative unions.

The ANI will come into force once approved by the Ministry of Labour. It introduces new duties for companies and formulates a certain number of proposals, intended to be transcribed in a "faithful and complete" manner in the draft employment act, as indicated by the Prime Minister, Mrs. Elisabeth Borne.

The aim is crystal clear - to generalize the sharing of value for all employees, in particular those employed in small companies who do not currently benefit from a company profit-sharing scheme.

The duty for companies employing between 11 and 49 employees to set up a value-sharing scheme

To date, only companies employing at least 50 people are required to set up a mandatory profit-sharing scheme ("régime de participation aux résultats de l'entreprise"). On a 5-year experimental basis, the ANI provides for the introduction of an obligation for certain companies employing between 11 and 49 people to set up a legal value-sharing scheme (i.e. either a mandatory profit-sharing scheme, a voluntary profit-sharing scheme ("intéressement"), a value-sharing bonus ("prime de partage de la valeur"), a voluntary contribution by the employer to a company savings plan, an intercompany savings plan or a retirement savings plan).

The ANI applies to companies:

  • incorporated as a corporation; 
  • with a positive net taxable profit of at least 1% of turnover for 3 consecutive years; and 
  • are not already covered by a value-sharing scheme, with the exception of the value-sharing bonus (formerly called "Macron's Bonus").

This provision is scheduled to come into force on 1 January 2025. 

In order to ease the implementation of a mandatory profit-sharing scheme, the social partners invite the lawmaker to modify the current legal framework of mandatory profit-sharing by allowing companies employing less than 50 people to conclude collective bargaining agreements providing for a derogatory calculation formula that may give a lower result than the so-called "legal" calculation formula.

The obligation for companies employing at least 50 employees to take into account their exceptional results

Companies employing at least 50 employees, that are subject to the obligation to set up a mandatory profit-sharing scheme and have at least one trade union delegate will have to include in their mandatory and voluntary profit-sharing agreements, a provision aiming to take into account the achievement of exceptional results in France. For companies already covered by a collective bargaining agreement, negotiations will have to commence by 30 June 2024 in order to insert such a provision.

Two options are available for taking exceptional results into account:

  • the automatic payment of a mandatory or voluntary profit-sharing supplement, the terms of which (calculation, timing, beneficiaries, etc.) will be defined in the collective bargaining agreement; or
  • the opening of negotiations on the payment of a value-sharing scheme (notably the payment of a value-sharing bonus).

The companies that have set up a mandatory profit-sharing scheme with a calculation formula that is more favourable for the employee than the so-called "legal" formula are not concerned by this obligation.

Proposals to develop mandatory and voluntary profit-sharing schemes

Modification of threshold crossing rules

In order to speed up the implementation of a mandatory profit-sharing agreement when a company crosses the threshold of 50 employees, the ANI suggests the lawmaker should abolish the rule allowing companies that already have a voluntary profit-sharing agreement to benefit from a 3-year deferral.

Simplification of the lump-sum social security contribution ("Forfait Social")

The ANI supports the simplification of the rules on Forfait Social, which hinders the attractiveness of employee savings plans due to the level and coexistence of several rates.

Possibility to provide for mandatory profit-sharing advance payments

The ANI calls on the lawmaker to provide for the possibility for companies to make advance payments of mandatory profit-sharing, as it currently is possible for voluntary profit-sharing schemes.

Taking ESG criteria into account in the voluntary profit-sharing agreements

The social partners request Article L. 3314-2 of the French Labour Code to be amended to provide that the formula for calculating voluntary profit-sharing may include one or more ESG criteria; and to require the supervisory bodies to publish a guide each year on their procedures for monitoring voluntary profit-sharing agreements (including, in particular, the elements taken into account to assess the random nature of ESG criteria).

Softening of the value-sharing bonus regime

The social partners invite the lawmaker to modify the legal and regulatory framework of the value-sharing bonus by: 

  • allowing it to be placed in a company savings plan and/or a retirement savings plan, if these exist;
  • allowing the granting of up to two value-sharing bonuses each year within the limit of the ‘ceiling' and the number of payments currently provided for (i.e. EUR 3,000 or EUR 6,000 depending on the case), in one to four instalments, with a maximum of one payment per quarter; and
  • maintaining, from 1 January 2024, the favourable tax and social security regime for companies employing less than 50 employees.

Desired changes in employee savings plans and employee shareholding plans

With regard to employee savings plans, the ANI is asking the lawmaker to intervene to:

  • specify that shares held in a group savings plan are treated in the same way as those held in a company savings plan for the calculation of the holding threshold for benefiting from tax consolidation;
  • simplify the procedure for revising the content of intercompany savings plans by offering the possibility of proceeding by means of an amendment between the founding companies and by simply informing the member companies;
  • introduce a new unilateral employer contribution to the company savings plan and to the retirement savings plan up to the value-sharing bonus; and
  • authorise the early release of company savings plans in the following three additional cases: (i) expenses related to energy renovation, (ii) expenses incurred as a close caregiver and (iii) acquisition of a "clean" vehicle.

Furthermore, the social partners underline that the current employee shareholding is not adapted to small and medium-sized companies, nor to non-listed mid-cap companies. However, this is an important vector for employee loyalty. 

Consequently, the social partners have made several proposals, including:

  • an increase in the overall limitations for the allocation of free shares;
  • the tax neutrality of the shares contribution to a company of employee shareholders; and
  • the creation of a new scheme, the "company value-sharing plan", which would be set up by a collective bargaining agreement. This plan would benefit all employees with at least one year's seniority who would be allocated an indicative amount. At the end of a three-year period, each employee would receive the amount corresponding to the percentage of the company's valuation applied to this indicative amount.

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