France : adoption of purchasing power measures for employees

Meeting in extraordinary session, a majority of the elected/re-elected members of the country’s National Assembly following President Macron recent loss of his absolute parliamentary power in June, passed the ‘emergency purchasing power’ bill, which includes several measures to offset the effects of inflation (5.8% in June compared to 2021). As promised by the President during his electoral campaign (c.f. article No.12977), the so-called Macron bonus, which has been exempt from social security contributions and taxes up to a ceiling €1,000 since 2019, will see that ceiling rise to €3,000 per employee per year. The exemption ceiling for this ‘value-sharing’ bonus’ will even stretch as high as €6,000 for companies with fewer than 50 employees or if they have a profit-sharing agreement. In 2021, 3.3 million private sector employees (from a total of 27.6 million) received this bonus payment, the average value of which was €572. The emergency purchasing power bill that was adopted via a fast track procedure in its first reading at six in the morning on 21 July includes an article that now allows profit-sharing and incentive agreements to be concluded by a simple unilateral employer decision for a period of five years (as opposed to the current maximum of three). The Minister of Labour will also be able to merge activity sectors for which the relevant collective agreement sets a minimum wage that is lower than the legal minimum wage operating in another sector (c.f. article No.12831 in FR). Finally, the Assembly has adopted an amendment to the rectifying finance bill, which raises the exemption ceiling for the sustainable mobility package from €600 to €800 euros per year/per employee. Both bills still need to be examined by the Senate upper house (dominated by the conservative Les Republicains) and voted in accordance with the law by both chambers before it comes into force.