Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure FR-2022-1/2865 – measures in France
|Country||France , applies nationwide|
|Time period||Open ended, started on 01 January 2022|
|Context||War in Ukraine|
|Type||Legislations or other statutory regulations|
Promoting the economic, labour market and social recovery
|Author||Frédéric Turlan (IRshare) and Eurofound|
|Measure added||13 September 2022 (updated 09 November 2022)|
The government has taken several measures in favour of overtime to make "extra" work pay, for instance by increasing the annual income tax exemption ceiling for overtime or reducing the cost for the employer. The annual income tax exemption ceiling for overtime and additional hours is raised from €5,000 to €7,500. In companies with 20 to 249 employees, a flat-rate deduction of employers' social security contributions will be introduced for overtime worked from 1 October 2022.
Raising the ceiling for the tax exemption of overtime
The annual income tax exemption ceiling for overtime and additional hours is raised from €5,000 to €7,500. This new ceiling, introduced on a permanent basis, applies to overtime worked from 1 January 2022.
Introduction of a favourable social contribution reduction for overtime
In companies with 20 to 249 employees, a flat-rate deduction of employers' social security contributions will be introduced for overtime worked from 1 October 2022.
In practice, the deduction will be deducted from the amount of employers' social security contributions due in respect of salary increases associated with overtime. The amount of the fixed deduction per hour of overtime is equal to €1.50. This measure complements the increase in the tax exemption ceiling for overtime hours provided for in the Amending Finance Act for 2022.
As it is a new measure, there is no date available.
Employees in standard employment
Workers in non-standard forms of employment
|Applies to all businesses||Does not apply to citizens|
Company / Companies
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Direct consultation outside a formal body||Direct consultation outside a formal body|
Social partners' role in the implementation, monitoring and assessment phase:
No detailed information. As the representative social partners participate in the management bodies of the social security branches, they are necessarily consulted, even if it is a formality as the government has already made a decision.
About all the measures adopted to increase the purchase power of workers, all the trade union organisations, and in particular the five representative trade union confederations and the organisations representing young people, denounced, in a declaration of 21 July, the legislative measures announced by the government, including the generalisation of profit sharing.
They consider 'that wages are part of the sharing of wealth' and they 'are unanimous on the fact that the priority issue must be to increase wages, pensions, minimum social benefits and student grants'. However, the trade unions denounce the fact that 'a succession of one-off measures, mainly financed by the State, cannot constitute a sufficient package to respond to the emergency'. Moreover, the trade unions and youth organisations point out that 'these exemptions and reductions in contributions are undermining our collective social protection system'.
On the employers' side, the measures presented by the government are better accepted. The criticisms are more on the modalities. The Confédération des Petites et Moyennes Entreprises / Confederation of small and medium-sized employers’ organisations (CPME) reiterated the proposal to reduce employers' charges on overtime, 'a virtuous mechanism to increase the purchasing power of the French through work without weakening the cash flow of companies already tested by the health crisis and continuing inflation'. On the subject of value sharing, the CPME expressed its concern that the payment of the Macron bonus was not immediately included in the bill. The CPME once again pleaded for profit-sharing to be individualised, in addition to the collective part.
It has to be noticed that the government has issued a « package » of measure through 2 law adopted on 16 August. Instead of creating a factsheet of the package, the national correspondent has created FS for each relevant measure. But on their side, the trade unions have published a global and common position to the whole package and not measure by measure. This is why this comment about the social partners views has the same content.
Eurofound (2022), Tax reduction of overtime pay, measure FR-2022-1/2865 (measures in France), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/FR-2022-1_2865.html
30 January 2023
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.