Background information

Definitively adopted by the Parliament on 3 August 2022, the law 'on emergency measures to protect purchasing power' Law number 2022-1158 of 16 August 2022 is part of the 'purchasing power package' planned by the government to fight inflation. It provides for several measures, including a simplification of the profit-sharing scheme to cover more employees. The government wanted to make these schemes more widespread, in particular by facilitating the conditions for concluding agreements or renewing them.

Content of measure

Profit-sharing (intéressement) is an employee savings scheme linked to the company's results or performance. It allows bonuses to employees to build up savings while benefiting from advantages in terms of social security contribution reductions and income tax exemption, or to receive the bonus directly at the time of payment without benefiting from these advantages. The government wanted to make this system more widespread, in particular by facilitating the conditions for concluding agreements or renewing them.

Duration and extension of profit-sharing agreements

The profit-sharing scheme can now be set up for a maximum of five years (previously three). Furthermore, a profit-sharing agreement that has not been renegotiated may, as before, be tacitly renewed. The law allows this renewal to be carried out "several times".

Implementation in companies with less than 50 employees

In the absence of a branch agreement approved by the Ministry of Labour, companies with less than 50 employees (and not more than 11 employees) may set up (and renew) profit-sharing by unilateral decision of the employer if they do not have a trade union delegate and a works council (CSE) or if they have at least one trade union delegate or a CSE and the parties have failed to negotiate an agreement.

Simplification

For agreements submitted from 1 January 2023 onwards, a dematerialised procedure for drafting profit-sharing agreements will be put in place to enable any company to check their compliance with the legal provisions. The law of 16 August abolishes the prior control of legality exercised by the services of the Ministry of Labour and accelerates the implementation of agreements concluded at branch level.

Use of measure

As this is a new measure, there is no data available yet. However, data exist for the previous legal framework. According to the DARES (2022, see source box), 34% of the employees of the private sector were covered by a profit-sharing scheme in 2020, mostly in large companies (54% of the employees in companies with 500 to 999 employees and 69% in companies with 1,000 and more employees). In companies with less than 50 employees, the rate is between 4.9% (1-9 employees) and 12.1% (10-49 employees). About 4.4 million employees received a bonus in 2020 for an average amount of €1,850).

According to a study by the CAE (July 2023), value-sharing schemes for employees in France are more effective for their beneficiaries and less costly for public finances if they do not replace wages. A "strong substitution" of schemes such as profit-sharing, incentive schemes or the value-sharing bonus for wages implies that these mechanisms "benefit employees less, since they lose in wages part of what they gain in profit-sharing", explains the CAE. Unlike profit-sharing, other mechanisms such as incentive schemes and value-sharing bonuses "seem to lead to significant substitution effects" with wages. This is a form of zero-sum game that leads to wage moderation and "no significant increase in employees' total remuneration". What's more, this substitution between wages and value-sharing schemes has a significant cost for public finances, since these mechanisms benefit from tax advantages. To "guarantee" the principle of non-substitution between wages and alternative schemes, the study recommends a calculation formula that is "simple, transparent and directly linked to the company's profitability".

Target groups

Workers	Businesses	Citizens
Employees in standard employment Workers in non-standard forms of employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
Trade unions Company / Companies	Employer National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Consulted
Form	Not applicable	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Company level

Involvement

Measures included in the "purchase power package" prepared by the government where first discussed with the employers' organisation during a meeting at the Ministry of Finance, without inviting the trade unions. It seems that consultation have been hold with employers' organisation, but not with trade unions.

Views and reactions

As for the reinforcement of the "Macron bonus", 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 (CPME, Confederation of Small and Medium-sized Enterprises) 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.

Sources

• 28 April 2022: Participation, intéressement et épargne salariale en 2020 (dares.travail-emploi.gouv.fr)
• 06 July 2022: Discours de politique générale de la Première ministre Elisabeth Borne : réaction de la CPME (www.cpme.fr)
• 21 July 2022: La préservation du pouvoir d’achat nécessite un meilleur partage de la richesse (www.cgt.fr)
• 16 August 2022: Loi n° 2022-1158 du 16 août 2022 portant mesures d'urgence pour la protection du pouvoir d'achat (www.legifrance.gouv.fr)
• 26 December 2022: Décret n° 2022-1651 du 26 décembre 2022 portant application des dispositions relatives à l'épargne salariale de la loi n° 2022-1158 du 16 août 2022 portant mesures d'urgence pour la protection du pouvoir d'achat (www.legifrance.gouv.fr)
• 04 January 2023: L'intéressement (travail-emploi.gouv.fr)
• 18 July 2023: Conseil d'analyse économique (2023), Que faut-il attendre des mécanismes de partage de la valeur ? (www.cae-eco.fr)
• 30 November 2023: LOI n° 2023-1107 du 29 novembre 2023 portant transposition de l'accord national interprofessionnel relatif au partage de la valeur au sein de l'entreprise (www.legifrance.gouv.fr)
• 30 June 2024: Décret n° 2024-644 du 29 juin 2024 portant application des articles 9, 10, 12 et 18 de la loi n° 2023-1107 du 29 novembre 2023 portant transposition de l'accord national interprofessionnel relatif au partage de la valeur au sein de l'entreprise (www.legifrance.gouv.fr)
• 06 July 2024: Décret n° 2024-690 du 5 juillet 2024 portant transposition de diverses mesures prévues par l'accord national interprofessionnel du 10 février 2023 relatif au partage de la valeur au sein de l'entreprise (www.legifrance.gouv.fr)
• 30 January 2025: Décret n° 2024-644 du 29 juin 2024 portant application des articles 9, 10, 12 et 18 de la loi n° 2023-1107 du 29 novembre 2023 portant transposition de l'accord national interprofessionnel relatif au partage de la valeur au sein de l'entreprise (www.legifrance.gouv.fr)