Effective as of January 1, 2020, the French Government introduced some changes to its employment laws. They also declared a State of Health Emergency and released a labor law update effective from March 27, 2020. Learn more about 2020 France Labor Code changes.
Social and Economic Committee
As of January 1, 2020, all companies must have replaced the social and economic committee as their official staff representation body. If not, then they must hold professional elections to make the transition without further delay.
The French Government made the initial transfer order in an ordinance no 2017-1386 passed in 2017. The 2020 French labor law changes made the move compulsory and provided a deadline of January 1, 2020.
Macron Bonus Extension
The French government extended the Macron Bonus, which was first introduced in 2018 to 2020. Employees who have received remuneration, less than three times the value of annual minimum wage rate are exempt from paying income tax and social security contributions. The bonus must also exceed € 1000.
Acknowledgment of the Right to Make Mistakes – URSSAF
Companies no longer have to pay late surcharges and penalties for errors made on social declarations as long as the error is corrected and meets one of the following conditions:
The company corrects the mistake and pays the penalty before the first due date following the declaration and the date of the first payment. The penalty for regularizing is less than 5% of the additional contributions and social security charges. The penalty is lower than the monthly social security ceiling.
However, penalties and surcharges remain in case an employee is found missing from the declaration or if there are repeated inaccuracies in the application.
2020 Social Security Ceiling
The monthly social security ceiling value is increased to EUR 3,428 and the daily value to EUR 188 as of January 1, 2020. The total annual social security ceiling falls in at EUR 41,136.
Introduction of Flat Tax-Rate
The government introduced a flat tax rate for all employees on specified fixed-term contracts with the following exceptions:
- Those working in the entertainment industry
- Those working with intermediary associations
- Occasional dockworkers
- Those working in removal sector
Effective as of June 1, 2020, each company must pay EUR 10 per fixed-term contract under its name.
COVID Emergency Protocols
The French Government introduced some major changes to its labor law to protect the rights of employers and employees. The changes mentioned below are effective from March 12, 2020.
- Specification of the rules for compensation to employees on professional contracts or those on apprenticeships.
- Allows employees with open-ended contracts to be placed under partial activity.
- Provides additional allowance for employees in temporary employment contracts on partial activity, receiving less than the minimum wage.
- It limits senior managers from benefitting from partial activity regardless of the reduction in working hours.
- Specifies that the total amount received as partial activity compensation cannot be lower than the minimum wage.
The French Government also ordered further changes on March 25 and April 1 relating to the extension and response to the country’s health emergency.
Overall, the 2020 French Labor Law changes focus on protecting employees and employers amid the economic and health crisis. To learn more, visit Global People Strategist