A few words on the law on sharing value within the company

The aim of Law 2023-1107 of 29 November 2023 is to provide companies with a “toolbox” to make it easier for them to involve their employees in their results, particularly SMEs.

It makes the existing profit-sharing, incentive and value-sharing bonus schemes more flexible and creates new schemes.

Most of these new arrangements are optional, with the exception of the following:

• The creation of an obligation to negotiate a value-sharing arrangement in companies with 50 or more employees, in the event of an exceptional increase in profits; however, this obligation to negotiate will only apply to companies with at least one union representative.

• Companies with between 11 and fewer than 50 employees will be obliged, once they have made a net profit for tax purposes equal to at least 1% of their turnover for 3 consecutive years, to put in place a value-sharing mechanism of their choice, if they do not already have one: a profit-sharing agreement, a matching contribution to a company savings plan, a collective retirement savings plan or a collective company pension savings plan, or even payment of a value-sharing bonus. This obligation will take effect from 2025.

The immediate focus should be on the changes to the value-sharing bonus scheme, applicable from 1 December 2023:

This optional bonus (formerly known as the “Macron bonus”) may now be the subject of two allocation decisions per calendar year, instead of just one previously.

In practical terms, a company that has already allocated a value-sharing bonus in 2023 may therefore decide to allocate a second one before 31 December.

The payment may still be made in one or more instalments.

The overall annual exemption ceiling for social security contributions remains unchanged: €3,000, or €6,000 if the company has set up a profit-sharing scheme.

The capped exemption from income tax and social security contributions for employees earning less than 3 minimum wage, which was due to expire on 31 December 2023, has been extended for a further 3 years, but only for companies with fewer than 50 employees.

Another new feature is that the value-sharing bonus can now be invested in an employee savings plan or company pension scheme.

It can also be matched by the employer. This investment will therefore enable employees of companies with 50 or more employees to benefit from an income tax exemption on their value-sharing bonus, and even on the employer’s contribution where applicable.

We’ll be coming back to the new mechanisms introduced by the law in a future blog post on social issues:

• more flexible arrangements for profit-sharing, incentive schemes and free share allocations;

• the optional company profit-sharing scheme, the application of which is subject to a decree;

• provisions designed to promote “green”, socially responsible savings in value-sharing bonuses and group retirement savings plans, the application of which is also subject to a decree.