French Value Sharing Law

The French Value Sharing Law of November 29, 2023, marks a significant progression in legislation, implementing measures from the national inter-professional agreement on value sharing within companies. The law aims to more closely associate employees with their companies’ performances.

The law focuses on five main areas to enhance social dialogue, facilitate the generalization of value-sharing mechanisms, simplify their implementation, and encourage employee share ownership.

1. Expanding Value Sharing in SMEs: It introduces measures to generalize value-sharing mechanisms, especially in SMEs. From January 2025, companies with 11 to 49 employees must implement at least one value-sharing scheme, a significant step towards encouraging profit sharing. This obligation is conditioned by a profitability requirement, with profits representing more than 1% of net taxable revenues for three consecutive years.

2. More Equity in Sharing Exceptional Profits: For companies with 50 employees or more, a new requirement for negotiation over exceptional profits is introduced. This ensures a fair distribution of these profits and strengthens the link between the company’s exceptional results and employee remuneration.
3. Facilitating the Payment of the Value Sharing Bonus (PPV): The law makes it easier for companies with fewer than 50 employees to award this bonus twice a year, with tax and social exemptions. It also introduces a new optional scheme,  ‘company valuation sharing plan,’ allowing employees to receive a bonus for an increase in the company’s value.
4. Promoting Responsible Savings: Beyond profit distribution, the law includes measures to promote green, solidarity-based, and responsible savings. Employee savings plans (PEE) and Collective Retirement Savings Plans (PERECO) must now offer funds that meet the criteria for financing the energy and ecological transition.
5. Encouraging Employee Shareholding and Growth Association (PPVE): A new scheme called ‘company valuation sharing plan’ or ‘PPVE’ is introduced to distribute bonuses to employees based on the company’s valuation growth over three years, encouraging employees to engage in the company’s growth.

In conclusion, the Value Sharing Law is a significant advancement for social dialogue, promoting greater employee commitment to their companies’ results. It now calls on companies, especially SMEs, to establish value-sharing schemes, marking a positive shift towards a more inclusive economy.

 

This information about the new French value sharing law is provided by Gerep, Asinta’s employee benefits consulting Partner in France. If you need support with your employee benefits in France, please contact Asinta, and we will connect you with the local experts at Gerep.