Measures to boost wage savings

The recent Law of Acceleration and Simplification of Public Action (known as the «ASAP(1) Act») contains various measures designed to simplify the implementation in companies of incentive, profit-sharing and wage savings plans.

A negotiation at the industry-level

The Business Growth and Transformation Act (the so-called «Pact Act») requires each industrial sector to establish an incentive plan, a profit-sharing plan or a business-to-business savings plan (PEI(2)) by December 31, 2020.

As all industrial sectors have failed to meet this deadline, the ASAP Act finally gives them additional time until December 31, 2021 to fulfil this requirement.

Once the industry-level agreements are approved by the administration, companies wishing to implement them must enter into one of the following agreements:

- an agreement with a trade union representative;

- an agreement with employees mandated by representative trade union organisations in the company;

- an agreement with the Social and Economic Committee;

- a draft agreement proposed by the employer and ratified by a two-thirds majority of employees.

Precision: Companies with less than 50 employees can establish such a scheme through a unilateral engagement of the employer but only if the industry-level agreement provides for it and proposes, in the form of a standard agreement indicating the different choices given to the employer and the specific stipulations for these companies.

A short-term incentive agreement

Formerly, incentive agreements had to be concluded for a period of at least 3 years. These agreements can now be concluded for a period between 1 year and 3 years.

Precision: When the agreement is renewed tacitly, the new duration is the same as its original duration.

For the record, it must be noted that agreements for shorter period than 3 years was already possible:

- if they were concluded between January 1st and August 31, 2020;

- when the incentive was set up by a unilateral decision of the employer in a company employing less than 11 employees.

An easily implementable PEI (profit-sharing / business-to-business savings plan)

Until now, a profit-sharing plan or a business-to-business savings plan, instituted between several companies, had to be established by an agreement with a trade union representative or with the CSE(3) or following a ratification of a draft agreement by a two-thirds majority of employees.

It is now possible for a company to institute or join a profit-sharing plan or a business-to-business savings plan by a unilateral decision of the employer.

(1) Accélération et de Simplification de l’Action Publique = ASAP. (2) Participation ou un Plan d’Epargne Interentreprises = PEI. (3) Comité Social et Economique (CSE).