The Value-Sharing Law (partage de la valeur) encourages French companies, particularly SMEs, to share part of their profits with their employees. The aim of this legislation is to help strengthen pay equity and allow employees to participate in the company’s financial success, thereby increasing their motivation and commitment.
The law was introduced in November 2023 on an experimental basis and became mandatory from 1st January 2025. The experimental period will end in November 2028.
Which companies must participate in value-sharing?
Companies with 11 to 49 employees are required to implement at least one value-sharing option, as long as they have made a net profit of at least 1% of their revenue over three consecutive financial years. The financial years from 2022-2024 are included in the calculation for 2025.
How can companies implement value-sharing?
The law highlights several value-sharing options that employers may use to comply with the new law. These include:
- Voluntary mandatory profit-sharing (participation): redistribution of a portion of profits to employees. Note: this option is already mandatory for companies with more than 50 employees.
- Non-mandatory profit-sharing (intéressement): distribution of an employee bonus based on the collective performance of the company, dependent on the achievement of set targets.
- Value-sharing bonus (prime de partage de la valeur, or PPV): formerly known as the ‘Macron Bonus’, the payment is exempt from employee and social contributions up to a limit of €3,000, or €6,000 under specific conditions.
- Contribution to an employee savings plan (abondement à un plan d’épargne salarial): a financial tool that allows employees to save money for personal projects, often with matched employer contributions.
Each option is subject to different rules and conditions, all of which should be considered carefully. Payments related to value-sharing cannot replace wages, pay increases, or bonuses already provided for in company contracts and related agreements.
Are all employees eligible for value-sharing?
The employer may distribute value-sharing-related payments equally among all employees or adjust the amount according to certain criteria, including seniority, length of service with the company, and contract type. Such criteria must not be based on any discriminatory grounds prohibited by law, such as age or sex.
As such, the terms and amount of payments made may either be subject to a company or group collective agreement, or an independent employer decision. The company’s CSE may be involved in negotiations regarding value-sharing options and payments.
What are the benefits of value-sharing in French companies?
From the employer’s point of view, value-sharing may strengthen employee commitment because if the company is profitable, they will personally benefit. This could have positive effects both on retention and attracting new talent to the company. There are also certain tax advantages to be gained from some value-sharing options.
Employees also receive some exemptions from tax on payments related to value-sharing, as well as financial recognition of their contribution to the company’s success. In some cases they will also benefit from enhanced savings, to help them commit to – and invest in – their future goals.
Can we help clarify value-sharing options in French companies?
We would be happy to discuss value-sharing obligations in your French company, as part of a free initial consultation. Please contact us to arrange a convenient time.