Macron’s new measures
THE GOVERNMENT’S NEW MEASURES
FOR EMPLOYEES AND PENSIONERS
On 10 December 2018, the President of the Republic announced several measures in favor of the purchasing power of employees. They will appear in legislation that is expected to be passed by the end of the year.
Without delay, here is the main part of these measures (which may evolve as part of the review of the bill). Note that the increase in the SMIC of 100 € would be through an increase in the activity premium.
I/ Exceptional premium of purchasing power
Employers will be able to pay an exceptional purchasing power premium to employees without payroll taxes, which the main features of are :
- It is optional for the employer ;
- It may not substitute for an element of remuneration provided for by agreement, contract or use : it must come in addition to what is usually paid
- It can be paid from December 11, 2018 to March 31, 2019 ;
- It may be paid to all employees or to those whose remuneration is less than a freely defined ceiling in the undertaking ;
- When it is paid, it must benefit to all employees present on December 31, 2018 or present on the date of the payment (if paid between December 11, 2018 and December 31, 2018);
- The amount may vary depending on the level of remuneration, the duration of the contract and the actual length of presence in 2018 ;
- It is exempt from all social security contributions (including CSG/CRDS) and income tax within the limit of 1,000 €, only for employees for whom the employer pays unemployment insurance (therefore not for managers), and whose remuneration received in 2018 does not exceed 3 annual SMIC calculated under the same conditions as for the relief said Fillon (contractual hours + overtime/additional hours without markup);
The amount of the premium, the possible ceiling, the methods of calculation are provided for :
- By agreement concluded before 31 March 2019 ;
- Or by unilateral decision of the employer made before January 31, 2019, after informing the employee representatives, if they exist in the company (before March 31, 2019).
II/ Overtime and Supplementary Hours : Wage and Income Tax Exemptions
Overtime and additional hours (for part-time employees) worked from 1 January 2019 will be exempt from certain payroll taxes. They will remain subject to CSG-CRDS and contingency contributions. They will be exempt from income tax within the annual limit of 5,000 €.
III/ Increase of the SMIC
An increase in SMIC of 100 € was announced, that will go through an increase in the activity premium. This will come in addition to the automatic upgrading of the SMIC on 1 January (1,5%). The bonus will be paid on February 5 to supplement the January salary.
IV/ CSG of pensioners
The CSG supplement of 1.70% will no longer apply in 2019 to retirees with a penultimate reference income of less than 22,580 € for the first share of family quotient plus 6,028 € per additional half. The people concerned will benefit from regularization.