Global employment briefing: France, January 2018

Macon’s labour reforms are in effect and further changes are expected

The ‘Macron’ executive orders are effective

After the publication of the executive orders at the end of September 2017 (see our October briefing), a large number of decrees have now been published. These decrees include all the practical provisions that allow an effective implementation of the reforms, but do not impact on the meaning of the reform itself.

More major reforms in the future

The labour law reform is just the beginning, rather than the end, because President Macron has already announced a series of other major social reforms in relation to the world of work. It is still too soon to get a precise idea of these developments planned for 2018 and beginning of 2019, but we already know their purpose:

• The Government is starting a substantial change in the rules relating to vocational training in order to simplify and improve the system and to give more freedom to social partners in occupational fields
• Simultaneously, the Government has launched a large public consultation, with the aim of draft legislation in April, on the various employee savings systems: incentive, profit-sharing and company savings plan. The aim would be to increase their place in employees’ remuneration.
• Also, the unemployment allowance should be amended by next June. Companies are interested in two issues and both are being discussed. Firstly, increasing taxation on short-term fixed employment contracts and, secondly, allowing employees who resign to receive unemployment allowance (under some conditions).
• Lastly, all the French pension systems are in the Government’s sights as it has launched a consultation on merging the existing systems by mid-2019.

Other developments that have come into effect

Since 1st January 2018, some rules relating to social security contributions have been changed. The rate of CSG/CRDS (a form of social charge in France) has increased in exchange for the removal of employee health insurance contribution and a decrease (before the removal) in employee unemployment contributions.

The latest ongoing development is withholding income tax. Until now, employees themselves should report and pay their income tax. From 2019, companies will be responsible for this. At the end of 2018, the State will provide them with the taxation rate they will have to apply on the remuneration of each of their employees.