[France] Employers call social security contribution reductions freeze a "double penalty"

In France, the country’s main employers' organisations have spoken out against the government's decision to freeze social security contribution reductions despite the automatic 2.4 per cent increase in the minimum wage (SMIC) scheduled for June 1, Entrevue reports.

In a May 31 opinion piece, the organisations’ leadership united to denounce a measure, they claim, would particularly penalise companies employing a large number of minimum wage earners.

The statement’s signatories included presidents of the Medef, CPME, U2P, FNSEA, UDES, and FESAC. It reportedly criticises a decision that was, they say, made without prior consultation with representatives of the business community. 

The employers' organisations expressed regret at not meeting with the government before the announcement of this measure.

Last week, David Amiel - the Minister for Public Accounts - confirmed that the budget allocated to payroll tax exemptions for low wages would remain unchanged despite the increase in the minimum wage. 

According to the government, this decision was prompted by a need to achieve several billion euros in savings within a budgetary context marked by the economic consequences of the conflict in the Middle East.

Employers' organisations reportedly stated that this decision amounts to forcing companies to bear a labour costs increase, without compensation. They say employers will have to simultaneously absorb the increase in the minimum wage and the automatic reduction in benefits linked to payroll tax cuts.

This measure comes in the wake of the unemployment rate rising above 8 per cent, with several economic sectors remaining fragile. 

The signatories described it as a "worrying sign" likely to affect employment and investment in many regions.

Source: Entrevue

In France, the country’s main employers' organisations have spoken out against the government's decision to freeze social security contribution reductions despite the automatic 2.4 per cent increase in the minimum wage (SMIC) scheduled for June 1, Entrevue reports.

In a May 31 opinion piece, the organisations’ leadership united to denounce a measure, they claim, would particularly penalise companies employing a large number of minimum wage earners.

The statement’s signatories included presidents of the Medef, CPME, U2P, FNSEA, UDES, and FESAC. It reportedly criticises a decision that was, they say, made without prior consultation with representatives of the business community. 

The employers' organisations expressed regret at not meeting with the government before the announcement of this measure.

Last week, David Amiel - the Minister for Public Accounts - confirmed that the budget allocated to payroll tax exemptions for low wages would remain unchanged despite the increase in the minimum wage. 

According to the government, this decision was prompted by a need to achieve several billion euros in savings within a budgetary context marked by the economic consequences of the conflict in the Middle East.

Employers' organisations reportedly stated that this decision amounts to forcing companies to bear a labour costs increase, without compensation. They say employers will have to simultaneously absorb the increase in the minimum wage and the automatic reduction in benefits linked to payroll tax cuts.

This measure comes in the wake of the unemployment rate rising above 8 per cent, with several economic sectors remaining fragile. 

The signatories described it as a "worrying sign" likely to affect employment and investment in many regions.

Source: Entrevue