PROFIT EMPLOYEES
| LABOR CODE (Legislative Part) | |
| Chapter 1: Employee profit-sharing in the company | |
| Article L441-1 | |
| (Law n ° 82-957 of November 13, 1982 art. 28 Official Journal of November 14, 1982) (Ordinance n ° 86-1134 of October 21, 1986 art. 33 Official Journal of October 23, 1986) (Law n ° 94-640 of July 25, 1994 art. 33 I and V Official Journal of July 27, 1994) (Law n ° 2001-152 of February 19, 2001 art. 1 Official Journal of February 20, 2001)Employee profit-sharing in the company can be ensured in any company which fulfills its obligations in terms of staff representation, whatever the nature of its activity and its legal form, by an agreement valid for a period of three years and past: – either within the framework of a collective labor agreement or agreement; – or between the head of the company and the representatives of representative trade unions within the meaning of Article L. 423-2; – or within the works council; – either following the ratification by a two-thirds majority of the staff of a draft agreement proposed by the company manager; if there is in the company one or more representative trade unions within the meaning of Article L. 423-2 or a works council, the ratification must be requested jointly by the head of the company and one or more of these organizations or this committee. However, the provisions of this chapter are only applicable as of right to public enterprises or national companies if they fall within the scope defined in Chapter I of Title III of Book 1 of this Code. A Council of State decree sets the conditions under which the provisions of this chapter are applicable to public enterprises and national companies that do not meet the condition set in the second paragraph. |
Profit-sharing and participation: contribution of the reform, Touati, Jean-Jacques, Travail et protection sociale, n ° 8, 01/08/2001, pp. 7-8 |
| Article L441-2 | |
| (Law n ° 73-1197 of December 27, 1973 Official Journal of December 30, 1973) (Decree n ° 75-493 of June 11, 1975 Official Journal of June 20, 1975) (Ordinance n ° 86-1134 of October 21, 1986 art. 33 Official Journal of October 23, 1986) (Law n ° 94-640 of July 25, 1994 art. 33 I and V Official Journal of July 27, 1994) (Law n ° 2001-152 of February 19, 2001 art. 1 art. 2 II art . 5 I art. 11 II Official Journal of February 20, 2001)To give entitlement to the exemptions provided for in Articles L. 441-4 and L. 441-6 below, the agreements entered into pursuant to Article L. 441-1 must institute a collective profit-sharing scheme for employees which is of a random nature and resulting a calculation formula linked to the results or performance of the company during a year or a period of a shorter duration, expressed as a whole number of months at least equal to three or to the results of the one or more of its subsidiaries within the meaning of Article L. 233-16 of the Commercial Code, provided that, at the date of conclusion of the agreement, at least two-thirds of the employees of these subsidiaries located in France are covered by a profit-sharing agreement;a commitment to negotiate, in each of the subsidiaries which are not covered by such an agreement, within a maximum period of four months from the same date, must be made by the company. These agreements must set up a system of staff information and verification of the terms of implementation of the agreement. They include in particular a preamble indicating the reasons for the agreement as well as the reasons for choosing the methods of calculating the incentive and the criteria for the distribution of its income. The agreements entered into in application of Article L. 441-1 must define the methods for calculating the profit-sharing. These modalities may vary according to the establishments and the work units; the agreement may, for this purpose, refer to establishment agreements. The total amount of bonuses distributed to employees must not exceed 20% annually. 100 of the total gross salaries paid to the persons concerned. The agreements entered into in application of Article L. 441-1 must define the criteria for the distribution of profit-sharing income. The distribution between employees can be uniform, proportional to salaries or the length of time in the company during the financial year, or jointly retain these different criteria. The periods referred to in Articles L. 122-26 and L. 122-32-1 are assimilated to periods of presence. These criteria may vary between establishments and work units; the agreement may, for this purpose, refer to establishment agreements. Agreements that have been approved in application of Ordinance No. 59-126 of January 7, 1959 tending to promote association or The amount of premiums distributed to the same employee may not, for the same financial year, exceed an amount equal to half of the amount of the average annual ceiling used for the calculation of social security contributions. To give entitlement to the exemptions provided for in Articles L. 441-1 and L. 441-6 below, the agreements must have been concluded before the first day of the seventh month following the date of their entry into force and filed by the party the most diligent no later than fifteen days following the conclusion to the departmental directorate of labor, employment and vocational training of the place where they were concluded. When the incentive calculation formula retains a period of less than one year, the agreement must be concluded before the first half of the first calculation period. |
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| Article L441-3 | |
| (Law n ° 73-4 of January 2, 1973 Official Journal of January 3, 1973) (Decree n ° 74-808 of September 19, 1974 Official Journal of September 29, 1974) (Ordinance n ° 86-1134 of October 21, 1986 art. 33 Official Journal of October 23, 1986) (Law n ° 94-640 of July 25, 1994 art. 33 I Official Journal of July 27, 1994) (Law n ° 2001-152 of February 19, 2001 art. 1 art. 5 II Official Journal of February 20, 2001)Any agreement must specify in particular: 1. The period for which it is concluded; 2. The establishments concerned; 3. The profit-sharing methods used; 4. The methods of calculating the profit-sharing and the criteria for the distribution of its products in compliance with the provisions provided for in Article L. 441-2; 5. Payment dates. Any sum paid to employees in application of the profit-sharing agreement beyond the last day of the seventh month following the end of the financial year will produce interest calculated at the legal rate. This interest, payable by the company, is paid at the same time as the principal and benefits from the exemption regime provided for in Articles L. 441-4 and L. 441-6 below. When the profit-sharing calculation formula uses a period of less than one year, the interest begins to run on the first day of the third month following the end of the profit-sharing calculation period; 6. The conditions under which the works council or a specialized committee created by it or, failing that, the staff representatives have the necessary means of information on the conditions of application of the clauses of the contract; 7. The agreed procedures for settling disputes which may arise in the application of the agreement or during its revision. When there is a works council, the project must be submitted to it for opinion at least fifteen days before signing. |
JURISPRUDENCE
INTEREST AGREEMENT AND RATE OF WORK ACCIDENT
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| Article L441-4 | |
| ( Ordinance n ° 86-1134 of October 21, 1986 art. 33 Official Journal of October 23, 1986) (Law n ° 94-640 of July 25, 1994 art. 33 I Official Journal of July 27, 1994) (Law n ° 2000-1352 of December 30, 2000 finances for 2001 art. 105 Official Journal of December 31, 2000) (Law n ° 2001-152 of February 19, 2001 art. 1 art. 11 III Official Journal of February 20, 2001)The sums allocated to employees in application of the profit-sharing agreement do not have the character of remuneration, within the meaning of Article L. 242-1 of the Social Security Code, for the application of the legislation of the social security and cannot replace any of the elements of remuneration, within the meaning of the same article, in force in the company or which become compulsory by virtue of legal or contractual rules. However, this non-substitution rule may not have the effect of calling into question the exemptions provided for both in this article and in Articles L. 441-5 and L. 441-6 below, provided that a period of twelve months have elapsed between the last payment of the component of remuneration which has been wholly or partially removed and the effective date of this agreement. The sums mentioned in the first paragraph do not have the character of a salary element for the application of labor legislation. The non-substitution rule does not apply when the sums are distributed under a profit-sharing agreement, concluded, modified or planned, before the date of publication of the law n ° 2001-152 of February 19, 2001 on employee savings, within the framework of an agreement to reduce working hours fixing the working time at a level at most equal to the duration mentioned in Articles L. 212-1 and L. 212-8. |
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| Article L441-5 | |
| (Law n ° 94-640 of July 25, 1994 art. 33 I Official Journal of July 27, 1994) (Law n ° 2000-1352 of December 30, 2000 finances for 2001 art. 105 Official Journal of December 31, 2000) (Law n ° 2001-152 of February 19, 2001 art. 1 Official Journal of February 20, 2001)Companies where profit-sharing is implemented under the conditions provided for in Articles L. 441-1 to L. 441-4 can deduct from the bases retained for the base of the corporation tax or the tax on the income the amount of participations paid in cash to employees in application of the profit-sharing contract. These participations are also exempt from the payroll tax provided for in article 231 of the general tax code. For employees, they are subject to income tax according to the rules set out in a of 5 of article 158 of the general tax code. |
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| Article L441-6 | |
| (Law n ° 94-640 of July 25, 1994 art. 33 I and VI Official Journal of July 27, 1994) (Law n ° 2001-152 of February 19, 2001 art. 1 Official Journal of February 20, 2001)In the event that an employee who has joined a company savings plan provided for in Chapter III of this title allocates all or part of the sums allocated to him by the company under the profit-sharing, these sums are exempt from income tax up to an amount equal to half of the average annual ceiling used for the calculation of social security contributions. | |
| Article L441-7 | |
| (Ordinance n ° 86-1134 of October 21, 1986 art. 33 Official Journal of October 23, 1986) (Law n ° 94-640 of July 25, 1994 art. 33 I Official Journal of July 27, 1994) (Law n ° 2001-152 of February 19, 2001 art. 1 Official Journal of February 20, 2001)In the event that a change in the legal situation of the company, by merger, sale or demerger, makes it impossible to apply a profit-sharing agreement, said agreement ceases to have effect between the new employer and the staff of the company. In the absence of a profit-sharing agreement applicable to the new company, the latter must initiate negotiations within six months, according to one of the methods provided for in Article L. 441-1 above, with a view to the possible conclusion of a new agreement. |
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