CORONAVIRUS- Purchasing power bonus (“Macron bonus”): the conditions for payment are alleviated

CORONAVIRUS- Purchasing power bonus (“Macron bonus”): the conditions for payment are alleviated

CORONAVIRUS- Purchasing power bonus (“Macron bonus”): the conditions for payment are alleviated

In our newsletter of February 28th, 2020 , attached for reference, we informed you of the renewal of the “Macron bonus” for 2020.

Recent legislation passed in the context of the Coronavirus situation has now removed the requirement of a profit-sharing agreement for the payment of a purchasing power bonus.

As per article 7 of the Social Security Financial Law, the purchasing power bonus of a maximum of 1,000 euros would have been exempt of social contributions and employee income tax, if based on a profit-sharing agreement and paid by June 30th, 2020.

In order to promote payment of this bonus for employees who have continued to work despite the constraints due to the covid-19 epidemic, the French Government has modified the following rules:

–  a profit-sharing agreement is no longer required.

– the amount of bonus exempt of social contributions and employee income tax is: 1,000 euros maximum for companies without profit-sharing agreement; 2,000 euros maximum when a profit-sharing agreement is in place at the time of payment of this bonus and signed before August 31st, 2020.

– the payment date of the bonus, which  initially had to be between December 28th, 2019, and June 30th, 2020, is extended to August 31st, 2020.

– the bonus can be paid to employees with an employment contract at the time of payment of the bonus, but also to employees with an employment contract at the date of publication  of the collective agreement or of the unilateral decision implementing the bonus. 

– a new criterion which enables the modulation of the bonus amount depending on the beneficiary has been added: “working conditions related to the Covid-19 epidemic”. This criterion is added to the other existing modulation criteria: remuneration, level of qualification or of classification, or working time.

Please note that the Labor Ministry stated that companies which already paid a 2020 purchasing power bonus  can pay a second bonus, providing that the cumulated amount does not exceed the cap of 1,000 euros in the absence of profit-sharing agreement or of 2,000 euros with a profit-sharing agreement. In addition, the social security office (Urssaf) has confirmed that, if a bonus was already paid and if a profit-sharing agreement is in place, the employer can top up the bonus and the threshold of the €2,000 euros exemption will be considered over all bonuses paid between December 28th, 2019 and August 31st, 2020.

Helen Abruzzino

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