Bill 1272 seeks to transpose the provisions of a recent national inter-professional agreement into law. The bill’s provisions on profit-sharing would require companies with 11 or more employees to establish some form of profit-based reward scheme on a temporary basis, subject to future assessment of the success or failure of the mandate after five years. Currently, mandatory profit sharing (participation) applies to companies with 50 or more employees. According to the Ministry of Labor, while overall roughly 39% of the workforce received payments from participation plans in 2020 — 34% benefited from voluntary (intéressement) schemes — only 6% of workers in companies with between 10 and 49 employees were covered by participation plans (most commonly as part of a collective bargaining agreement – CBA) and 12% by intéressement plans. The bill was approved by the National Assembly on June 29, 2023, and is now with the Senate for review.
If approved, the bill would significantly increase the number of employers subject to mandatory profit sharing (or an approved alternative) and would introduce several tax-favored reward options that could — among other things — be used in tandem with company savings plans for retirement. Profit-sharing and savings plans have long been used by employers as part of a broader ecosystem both to encourage employee savings and to secure tax-favored treatment of profit-sharing payments (among other things), resulting in complex reward systems. As such, employers should already be considering the impact on both their obligations as well as their current practices.
Directeur de l'activité enquête de rémunération chez WTW, Khalil accompagne les entreprises à optimiser leurs politiques de rémunération.
