Reductions in charges: the Minister of Labor ensures that companies have “the word of the government”

The Minister of Labor, Jean-Pierre Farandou, assured Saturday that “bosses have the word of the government” on reductions in charges and that if a wage recovery is effective, the increase in labor costs will be limited, in an interview with Ouest France.

On Thursday, the minister chaired a “salary monitoring committee” to encourage employers to immediately increase the minimums practiced in the different professional branches, three days after government announcements on an increase in the minimum wage.

But employers' organizations repeat that they cannot support the combination of an increase in wages and a reduction in reductions in employer contributions.

Reform of reductions in employer contributions

“If we see a real wage recovery in the coming weeks, we will limit by decree, at the beginning of 2027, the increase in labor costs, by adapting the scale of reductions. We are ready to work on it with employers’ organizations,” assured Jean-Pierre Farandou on Saturday. “The bosses have the word of the government, that’s not nothing,” he adds.

With more than 70 billion euros per year in costs for public finances, reductions in charges constitute the main financial support for employment. Last June, the government froze general reductions when the minimum wage was increased, sparking strong protests from employers' organizations.

The draft Social Security budget for 2027 provides for a continuation of this freeze as well as an expansion of the base of remuneration taken into account, to reduce the cost of the reductions.

More broadly, the government intends to initiate “at the beginning of 2027” a reform of reductions in employer contributions, accused of being low-wage traps. “We will make proposals to the Prime Minister within three months, knowing that the revision of the scale can be done by decree,” says Mr. Farandou.