Salaries: a decree published to sanction branches whose minimums are lower than the minimum wage

Reductions in employer contributions for companies in professional sectors whose conventional minimums are lower than the minimum wage will be reduced by calculating them from these minimums and no longer from the amount of the minimum wage, under a decree published in the Official Journal on Tuesday.

This long-awaited decree is one of the measures put forward on Monday by the government to respond to pressure from unions demanding salary increases. Because if no employee can be paid below the minimum wage, their salary progression may be slowed down because the “national professional minimum salary” of the branch to which they belong is lower than the minimum wage.

Today, 69 branches have minimums below the minimum wage and the increase in the minimum wage on December 1st should push an additional 64 into non-compliance, according to the Ministry of Labor. For companies in a sector to be financially sanctioned, their sector minimum must have remained below the minimum wage “during the entire previous calendar year”, specifies the decree. The list of branches concerned is published “each year, no later than January 31”. This decree “is subject to rectification no later than November 30 of each year so that professional branches are removed from the list” for which the branch minimum “will have been revalued between January 1 and October 31 to the level of the minimum wage in force on January 1 of the previous year,” the decree further specifies.

An employer in a sector with minimums lower than the minimum wage, but who demonstrates that he pays above the minimum wage will not be penalized. This decree comes into force on Wednesday and the first year taken into account for the new method of calculating employer contributions will be 2027. The text could be tightened subsequently if branch managers do not play the game, warned the Minister of Labor Jean-Pierre Farandou on Monday.

For Agathe Le Berder of the CGT, “the main problem with this decree is that collective sanctions work very, very slowly, since it takes a whole year of non-compliance to be sanctioned”. “If a company depends on several collective agreements, we will apply the most favorable sanction,” she also denounces, judging that the decree leaves “plenty of exit doors” for companies. The decree also specifies the composition of the “monitoring committee for the reform of general reductions” in contributions, made up of experts and representatives of employers and unions, which will meet “at least once a year” by 2029.

Unions have long criticized the lack of conditionality in contribution reductions. The concentration of these reductions around the lowest wages also makes wage increases more costly for employers, and thus slows down wage progression. The scale of these reductions was frozen last June, during the last revaluation of the minimum wage to keep up with inflation, to the great dismay of employers' organizations.