Estimated reading time (in minutes)
In a recent question-and-answer circular, the Administration provides clarifications regarding the adjustments resulting from the 2nd amending finance law of August 16, 2012. These adjustments specifically focus on the partial abolition of the preferential scheme for overtime and additional hours, with a refocus on Very Small Enterprises (VSEs) having fewer than 20 employees.
Changes in Overtime Regulations: Impact on VSEs:-
The circular reaffirms that companies employing fewer than 20 employees will continue to benefit from the flat-rate employer deduction for overtime worked by full-time employees, amounting to €1.50 per hour, under the same conditions as before.
Revised Social Package and Fillon Relief: Important Updates for Employers:-
However, starting from September 1, 2012 (practically September 3, 2012, for weekly statements), overtime no longer qualifies for the flat-rate deduction of €0.50 per hour, except when there is an arrangement of working time exceeding the week but not exceeding the year. In such cases, specific provisions apply:
- If the annual working time calculation period ends on or before December 31, 2012, remuneration for hours worked beyond 1607 hours will still benefit from the previous version of salary reduction and employer deduction, even if the remuneration is paid in early January 2013.
- If the annual working time calculation period ends on or after January 1, 2013, overtime will no longer be eligible for salary reduction or employer deduction, except for companies with at least 20 employees.
The circular also provides important details on working time counting in the case of an annualization agreement, whether it ends in 2012 or starts from January 1, 2013. It emphasizes that no proration is allowed in these situations.
Additionally, the Social Security Department revises the social package, increasing the rate to 20% for all amounts paid in financial participation from August 1, 2012. The applicable rate will be based on the time of distribution, regardless of immediate availability. However, the rate remains at 8% for employers’ contributions to supplementary pension benefits and for amounts allocated to the special profit-sharing reserve within workers’ production cooperative societies.
The circular also mentions that the URSSAF (French Social Security Collection Agency) has published standard personnel codes on its website for social declarations related to these changes, including the taxation of stock options and free share allocations.
These adjustments do not affect the Fillon relief calculation, which has not been modified by this law. However, it is worth noting that the threshold for the increased Fillon reduction, now extended to companies with fewer than 20 employees, will be applicable from January 1, 2013, based on the annual headcount for 2012 assessed as of December 31, 2012, considering the annualization of the Fillon system.
