by Elise Vanhamme
Increasing inflation and decreasing purchasing power are creating a tense situation for national economies, including that of France. In this article, we look at the statutory minimum wage.
While the terms inflation and indexation go hand in hand in Belgium, that is not the case in France where there is no automatic wage indexation. Indeed, in contracts of employment, clauses related to the automatic indexation of salaries with the rising cost of living are even forbidden.
The only wage element that is subject to inflation in France is the statutory minimum wage. Normally, the statutory minimum wage is increased annually by the government and applied on 1st January. If the price index increases more than 2% in the year concerned, however, then the minimum wage is increased earlier to match it.
The wage in France is based on statutory provisions and requirements catered for in the collective labour agreement. The law sets an absolute minimum, which is called le salaire minimum de croissance or SMIC.
No employee’s salary can fall below this minimum, even if provisions in the collective labour agreement might allow it. If the collective labour agreement provides for a higher minimum wage than the statutory minimum, then you still have to apply the statutory minimum.
To ascertain whether the employee’s wage threshold satisfies the minimum wage, the basic wage has to be compared with the statutory minimum. Certain other salary elements, such as benefits in kind or certain premiums that can be regarded as a pay component, are also included in the comparison.
Other elements, such as compensation for overtime, working on Sundays, night work or working on a public holiday, expenses for certain professional costs, compensation to circumstances of work or payments related to achieving certain objectives , etc., are not taken into account when evaluating whether the employee’s salary satisfies the minimum amount.
The minimum wage has been subject to a great deal of change in recent years due to the increase in the price index. The amount increased from a gross hourly wage of € 10.25 in January 2021 to € 11.06 from August 2022.
From 1st January 2023, the statutory minimum wage will be € 11.27 per hour. An employee who works 35 hours per week, the standard statutory length of the working week in France, must therefore receive at least a gross monthly salary of € 1,709.
If you would like more information about salaries in France, or if you are looking for a partner to help with the payroll of your French employees, don’t hesitate to get in touch with one of our experts.
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
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