The Prime Minister has presented a message regarding the implementation of the responsibility and solidarity pact.
France is at a pivotal moment.
For over ten years now, the number of production plants has diminished, competitiveness has deteriorated and the unemployment level has risen.
France was not ready to endure the shock of the 2008 crisis, which deeply degraded our public finances, accelerated deindustrialisation and weakened growth. It was not until 2013 that production levels reached pre-crisis levels once again.
Decline cannot be our fate. That is why all of the country's political, social and economic powers have a huge responsibility.
Our priority is the millions of French people who are unemployed, the poor workers, the students without prospects, the youth without qualifications and the seniors dismissed from the working world too early.
The responsibility pact commits the State, the social partners and economic players until 2017, and even beyond.
The responsibility pact is a new stage in our recovery. This effort will inevitably be long. There are no miracles, no magic. There is just the continuation of the slow reconstruction begun two years ago.
Four levers will be employed:
- Reducing companies’ tax and labour costs to generate margins for investment and jobs creation;
- Reducing payroll taxes to provide better wages;
- Amplifying the simplification shock in the many domains that affect the lives of companies;
- Opening the field of social negotiation to implement and evaluate our commitments.
1. Reducing tax and labour costs
The Competitiveness and Employment Tax Credit (CICE / Crédit d’Impôt Compétitivité Emploi) benefits companies in which the employees earn less than 2.5 times the minimum wage.
It affects 6% of the payroll, or approximately €20 billion.
The CICE is an effective instrument for helping the productive sector restore its margins and lower the cost of labour. It will thus be maintained.
It will be completed by an efficient and simple measure, thus readable by all companies and the employees themselves.
This is why the Government will decrease the "family" contributions paid by employers by 1.8% to 3.5 times the minimum wage in 2015 and 2016.
As of 2015, this reduction will be effective for employees earning up to 1.6 times the minimum wage and every existing or newly recruited employee at the minimum wage level will work with "zero costs" for their employer. All the reductions granted over the last several years will be integrated into the contributions scale. They appear in the form of a single line on payslips.
In 2016, the 1.8% reduction of employer contributions will be extended for wages between 1.6 and 3.5 times the minimum wage.
The resources from the social security schemes will remain fully covered by the State.
Overall, a reduction in expenses of more than €30 billion will have been approved since 2012.
As for independent entrepreneurs (artisans, farmers and liberal professions etc.) who are not eligible for the CICE, they will be granted a reduction of just over 3 points of family contributions as of 2015. This reduction, valid for those whose earnings are less than 3 times the minimum wage, will thus allow them to hire more easily.
In total, this represents €10 billion of supplementary reductions.
To reduce the taxation that weighs on companies, the company social solidarity contribution will be eliminated in 3 years. As of 2015, this tax will be reduced for all companies and totally eliminated for two thirds of those in debt (i.e. 200,000 companies), for a total cost of €1 billion.
In 2016, the exceptional contribution on company taxes ("surtax") will disappear.
Furthermore, the company tax rate will be reduced as of 2017 and revised to 28% in 2020.
Finally, to simplify our tax system, dozens of small complex taxes and with little return will finally be eliminated.
2. Providing better wages
The country must recognise the efforts of those who work, often hard, and who have suffered the fall-out of the crisis.
That is why social contributions paid by employees whose wages are inferior to 1.3 times the minimum wage will be reduced for a net cost of more than €2 billion in 2015. This will represent an approximate €500 increase in net salary for a full-time minimum wage worker, or a half "13th" month per year. 6.8 million workers will benefit from this measure.
Moreover, the taxes weighing on low-income households will also be reduced.
All of these measures will represent €5 billion by 2017.
3. Simplifying the lives of companies
Over the next three years, the company simplification council will present ten concrete simplification measures per month.
It will verify, entirely independently and by a preliminary impact study, that the new texts do not create supplementary costs for companies. All new standards should be compensated by the elimination of others.
We will thus give ourselves the means to ensure that the simplification in progress will not offset by the development, in the future, of a new complexity.
All new standards will be subject to a "company test" by the simplification council. Parliamentarians will be encouraged to follow this approach for the texts relevant to their initiative. From June, all the implementation measures for the accountability account (compte pénibilité) will be submitted to the simplification council.
Before the summer, the Government will present Parliament a new enabling draft law to simplify the lives of companies by ordinance, pursuing the work begun with the law of 2 January 2014, which allowed for the first simplification rulings.
- Regarding employment and the creation of companies:
A true employment voucher (chèque emploi) scheme will be established. The Titre Emploi Service Entreprise (which allows users to fill out the preliminary employment statement, social declarations and regulations with one single document online) will be extended to companies with less than 20 employees.
The work on the simplification of payslips will be launched in spring 2014.
The number of statuses for individual companies will be reduced.
A single declaration, submitted to a single body, will be necessary to create a company.
- Regarding taxes:
In accordance with the conclusions of the company tax symposiums, the Government will commit to a good conduct code avoiding the recourse to retroactive tax measures.
Tax instructions will be published on a fixed date, the first of every month.
The administration will implement a principle of a priori trust in its relations with companies. Certain declarative obligations will thus be eliminated. Trials of the "trust protocols", which will make it possible to strengthen the upstream relations between the tax administration and companies and at the same time to reduce the need for up downstream controls, will be progressively extended.
- Regarding relations between the administration and companies:
All legislation and applicable regulations will be made accessible via a single website, in order to facilitate access to the law.
According to the tax ruling model, answers-guarantees will be developed to offer project leaders visibility concerning the manner in which such or such a regulation will be implemented.
Regarding the environment, the housing or the labour law, the Government will establish a principle of reasonable delays for the implementation of new standards, so as to allow the players to benefit from the time required to adapt their organisations.
The handling delays of requests from economic players will be reduced, notably by simplifying the operation of the local administrative commissions or certain complementary consultation obligations, as in the case of construction permits.
The sub-prefects will also be brought into play to simplify the lives of companies and a mediator for the relations between the administration and companies will be put in place in each department.
A single company identification number (SIRET) will be required to access public procurement from now on.
The simplification council will take responsibility for the document posting and transmission obligation burdens on companies by the summer.
4. Opening social negotiation on commitments
The pact is based on the social negotiation provided for in the list of findings concluded on 5 March by several representative social partners.
The follow-up method for the implementation of the engagements will be carried out in a framework involving all the actors: employers, unions and public authorities.
It will form the "National Tripartite Observatory", which will be presided over by the Prime Minister and benefit from the contribution of the Commissioner General for Strategy and Forecasting (Commissariat général à la stratégie et à la prospective).
The professional branches should arrive at a collective agreement or a signed summary of conclusions specifying quantitative and qualitative objectives in terms of employment.
They should focus in particular on the the employment of young people as part of a work/study programme and in the framework of generation contracts (contrats de generation). The qualitative dimension will be equally important, especially the commitments aiming to promote sustainable insertion, the fight against job insecurity and the employment of young people.
The third major social and economic conference in June 2014 will be an opportunity for a first "review meeting" on the follow-up of the pact. The majority of the professional branches will have taken on these commitments by that time.
A social discussion at the inter-professional level will provide the professional branches with the necessary tools for the construction of a provisional management of employment and a development policy of the qualifications, drawing in particular on the new personal training account.
Using the diagnosis of the modernisation of the social dialogue, an inter-professional negotiation will be opened in the next few weeks, focusing on the simplification and improvement of the functioning of the staff representative bodies, as well as the consideration of the exercising of trade union responsibilities in employees’ careers. The aim of this negotiation will also be to evaluate the pertinence of the thresholds expressed in number of workers in our country.
The Ministry of Labour will propose an orientation document to the social partners. The negotiation should come to a conclusion before the end of 2014.
The social partners will finally open negotiations, as of the spring, on the development of participation, profit-sharing and the reform of the employee savings scheme. The profit-sharing bonus will be eliminated.
Over the coming three years, the Pact will be marked by regular assessments and progress reports.
The pact is now our responsibility.
Excerpts from the Council of Ministers