Concretely, the government proposes to maintain these reductions on low salaries, capped at 2.5 SMIC, or 3,500 euros net, and to withdraw them for salaries above this amount. By opting for this provision, the government will gain only 2 billion euros in savings, compared to the 4 billion euros planned by the initial project.
As a reminder, the exemption from contributions currently applies to employees who receive between 1 and 3.5 SMIC, i.e. a salary between 1,426 euros and 5,000 euros. As a reminder, the category of employees whose remuneration is between 1 and 1.3 SMIC would be the most penalized by the increase in employer contributions.
Initially, these tax advantages were introduced with the aim of encouraging employers to recruit. However, today, they are slowing down salary increases, particularly for employees at the bottom of the salary scale. It must be said that the government's option to maintain this tax relief for low earners is unlikely to change the situation. For good reason, employers will be less inclined to increase remuneration beyond 3,500 euros, at the risk of losing the right to exemptions. A situation which outrages the employee unions, who have continued to demand the definitive elimination of these exemptions or their conditioning.
The increase in working hours, an effective alternative?
As a reminder, the increase in labor costs was rejected in the National Assembly, but could come into force, particularly for salaries above 3,500 euros if the government decides to use article 49.3. For his part, the Minister of the Economy, Antoine Armand, announced an alternative to this measure. “The objective must be, in any case, to increase the number of hours worked over the year, to be able to finance our social protection model to which we all hold dear. We will make proposals on this subject,” he explained during an interview with Les Echos.
He believes that the French work less compared to other European countries and that by working more, it would be possible to reduce the budget deficit. Remember that the exemptions on employer contributions from which employers benefit cost the State a whopping 80 billion euros.
