What are profit-sharing schemes?
Employee savings schemes are not intended to replace salaries, but to reinforce the mutual commitments of employees and the company, by adding to salaries a share in the company's profits and increased value.
It is based on several mechanisms: profit-sharing, incentive schemes and employee savings plans (PEE, employee shareholding, matching contributions, etc.) and collective pension plans (PER Collectif).Profit-sharing and incentive schemes are the two possible forms of employee savings:
- Profit-sharing is paid to employees based on the company's results or performance. The results or performance criteria are determined by the company itself.
It should be noted that profit-sharing is optional and can be set up by any companyAll companies, whatever their legal form, workforce or business sector.
Although optional, profit-sharing schemes must cover all employees.
- Larticipation allows employeesto share in the company's profits..
Elle est mandatory for companiesin companies with over 50 employees, and is optional for other companies.
There are two ways in which the sums allocated under the profit-sharing scheme can be received by the employee:
- throughinvestment in employee savings plansa company savings plan (PEE), a savings plan for collective retirement (PERECO), or an inter-company savings plan (PEI)
- by adirectly into his bank account.
Conditions for withdrawing employee savings
If the employee opts to have the bonus paid into one of the above-mentioned savings vehicles, the sum is blocked for a minimum period of five years. Note that at the end of this blocking period, the sums can be invested in a a time savings account (CET).
How is it implemented in companies?
With a few exceptions, employee savings schemes must be set up by means of an agreement (collective agreement, or by agreement within the CSE, by ratification by 2/3 of the employees, etc.) between the employer and the employees.
Profit-sharing
- Companies with fewer than 50 employees may set up a profit-sharing scheme by unilateral decision, subject to certain conditions.
- The profit-sharing scheme can be set up for a period of between 1 and 5 years. The agreement or unilateral decision must be signed during the first half of the first calculation period. Example: for an annual calculation based on the calendar year, the agreement or unilateral decision must be signed by June 30 at the latest.
Participation
- In the absence of an agreement in companies legally obliged to set up a profit-sharing scheme, the company is subject to a mandatory scheme.
- Companies not subject to profit-sharing and wishing to set up this system must conclude an agreement under the same conditions.
If negotiations fail, companies may decide to unilaterally apply a profit-sharing scheme that complies with legal provisions.
Gerep can help you define profit-sharing criteria in line with your strategic your strategic, economic and social objectives, and negotiate the most appropriate the most appropriate financial allocations with employee savings plan managers