Changes As Of 1 January 2021: Increase Of The Minimum Wage And Provision Of Financial Assistance To Companies

Changes as of 1 January 2021: increase of the minimum wage and provision of financial assistance to companies

Minimum Wage Increase

The Act of 15 December 2020 amending article L.222-9 of the Labour Code comes into force on 1 January 2021.
The new legal provisions increase the minimum wage by 2.8%:

  • raising unskilled employees’ minimum monthly wages from EUR 2,141.99 gross to EUR 2,201.93 gross; and
  • raising qualified employees’ minimum monthly wages from EUR 2,570.39 gross to EUR 2,642.32 gross.

The index applicable to employees’ wages (834,76) remains however unchanged.

Financial aid granted to certain companies to offset the minimum wage increase

The Act of 19 December 2020 providing financial assistance to companies to compensate for the minimum wage increase comes into force on 1 January 2021.

This financial support benefits companies operating in sectors severely affected by the Covid-19 pandemic and whose financial situation renders the legally required wage increase difficult to put into place. This lump-sum subsidy may be allocated to companies operating in the defined sectors for each employee hired before the minimum wage increase and whose monthly gross salary on 1 January 2021 ranges between EUR 2,201.93 (i.e. the new minimum wage) and EUR 2,642.32 (i.e. the new qualified minimum wage).

The tax-free subsidy, capped at EUR 200,000 per company, amounts to EUR 500 per eligible employee and is granted for one month only falling between 1 January 2021 and 30 June 2021.

Companies are free to choose the month for which they wish to benefit from the subsidy during said period.

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