As of January 1, 2024, the SMIC (Salaire Minimum Interprofessionnel de Croissance) increased by 1.13%, reaching €1,398.69 net per month for an employee working 35 hours per week (151.67 hours per month). This is the 6th increase in the minimum wage since early 2022.
Re-evaluated SMIC: Increases Impacting Payroll Services
These successive increases have significantly impacted payroll services and the configuration of payroll software, as they influence numerous calculation factors, particularly the legal calculation methods for apprentice or professionalization contract wages, but also the calculation bases for the general reduction in contributions (formerly Fillon), to name just a few examples.
In parallel, there is another impact of these SMIC increases on employee remuneration methods, linked to the concept of the collective bargaining minimum wage (SMC): indeed, applying the SMIC is one thing, but companies must also apply the minimum wages defined by collective agreements, provided they are naturally members of a collective agreement, which concerns 15.8 million private sector employees in France. In addition, the application of these collective bargaining minimums must be carried out subject to SMIC compliance: with each SMIC increase, it is mandatory for every company to verify whether the lowest classification levels of the collective agreement to which it adheres have not fallen below this amount. If this is the case, the SMIC amount must prevail until an amendment to the collective agreement has re-evaluated the minimums. This systematic comparison should, ideally, be configured as standard in the payroll software; otherwise, it will result in an additional control and manual override burden for payroll managers during each monthly payroll calculation.
Social Conference: Revision of the Salary Scale for Several Professional Sectors
On October 16, 2023, during the Social Conference, several measures were announced to compel professional sectors with one or more collective bargaining minimums below the SMIC to revise their salary scales. The Ministry of Labor then counted 60 such sectors, about ten of which had salary scales that were “structurally” non-compliant. All sectors in this situation were to be summoned by the Minister “to explain their delay,” and, if no “significant progress” was visible by June 1, 2024, the government would be called upon to submit a bill allowing social security contribution exemptions to be calculated not on the basis of the SMIC, but on the basis of sector minimums for those not in compliance, leading to a potentially significant loss in terms of the effect of the RGCS (formerly Fillon) for the companies concerned, as well as a subsequent configuration burden for payroll services.
A first assessment of these announcements was made at the end of the year: as agreed, a letter was indeed sent by the Minister of Labor Olivier Dussopt to all social partners in the concerned sectors, i.e., 39 out of the 171 sectors identified as of November 17 (the day the letters were sent), compared to 60 on the day of the Social Conference. Some of them (the number of which was not communicated by the Ministry) will be received by the Minister, his Cabinet, or the General Directorate of Labor by the end of January 2024, and they will have to specify the actions they intend to implement to achieve compliance.
The professional sectors concerned are as follows:
| Sector ID (IDCC) | Sector Name | Number of Employees |
| 2098 | Third-Party Service Providers | 179,100 |
| 1396 | Processed Food Industry | 49,500 |
| 1383 | Hardware (Retail) | 22,800 |
| 1557 | Sports Equipment & Leisure (Retail) | 70,200 |
| 303 | Couture Paris Region | 8,900 |
| 2264 | Private Hospitalization | 281,500 |
| 1631 | Outdoor Hospitality | 13,100 |
| 1391 | Airport Handling & Cleaning Paris Region | 5,700 |
| 2089 | Wood-Based Panels | 5,000 |
| 2372 | Direct Distribution | 27,000 |
| 1794 | Supplementary Retirement Institutions | 29,400 |
| 2060 | Cafeterias | 12,100 |
| 2257 | Casinos | 14,300 |
| 2366 | Young Workers’ Hostels | 5,900 |
| 44 | Chemical Industry | 225,800 |
| 2156 | Department Stores and Popular Stores | 34,300 |
| 500 | Clothing Haberdashery | 17,500 |
| 1760 | Garden Centers & Seed Stores (Wholesale) | 19,400 |
| 454 | Ski Lifts | 13,400 |
| 1411 | Furniture Manufacturing | 37,500 |
| 1285 | Artistic and Cultural Enterprises | 27,000 |
| 2272 | Sanitation and Industrial Maintenance | 13,300 |
| 2002 | Laundry | 33,700 |
| 1947 | Timber and Derivatives Trade | 7,400 |
| 1606 | DIY | 85,000 |
| 1486 | Technical Consulting Firms | 1,122,700 |
| 45 | Rubber (Industry) | 48,200 |
| 3236 | Nautical Industry and Services | 14,000 |
| 1611 | Direct Communication Logistics | 7,900 |
| 3216 | Building Materials Trade | 75,800 |
| 2190 | Local Missions and PAIO | 14,000 |
| 1492/3238 | Paperboard Production (OEDTAM) | 20,200 |
| 1495/3238 | Paperboard Processing (OEDTAM) | 20,200 |
| 759 | Funeral Services | 24,400 |
| 3017 | Ports and Handling | 15,900 |
| 1909 | Non-Profit Tourism Organizations | 13,800 |
| 1413 | Temporary Work (Permanent Employees) | 44,000 |
| 1534 | Meat (Wholesale Industry & Trade) | 45,600 |
| 1710 | Travel (Agencies) | 28,900 |
(To assess this compliance, only the lowest salary scales are considered, not various bonuses).
Furthermore, among the recalcitrant sectors, 11 of them have been summoned to joint parity commissions, in the presence of a representative from the Ministry of Labor as permitted by article L.2261-20 of the Labor Code, which helps to overcome certain blockages or difficulties.
Measures to Compel Less Compliant Sectors
Beyond these consultation actions, more coercive measures are clearly being considered by the government for the less compliant sectors:
- The purchasing power law of August 16, 2023, and the decree of February 14, 2023, now allow the Ministry of Labor to administratively merge one sector with another if a weakness is observed in the former regarding the number of signed agreements or amendments, particularly those ensuring a national professional minimum wage at least equal to the SMIC, and the number of negotiation topics covered. One sector has been identified by the Ministry of Labor as meeting these criteria, that of casinos, which had nevertheless been alerted twice, in May and October. The merger procedure has therefore been initiated. This procedure was also initiated for the casino sector (procedure initiated by a letter from the Ministry of Labor dated May 16).
- Finally, regarding the sanction that could be implemented as early as June 2024, as announced by the Prime Minister during the social conference, namely a calculation of social security contribution exemptions not based on the SMIC, but on the sector minimum for those not in compliance, the idea is still in the pipeline. It will then be necessary to find an appropriate legislative vehicle, according to the Minister of Labor’s office.
A New Assessment to Come
A new assessment of the actions undertaken since the social conference was due to be made on December 11 during the meeting of the monitoring committee for sector wage negotiations. It will also provide an update on negotiations concerning classification grids. Indeed, the ANI on value sharing, and then the law that transposed it – still awaiting publication in the Official Journal – provides for a negotiation “with a view to examining the need to revise classifications, taking into account the objective of professional equality between women and men and job diversity.” These negotiations must be opened before December 31, 2023, in sectors that have not carried out this examination for more than five years.
The impact of SMIC increases, which are automatically calculated based on inflation, undoubtedly weighs on the hierarchy of minimum wages in collective agreements and risks significantly impacting payroll services during 2024, both due to the obligation of manual override and control for companies covered by currently non-compliant agreements, and due to the risks of sector mergers or changes to the rules for calculating various forms of social security contribution exemptions, which will heavily burden monitoring and updating activities for payroll tools in light of new rules (configuration, testing, etc.).
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