The conditions for easing the exceptional purchasing power bonus have just come into force.

In the midst of the health crisis, the government decided to relax the exceptional purchasing power bonus (PEPA) scheme in order to take into account the particularly difficult working conditions for employees who cannot work from home and who are exposed to the COVID-19 risk.

An order no. 2020-385 of April 1^st, 2020 thus came into force as of its publication on Thursday, April 2^nd, 2020.

 

Which conditions have been changed?

• On the existence of a profit-sharing agreement to be the condition for the PEPA

The Order requires no longer the existence or conclusion of a profit-sharing agreement in order to be able to pay the PEPA to employees.

However, for companies wishing to conclude such an agreement for a period of between 1 and 3 years, the profit-sharing agreement must be concluded before 31 August 2020 (as opposed to 30 June initially).

Also, from now on, the agreement can be concluded as of the 1st day of the 2nd half of the calculation period following its taking effect (initially, the agreement was to be concluded during the 1st half of the financial year);

As an example, for a company with a fiscal year based on the calendar year and wishing to conclude an agreement for the 2020 fiscal year:

- Previously, it had to conclude a profit-sharing agreement before June 30, 2020.

- With the Order, it can conclude the agreement after that date until August 31, 2020.

The Order also opens up the possibility for associations and foundations recognized as being of public utility to be able to pay the PEPA.

 

• On the limit of the PEPA

The amount of the bonus exempt from social security contributions and personal income tax now depends on whether or not there is a profit-sharing agreement.

The bonus is exempt up to the amount of :

- 1,000 € maximum for companies without a profit-sharing agreement

- 2,000 € maximum for companies which concluded a profit-sharing agreement by the time of bonus payment

 

• On the beneficiaries of the PEPA

The exceptional bonus is granted to the employees working under a contract of employment with the company, to temporary workers placed at the disposal of the using company or to public employees working for the public establishment on the date of payment of the bonus.

The order adds that from now it is also paid to all employees who are on the payroll on the date of filing of the company's agreement or the signature of the unilateral decision.

 

• On the criteria for granting the PEPA

Companies may adjust the amount of the PEPA on the basis of four criteria, which, in principal, may be combined with each other: level of qualification or classification, salary, duration of effective presence over the last 12 months and contractual duration of work.

The Order added a fifth criteria: companies can now adjust the amount of the bonus in order to  take into account the conditions of work related to the health crisis, and thus encourage the  employees who have continued to work in their workplace under the difficult conditions (e.g. cashiers, handlers, delivery personnel, etc.).

 

• On the PEPA payment date

 

The bonus can be paid until 31 August 2020 (compared to 30 June 2020 initially).

Finally, it is important to point out that this measure can also be applied to the companies that have already paid a bonus. Thus, these companies will be able to exceed the amount of €1,000 up to a maximum of €2,000 if they have a profit-sharing agreement concluded. In the absence of a collective agreement on this subject, a new unilateral decision will have to be signed by the employer.

 

Ordinnance link: https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000041776879&categorieLien=id

 

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