You can shift the payment of incentive and profit sharing of employee

In order to preserve the cash flow of companies, the order no. 2020-322 of March 25th , 2020 allows them to shift the payment of incentive and profit sharing of employee.

The labour code stipulates that the payment of both incentive and profit sharing of employeemust be made no later than the last day of the 5th month following the end of the financial year. Thus, for example, for a fiscal year ended on October 31st, 2019, participation or interest must be paid by March 31st, 2020. After this period, a late interest is due to the employees.

In derogation from these provisions, the deadline for payment to beneficiaries or allocation to a salary savings plan or a blocked current account of funds allocated in 2020 under an incentive or profit sharing of employee  plan is extended to December 31st, 2020.

Thus, if we take the previous example, the company will have until December 31st, 2020 to allocate the amounts due for incentive and profit sharing of employee instead of March 31, 2020 as usual.

Of course, the payment being legally delayed will not result in surcharge for late payment (equal to 1.33 times the average rate of return on private company bonds).


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