Law No. 2011-894 of 28 July 2011 establishes the premium profit sharing, also known as bonus dividends.It is imposed on companies whose dividends are up, to open negotiations with the representatives of their employees in order to establish a premium for their benefit.

Eligible companies

This premium is required for all trading companies of 50 employees, who distribute the amount of dividends per share is higher than average dividends per share paid for the previous two years.part of which is given in return for increased dividends for the current year, are not subject to the payment of the premium.Businesses that employ fewer than 50 employees and whose dividends are up, compared to the average of previous two years, may voluntarily submit to the device.

profit

The law does not floor or ceiling on the amount.However, the premiums paid are exempt from social security contributions up to a maximum of 1,200 euros per employee per year.However, they will be subject to the CSG-CRDS and social package, or up to 14%.

The amount of the premium and the manner of distribution among employees are freely determined by the companies. It can be uniform or modulated according to the salary and time spent in the company.

Methods of implementation

The bonus dividend is to be established by agreement through an agreement or collective labor agreements, by agreement between the employer and representatives of trade unions representing the company,by an agreement within the Committee of company or as a result of the ratification by a majority of two thirds of staff, a draft contract proposed by the employer.The agreement must be concluded within three months of the general meeting deciding the allocation of dividends. For 2011, the law requires companies to enter into an agreement establishing the special bonus before October 31, 2011.Failing an agreement with unions, it can be implemented unilaterally by the employer after consulting the works council or, failing that staff representatives,The officers concerned who would not engage in negotiations to conclude an agreement will be criminally punished by one year imprisonment and a fine of 3750 euros.

What to remember

-The amount of the premium and the manner of distribution among employees are freely determined by the companies.

Premiums are exempt from social security contributions up to a maximum of 1200 euros per employee per year, but will be subject to the CSG-CRDS and social package.