Minimum Wage in France – Frequently Asked Questions

Is there a separate legislation relating to minimum wages in France?

Legislation concerning minimum wages is present in the French Labour Law (Code du travail) in Article L3231 et seq. In France no employee aged 18 or over can be paid below the minimum wage (exceptions only for underage employees, trainees and disabled workers). The minimum wage was first called SMIG (Salaire Moyen Interprofessional garanti - guaranteed cross-sectoral minimum wage). The legislation was passed in February 1950. Until 1970 the SMIG was indexed to prices. But as productivity and wages were increasing rapidly during the "Trente Glorieuses" (Glorious Thirty: 1945-75) the difference between the SMIG and the average wage became bigger and bigger and the number of workers receiving the minimum wage was decreasing. As a result the SMIG was no longer relevant and in 1970 the SMIG became the SMIC ; with a "C" at the end for "Croissance" (Growth). The SMIC not only takes into account purchasing power but also includes the worker's participation in the economic growth in the country through the consumption of diverse goods and services.

Do one or more minimum wages exist that is/are determined by law?

Young people under 17 years old with less than 6 months of professional practice can be paid 80% of the legal minimum wage between 16 -17 years of age and 90% between 17-18.

Young students on apprenticeship contracts are getting a wage which may vary between 25% and 78% of the SMIC in accordance with their age and the number of years working for the employer.

Young people do not get any wages for a work experience at all but may be given an expense allowance. Nevertheless this allowance is compulsory by law for a work experience of more than 2 consecutive months. The amount of this allowance is 420 Euros for a month in 2013.

Part time workers cannot receive a wage less than the hourly SMIC.

At what level are minimum wages determined at?

Many Workers are covered by a collective bargaining agreement. Union representatives and employers are legally required to meet at least once a year to enter into negotiations on wages. The negotiations may result (not compulsory) in a negotiated minimum wage which will be applied only if it’s greater than the SMIC. A reduced rate can be applied in certain cases, especially for apprentices.

On what basis is minimum wage calculated?

The SMIC is an hourly wage. Since February 2000 French employees work 35 hours a week (further working time is considered as overtime). The minimum gross wage is €9.43 per hour which translates to €1,430.2 per month.

Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?

a) The French SMIC is reviewed in two different ways: 1) it increases every year automatically independently of the government. 2) Each government can decide exceptional increases called "coups de pouce" (a bit of help). b) The "commission supérieure des conventions collectives" (Higher Commission for Collective Agreements) made up of government representatives, employees, employers and family associations gathers annually to submit an opinion on determining the minimum wage. c) Conventional minimum wages can be set in every sector and branch during bargaining processes between employees represented by trade unions and employers. The amount of the conventional minimum wage is written in the Collective Agreement. It can happen that the conventional minimum wage is less than the SMIC and in this case employers are bound by law to pay a minimum wage equal to the SMIC. If the negotiated salary exceeds the SMIC, employers subject to a collective agreement are obliged pay the conventional minimum wage. Collective bargaining is compulsory by Law when a company includes at one union representative. In this case employee’s representatives and employers are obliged to meet annually to discuss wages. Please note that they are obliged to meet but not to come to a result regarding the conventional minimum wage (in this case the SMIC will apply).

How are upratings (adjustments) of minimum wage/s decided upon?

The SMIC increases automatically on January 1st every year depending on inflation + half of the average salary of workers for the past year. An autonomatic increase occurs if inflation gets above 2% in the middle of the year.

Which are the components of minimum wage in France?

There are 3 key components : indexation to the past annual change in the consumer price index / indexation to half of the real annual increase in the basic hourly wage rate of blue collar workers (the SHBO in French) / The government may also decide to implement discretionary increases (coups de pouce).

How frequently is the fixed component of minimum wage updated?

The level of SMIC increases automatically on January 1st every year. The government may also decide to implement discretionary increases (coups de pouce).

What is/are the yardstick/s on which minimum wage upratings are based?

Adjustments of the statutory minimum wage depend upon four indicators: - the rise in the consumer price index - whenever inflation goes up by more than 2% within a year (in that case, the adjustment takes place immediately and automatically); - half of the buying power improvement as regards the gross hourly earnings in the manufacturing industry (salaire horaire brut moyen ouvrier); - the government's annual reviews (or the so-called ‘coup de pouce’) becoming fewer and rare.

What is the national poverty line? (In national currency)

The national poverty line is 954. In France and in Europe the poverty line is set relatively to another indicator. An individual can be considered poor if his/her monthly income is less than 814 or 977 Euros (data for 2011) according to the definition of poverty used: threshold set to 50% or 60% of the median standards of living. Generally the poverty line is set to 50% or 60% of the median standards of living. The income taken into account is the disposable income: after taxes and social benefits. Poverty line in France is set to 60% of the median income.

How often is poverty line updated?

Poverty line is automatically and immediately comparable to the median standard of living.

What is the percentage of minimum wage relative to the current poverty line?

The percentage of minimum wage relative to the current poverty line is 0.85%

What is the incidence of minimum wages(s) in the national labour force (wage earners only)?

In France 13% of employees earn the minimum wage. The SMIC is relatively high (2nd place in the OECD countries). This situation makes the labour costs higher in France than in other countries. Employers are hesitant to hire additional staff when the productivity (for low-skilled labour) is less than the cost of the SMIC. This may explain the high level of youth unemployment in France. The high level of the SMIC justifies the fact that some low-skilled jobs tend to disappear in France: gas station attendants, car washers, park wardens ... The minimum wage prevents the creation of jobs with low value added which could reduce especially unemployment of low skilled workers, including young people. Some economists advocate for the establishment of lower a minimum wage for younger adult workers.

How is minimum wages compliance regulated?

Staff representatives are responsible for filling individual or collective claims regarding wages and the application of the collective agreements inside a company or non-compliance with minimum wage law. They can refer the case to the labour inspector for non-compliance with the SMIC or non-compliance with the collective agreement wages. (Article R3233-1, Labour Law)

Which legal sanctions can be applied in compliance is lacking?

The employee should be compensated by the employer. The employer is fined €1500 and €3000 for any subsequent offence for each proven infraction regarding the payment of the SMIC. (The legal sanctions are 5 times higher if the employer is a legal person).

Are sanctions often being applied?

Sanctions are applied. An example is the case of Carrefour (France leading mass retailer). In October 2008, the company was fined 1.287 million for having paid 400 employees for several years less than the statutory minimum wage in two hypermarkets. In November 2010, the company was sentenced by the Tribunal of Grenoble to pay nearly €400 000 of wage arrears to more than one hundred employees working in a Carrefour hypermarket in the Isere Department for the same reason (non-compliance with the SMIC).

Are employer and/or trade union representatives involved in compliance procedures?-- Staff representatives are responsible for filling individual or collective claims regarding wages and the application of the collective agreements inside a company.

To whom/Where can individuals complain, if they think they are earning less than minimum wage?

Individual can complain to Employer/management. Contractor or to labour inspector or to trade unions Which month of the year is minimum wage rate revised in France? -- The SMIC increases automatically every year on January 1st.