Exceptional bonus and overtime and additional hours

The conditions and procedures for payment of the exceptional bonus

What is this about?

Let's be precise: what exemptions?

Who are the beneficiaries?

• Company directors not bound to the company by an employment contract;
• Employees hired after December 31, 2018 and those whose remuneration is greater than 4,495.41 euros gross.

What can the employer do?

Reserve the exceptional bonus for certain employees:

The employer may decide to pay the exceptional bonus to all employees (those who meet the legal requirements) or reserve it for those whose remuneration is below a ceiling that the employer has set.
For example, the employer may decide that the exceptional bonus will be paid to those employees whose remuneration is less than €3,000 gross.

Adjusting the amount of the exceptional bonus:

The employer may also adjust the amount of the exceptional bonus according to the beneficiaries, based on the following objective criteria: remuneration, classification level, actual attendance during 2018 or the working hours stipulated in the employment contract.

How can this bonus be implemented?

The exceptional bonus can be implemented in two ways:

• Either by unilateral decision of the employer:

In this case, the unilateral decision must be made no later than January 31, 2019 and the employer must inform the staff representatives no later than March 31, 2019.

• Either through a company or group collective agreement:

In this case, the collective agreement must be concluded according to the procedures provided for profit-sharing agreements.

Can an annual bonus or another bonus be replaced by the exceptional bonus?

The legal text expressly provides that the exceptional bonus cannot replace salary increases or bonuses provided for by a salary agreement, an employment contract or the customs in force in the company or, more generally, any element of remuneration.

Reduction of employee social security contributions and tax exemption for overtime and additional hours

What is this about?

As of January 1, 2019, overtime and additional hours will benefit from the following tax and social security advantages:

• The said remuneration will be exempt from income tax, up to an annual limit of
  5,000 euros;
• It will be subject to a reduction in social security contributions, relating only to employee social security contributions for old-age insurance and supplementary retirement.

The effective application of the reduction in social security contributions is, however, subject to the publication of a decree setting, in particular, the reduction rate that will be applied.

Let's be precise: what remuneration?

• The remuneration, including any applicable increases (at the legal or contractual rates), for the following elements:
• hours worked beyond the statutory weekly working time of 35 hours or, for employees who have entered into an annual hours-based fixed-rate agreement, hours worked beyond 1607 hours;
• where applicable, overtime hours calculated at the end of the reference period in the event of implementation of a working time arrangement system over a reference period exceeding one week;
• for employees who are subject to a fixed-day work arrangement, the remuneration for days worked beyond said fixed day;
• additional hours worked by part-time employees.

Employment Law – Arst Avocats presents its update on the law of December 24, 2018, which sets out the conditions for tax and social security exemptions on the so-called exceptional bonus and overtime and supplementary hours. Note on the exceptional bonus_00475845 Download