Minimum Wage Increase in France

Minimum Wage Increase in France

France will raise its minimum monthly wage by over €30, what do employers need to know?

On 1 October, France’s minimum wage, known as the Minimum Interprofessional Growth Salary (SMIC) will rise 2.2% to €1,589.47 - from its previous level of €1554.58. The increase is worth around €34.98 per month and means that the hourly wage in France will now be €10.48 (up from €10.25).

Why has France increased its minimum wage?

The minimum wage change is an automatic increase triggered by inflation. France’s national Labour Code has a mechanism to raise the minimum wage when the inflation rate exceeds 2% (in comparison to the previous reference point). France makes a procedural minimum wage adjustment every year on 1 January but this kind of inflation-based adjustment is applied only rarely. France also triggered an inflation-based adjustment on 1 December 2020 (with a 2.1% rise) however, prior to that, the last time the mechanism was applied was 1 December 2011 (a 2.1% rise).

The recent changes to the minimum wage in France reflect the financial turmoil caused by the Covid-19 pandemic and its associated restrictions. The annual adjustment on 1 January 2022 is not expected to be as large as the 1 October 2021 increase because it will be calculated according to the change in inflation between August and November 2021 rather than the previous 12 months.

The minimum wage for public officials will also increase on 1 October.

Who will be affected by the SMIC increase?

The 1 October wage increase will affected around 2.5 million employees in France, accounting to around 13% of employees (that receive salaries) in the country.

While the minimum wage change is intended to address the price rises caused by inflation, some industry observers have pointed out that further adjustments should be considered in order to enhance the living standards in all employment sectors and to address challenges faced by employees in low-wage jobs.

Does the EU impose a minimum wage requirement?

France’s minimum wage is in alignment with the EU requirement that member-states enable employees to “earn adequate minimum wages”. However the EU has also acknowledged that the minimum wage in a majority of member states is “insufficient”: accordingly, in October 2020, the EU proposed a new directive to establish minimum wage standards across the bloc.

Learn more about France's minimum wage requirements, along with important tax and payroll information, in our France Global Insight Page.

In other news...

activpayroll announces 2021/22 results
Carbon reduction plan
Charity Matters