PM Sébastien Lecornu lifts minimum wage 1.6% from December, offers tax breaks

The French prime minister has announced an early rise in the minimum wage from 1 December. The government also plans tax breaks for firms and wants new sector-level pay talks. Prime Minister Sébastien Lecornu wanted to respond to social anger while taking into account employers' concerns. At the end of the "social conference" held on Monday morning at Matignon with representatives of employees and employers, the head of government announced several measures intended to improve purchasing power and encourage pay rises. The main announcement concerns the minimum wage (Smic), which will be increased by 1.6% from 1 December instead of 1 January 2027. It will then reach around 1,502 euros net per month, an increase of 24 euros net a month. A decree will be published shortly. "This is the second biggest increase in the last twenty years" the Prime Minister stressed. "The increase in the minimum wage is not enough but it has a major advantage, it launches a cycle of discussions on pay rises," Sébastien Lecornu explained. The head of government also announced the launch of a "reform project on general reductions" in social security contributions, with the aim of increasing take-home pay. Asked at a press conference about the time considered "wasted" by the government before providing answers, Sébastien Lecornu defended his approach. "I no longer believe in headline-grabbing announcements... I even think they are killing us," he said. "When we stand before the French people, I want to announce things that work. The government is doing everything it can," he added, claiming an approach based on concrete measures rather than rushed announcements. The government wants to reconcile pay rises with business competitiveness To address the concerns of businesses worried about higher labour costs, the government is planning several tax measures in parallel: tax exemption on overtime up to 10,000 euros, exemption from tax on the reimbursement of public transport costs, and a tax break on "value-sharing bonuses". The value-sharing bonus, sometimes called the "Macron bonus", allows companies to pay their staff a one-off bonus to redistribute part of the value created, with a preferential tax and social security regime under certain conditions. "Several chapters have been opened with precise proposals," summed up the head of government, who now intends to make the state the guarantor of mutual commitments between employees and employers. Negotiations will have to continue across the hundred or so professional branches, each of which will be able to discuss its own terms for raising pay. Sébastien Lecornu insisted on the need to make "sincere" commitments, in contrast to the promises he sees proliferating as the presidential election approaches. "The duty of the government, which has no electoral timetable, is precisely to find solutions," he said. Unions unconvinced by the announcements The first reactions from the unions remain cautious. The 1.6% rise in the minimum wage falls well short of their initial demands: the CFDT was calling for an extra 100 euros net a month, while the CGT wanted around 150 euros. Even before Sébastien Lecornu's announcements, the president of the CFTC, Cyril Chabanier, was already saying that the measures under consideration were "not commensurate with the depth of social anger". The CGT, through its general secretary Sophie Binet, is calling for a new major day of strikes and demonstrations on 17 November.