Employee participation is a plan where all employees (exclusive of directors and independent managers) have the opportunity to participate in their company’s capital and profits. This participation can be realised in cash, shares or parts, unavailable for at least two years and for a maximum of five years.   

 

 

Any company, association or institution subject to the tax on companies or non-resident taxation can create a participation plan. Coordination centres, non-profit organisations and other communities are excluded.

 

A participation plan has to be described by a specific collective bargaining agreement. The companies where there is no union representation can also create a participation plan through a specific enrolment procedure (an enrolment act). A participation plan can be introduced only if the company commits to a salary-related collective bargaining agreement for a period equal to the duration of the plan.

 

This specific collective bargaining agreement, or enrolment act, , also ensures that the introduction of the investment plan is not contingent on a decrease in headcount. The plan may not replace or modify salaries, bonuses, perquisites, etc.

 

The total amount of participation in company capital and profits may not exceed the following limits:
- 10% of total gross salaries or
- 20% of after-tax period profits 

 

 

The offer must be made to all employees. The term “employee”, as used in the Law of 22 May 2001 excludes directors and independent managers. The specific collective bargaining agreement or the act of enrolment can introduce a seniority clause of one year maximum.

 

 

The participation plan is mean to increase employee motivation and performance. Employees share in company profits which they have helped to create.