CWS 3.0: December 15, 2010 - Vol 2.24

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Behind the News - France: Senior Worker Decree

 France is making an effort to have its companies employ older workers. Here's why. The employment rate in France for people aged 55 to 64 years was only 38.9 percent in 2009; the European Union's target for this age group is 50 percent by the end of 2010. The employment rate for this age group in Sweden and Norway, meanwhile, is 70 percent.

Against a backdrop of an aging workforce and the fact that France has the highest life expectancy in Europe, France came up with the Decree of 20 May 2009. The legislation requires all companies employing more than 50 people to be covered by an industry-wide agreement promoting the employment of older workers. In the absence of an agreement, they must conclude their own collective agreement or, failing that, develop an action plan in favor of the employment of workers older than 50. The Decree also requires all companies with 300 or more employees to be covered by a collective agreement or, if such an agreement could not be reached, by an action plan presented by the employer.

Companies that don't comply with this regulation were already taxed for a special retirement contribution, amounting to one percent of the total costs of their payroll.
This legislation has had some positive effects. A recent study by the Swedish consulting firm Mercuri Urval, which polled a representative sample of firms, shows that 51 percent of companies have been working their way toward a corporate agreement on the employment of older workers and 42 percent have a definite action plan.

Further, the study's author notes that even if the majority of companies say they have not changed their outlook on employing older workers because of the decree, the legislation has forced many to implement these measures.
Numbers notwithstanding, companies with operations in France, or looking to expand there, should do their research. Having a compliance expert in France will help you deal with any teething issues around this legislation. Your research, combined with an expert's opinions, should help you stay current with any changes in the law.

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