Under French employment law, employers are generally free to determine the remuneration package to be provided to their employees in accordance with the working of the free markets. However, such liberty is traditionally limited in particular by the principle of equal work for equal pay and the obligations relating to minimum wage.
In this respect, the principal employees’ right is the minimum wage required by law and which extends to all adult employees in France for all sectors of activity. Basically, such minimum wage is a minimum hourly salary below which no employee can be remunerated and is currently fixed at 9,61€ gross per hour (i.e. approximately 1,450€ gross per month for a full-time employee) for 2015. However, it is not always sufficient that the global amount of employees’ remuneration attains such level of pay as there are specific rules for determining if the employee is actually paid at the minimum wage. It is generally held that the components of compensation taken into account to ascertain if the minimum wage has been paid include only those components remunerating actual work performed (seniority and attendance bonuses therefore generally being excluded from the scope of comparison). Similarly, the reimbursement of professional expenses is also excluded although benefits in kind are taken into account.
Such rules are not to be taken lightly since breach thereof is punishable by a fine of up to 7,500€ and could also result in damages being due and claims for back pay being made by the relevant employees. In addition, failure to pay the minimum wage could also entitle the employees to invoke a constructive dismissal with the same consequences as unfair dismissal.
The legal minimum wage is however not the only provision that can impose a minimum on the remuneration fixed by employers since the collective bargaining agreement applicable to the employing entity usually contains provisions imposing a minimum monthly remuneration for each type of position / category of employees. In this context, the amount of minimum remuneration varies depending on the collective bargaining agreement and, under the collective agreements themselves, on the classification of the employee concerned.
Therefore, if the level of remuneration under the collective bargaining agreement is higher than the legal minimum wage, employers are required to comply with the wage fixed by the collective bargaining agreement. As is the case with the statutory minimum wage, and in the absence of any contractual specifications to the contrary, it is the remuneration paid in return for the employees’ work or in the context thereof that should be equal to the conventional minimum wage. Any employer which does not pay its employees the minimum conventional wage would be subject to the same sanctions as those applicable to the statutory minimum remuneration except that the fine is capped at 3,750€.