We are talking about a “woolen sock” which concerns 9 to 10 million employees in France according to Dares, or one in three employees. Here is the double penalty : we are going on a white year followed by an empty year and, on the capital side, the portfolio is melting like snow in the sun.
Why a white year on payments? Because the ordinance adopted Thursday March 25 authorizes the employers to postpone payment of profit-sharing and participation bonuses to December 31 of this year. Usually, this is when we touch them.
The idea, as we have understood, is to reduce the cash flow of companies. But that means that we received our last premium in April-May 2019 and that we are likely to touch the next one in December 2020. It’s been 18 months without a bonus: that’s what I call a white year.
In 2021, the “cold shower”
The sum will not be less important. The good news is that the amount which was planned for the 2019 financial year will be maintained even if we find ourselves in the middle of an economic crisis. Because we are talking about the results for 2019, which was a pretty good year for companies.
And besides, with the government’s Pacte law which simplified this procedure, you have many SMEs and very small businesses which have been able to set up a system of employee savings. We have seen the number of beneficiaries increase for example 3% with almost 20 billion euros distributed to employees.
But in 2021, it will be a cold shower: the premiums will be based that year on business performance in 2020. But we all understand that we are going to have a dark year in which no objective is reached, and societies will above all strive to stay alive.
“As long as we haven’t sold, we haven’t lost”
Because this money is used a lot by the French. As such, employee savings will be essential to restart consumption and the real estate market for example. In 2018, according to the French Association for Financial Management, 161,000 households released their employee savings to finance personal projects, including the purchase of a house. They unlocked an average of 11,900 euros, which is not negligible on a contribution or works.
The concern is that, often, this employee savings is invested in shares while, at the moment, stock markets tumble since January : the employee savings portfolio is really an emotional lift. Especially since 55% of employees actually choose dynamic travel profiles. That is to say the risky investment widely invested in the stock market.
And since the start of the crisis, employee savings portfolios lost between 15 and 20% of their value on average. So forget this money for now and don’t unlock this savings. Instead, take out a bank loan if you need to do some work and repeat the old adage: “As long as we haven’t sold, we haven’t lost”.