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Labor law

1 September 2023: new social security regime for compensation in the case of approved termination of employment by agreement (so called “rupture conventionnelle homologuée”)

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Law no. 2023-270 of 14 April 2023 on the amended funding of social security for 2023

Compensation for termination of an employment contract by mutual agreement is now subject to a single employer social security contribution of 30%, whether or not the employee is entitled to a retirement pension. Gone, therefore, is the flat-rate social security contribution of 20% (so called “forfait social”) payable by the employer where the employee was not entitled to a retirement pension.

The new single contribution applies to terminations of employment contracts with an end date after 31 August 2023.