1 September 2023: new social security regime for compensation in the case of approved termination of employment by agreement (so called “rupture conventionnelle homologuée”)- Flash news
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. Employees entitled to a retirement pension are no longer exempt from lump-sum social security contributions but can benefit from the same exemptions from social security contributions and CSG/CRDS as other employees. This new unified system applies to terminations of employment contracts with an end date after 31 August 2023.