French Parliament Adopts the Social Security Financing Act for 2026

Certain provisions of the Social Security Financing Act for 2026 will have a financial impact on companies and will encourage companies with more than 300 employees or of community (Europe/European Economic Area) size to negotiate on senior employment.

KEY POINTS

• The French Parliament has adopted the Social Security Financing Act for 2026, which will, for the most part, generate additional costs for companies.
• The Social Security Financing Act for 2026 also creates a new mechanism to speed up recognition procedures for occupational diseases and establishes an additional paid birth leave.

MAIN PROVISIONS AND CHANGES

Employer Contributions

The specific employer contribution on severance payments by mutual agreement and on employer-initiated retirements is increased from 30% to 40%. The initial plan to merge this contribution with the social flat-rate charge was abandoned. A penalty on old-age and widowhood contributions is introduced for companies with at least 300 employees or of community size that employ at least 150 employees in France and that do not negotiate or apply an annual plan on senior employment, in accordance with the act of 24 October 2025. The level of the penalty will be set by decree.

To encourage upward revision of minimum wages defined at industry-level, the calculation of the general reduction in employer contributions will be based on minima that are below the statutory minimum wage rather than on the statutory minimum wage defined at the national level. This measure will apply only to industry where the minimum remains below the statutory minimum wage for the entire year, with implementation details to be specified by decree.

Finally, a measure favorable to companies extends the flat-rate deduction of employer contributions on overtime hours, previously reserved for companies with fewer than 250 employees, to companies with 250 employees and more, in effect since January 2026, at a rate of €0.50 per overtime hour.

Regulation of Sick Leave and Indemnity Periods

The act tightens regulation of the duration of sick leave. Decrees will now set ceilings of one month for an initial sick leave and two months for a renewal. Doctors may nevertheless deviate from these ceilings by justifying the necessity on the prescription.

For work accidents and occupational diseases occurring after January 1, 2027, payment of daily allowances will be capped at a maximum duration to be set by decree. The government had considered a period of four years while currently no maximum duration exists for work accidents and occupational diseases.

Changes to the Procedure for Recognizing Occupational Diseases

A disease is presumed to be of occupational origin when it is listed in one of the 102 occupational disease tables annexed to the Labor Code and when all the conditions of that table are met, including the time limit for coverage, the duration of exposure to the risk, and the limited or indicative list of tasks exposing workers to the disease.

When one of these conditions is not met, the presumption of occupational origin no longer applies and recognition requires an individual expert procedure with mandatory referral to a Regional Committee for the Recognition of Occupational Diseases, known as the CRRMP.

The act establishes a new procedure, distinct from the CRRMP, for diseases listed in a table when only the condition relating to the time limit for coverage is not respected. In that case, the file may be submitted to a panel composed of at least two medical advisers, charged with issuing a binding opinion for the National Health Insurance Fund on whether the disease is of occupational origin.

This new mechanism should accelerate recognition procedures for occupational diseases and will therefore have financial consequences for companies whose gross negligence is recognized. Gross negligence of the employer is recognized when the employer knew or should have known of the danger to which the employee was exposed and failed to take the necessary measures to protect them.

This measure will come into force no later than January 1, 2027.

Tougher Sanctions for Undeclared Work

The surcharge rates on social contributions applicable in cases of undeclared work, when found in procedures initiated from June 1, 2026, will be raised from 25% to 35%. This surcharge will also affect contracting parties who use service providers committing the offense and who failed to respect their duty of vigilance.

Creation of an Additional Paid Birth Leave

The act introduces a new paid birth leave of one or two months, which may be split into two periods of two months for each parent of children born or adopted from January 1, 2026. This leave will apply after exhaustion of rights to maternity, paternity, child welcome, or adoption leave. It will be paid as a daily allowance by Social Security on condition of ceasing all professional activity. The allowance is set at 70% of net salary for the first month and 60% for the second month.

The leave will be available from July 1, 2026. Parents of children born or adopted between January 1–May 31, 2026 may use their rights until the end of 2026.

CONCLUSION

In essence, the act creates additional costs for companies, including the increase in contributions on severance by mutual agreement and employer-initiated retirements, tougher sanctions for undeclared work, and penalties for failures regarding obligations on senior employment.