Employer's unilateral decision (France, DUE)

Article L. 911-1 of the French Social Security Code provides that collective supplementary social protection benefits are established by one of three instruments: a collective agreement, a draft agreement proposed by the employer and ratified by a majority of employees in a ballot, or a unilateral decision by the employer recorded in a document handed to each employee. The unilateral decision is the most common route in small and medium-sized companies, for lack of a union delegate. The choice of instrument is not a formality: it determines the social security and tax treatment of employer contributions, exempt from social charges within certain limits if the plan is collective and mandatory. It also determines the membership exemptions open to employees. A unilateral decision cannot impose an employee contribution on staff present when it is introduced who refuse it. And it cannot be freely changed or withdrawn: the employer must terminate it by informing employees and staff representatives individually, with sufficient notice. For the insurer or broker, the founding instrument is part of the underwriting file: a poorly established plan exposes the company to a social security reassessment and the benefits to challenge.