Structural reformIn effectEmployment and contributionsNational

Creation of the overseas employer contribution exemption scheme of Article L. 752-3-2 (Lodeom)

Article 159 of the 2009 Finance Act creates Article L. 752-3-2 of the Social Security Code. In Guadeloupe, French Guiana, Martinique, La Réunion, Saint-Barthélemy and Saint-Martin, eligible employers (firms with ten employees or fewer, listed sectors such as construction, industry, tourism or agriculture, certain transport companies) are exempt from employer social insurance and family allowance contributions. The exemption is full up to 1.4 times the minimum wage, then decreases to zero at 3.8 times. An enhanced scheme (full up to 1.6 times, zero at 4.5 times) covers firms with fewer than 250 employees and turnover below €50 million in certain sectors or territories. The previous scheme of Article L. 752-3-1 is limited to Saint-Pierre-et-Miquelon.

Measure originators

InitiatorGVT

Christine Lagarde

Gouvernement

InitiatorGVT

Éric Woerth

Gouvernement

Impact on public finances

Brings in 138 m €/yr2009 estimate · State

Source of the estimate: Sénat, rapport général n° 99 (2008-2009), annexe 18 « Outre-mer », examen de l'article 65 rattaché (Indirect official figure)

A positive amount is revenue or savings for public finances; a negative amount is a cost or lost revenue.

Effective date

1 April 2009

Measure impact

Employers in the overseas departments, Saint-Barthélemy and Saint-Martin move to a new wage-based degressive employer contribution exemption, applicable to pay due from 1 April 2009. The benefit requires compliance with filing and payment obligations and is excluded after a conviction for undeclared work or tax fraud. The scheme was later refocused several times.