French Prime Minister Dominique de Villepin has announced that payroll taxes for workers earning the minimum wage at small companies will be eliminated next year, in an effort to reduce the constraints that hinder job creation.
Villepin's proposal targets firms employing fewer than twenty workers, and those receiving the minimum wage will be exempted from payroll tax from July 1, 2007.
The Prime Minister reportedly told a briefing in Troyes that the measure would be "both useful for employment and fair in regards to these companies’ constraints".
The current tax on the minimum wage is currently 2.1% of gross salary, according to the Labour Ministry.
Villepin has also pledged to raise the minimum wage, which currently stands at EUR1,254 (US$1,600) per month, and double the tax credit received by minimum wage employees from next year.
Meanwhile, Labour Minister Jean-Louis Borloo has announced additional incentives for companies that hire workers, such as a grant to companies which commit to employing workers on state-funded training schemes, and a pledge to pay non-profit organisations taking on workers over the age of fifty who no longer receive unemployment benefits.
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