The Revaluation Of The Smic: How Does It Work?
On January 1, 2023, the monthly amount of the Smic will increase to €1,709 gross for 35 hours per week, or an hourly rate of €11.27. This automatic revaluation on January 1 follows several increases in the minimum growth wage during 2022. If you are wondering how the minimum hourly wage increases are calculated, read on for an explanation! We will detail how the revalorisation of the SMIC works.
A legal minimum wage
As a reminder, the SMIC or salaire minimum interprofessionnel de croissance is the legal minimum hourly wage in France.
This means that every employee over the age of majority must receive at least this wage and that the employer can be fined and ordered to pay damages to the employee if he pays him a lower wage.
It should be noted, however, that discounts may apply to apprentices and employees under the age of 18.
In addition, the net amount on your pay slip may be less than the net monthly amount of the SMIC because contributions are deducted by your company, particularly for your provident fund.
Three methods of revaluation
In France, there are three ways to revalue the SMIC:
- the legal increase on January 1
- possible increases during the year
- an exceptional increase in the event of a boost from the government.
As the minimum wage is indexed to inflation and the average wage, it is automatically revalued each year on January 1.
More specifically, this calculation takes into account:
- inflation for the 20% of households with the lowest incomes.
- Half of the gain in purchasing power of the basic hourly wage for workers and employees (SHBOE).
In addition, if the consumer price index increases by at least 2% compared to the index observed when the amount of the SMIC last changed, the minimum growth wage is automatically increased in the same proportions during the year.
Finally, the government may decide at any time to increase the minimum wage to give a boost to French purchasing power.
Revalorizations during the year 2022
It should be noted that no boost has been decided by the government since July 2012. However, due to inflation, the amount of the minimum growth wage was mechanically revalued during 2022.
The SMIC thus experienced:
- a legal increase of 0.9% on January 1, 2022
- a new revaluation of 2.65% on May 1, 2022
- an increase of 2.01% on August 1, 2022 (again to keep pace with the consumer price index).
On January 1, 2023, the net monthly amount of the SMIC will be €84 higher than on January 1, 2022.
Further increases could also take place during 2023 if the consumer price index continues to rise by more than 2%.
One of the highest minimum wages
Although the interprofessional minimum growth wage is the subject of debate about its effectiveness and sufficiency, it should be noted that France has one of the highest minimum wages among OECD countries.
Among OECD countries, 28 out of 36 countries have a minimum wage. Within the European Union, 21 of the 27 member states also have a national minimum wage.
But, in the majority of cases, there is no automatic revaluation of its amount or the revaluation only takes into account inflation.
Our system, which revalorizes the minimum wage on the basis of the increase in prices and the increase in the average wage, was introduced in France by the law of January 2, 1970.
The aim is to bring the evolution of the minimum wage closer to that of the average wage. The French system, however imperfect, is therefore one of the most favorable.
To learn more about the evolution of the amount of the Smic in recent years, we invite you to consult the INSEE statistics on the site below.