Executive status is often the dream of many employees. But what is behind this coveted status? What are its advantages and disadvantages? What does this mean for the employee and for the employer?
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According to the latest Insee figures published in September 2020, executives represented, in 2019, 19.3% of the French working population. For the first time in 2020, the number of executives in activity exceeded the number of workers according to Insee figures published in March 2021. But what really differentiates executives from other employees? What are the advantages and disadvantages of this status?
How can a business framework be defined?
Executive status remains a very vague concept, even eyes of the law. Indeed, there is no official definition concerning this status. Article L. 3111-2 of the Labor Code defines senior executives as ” managers who are entrusted with responsibilities whose importance implies a great deal of independence in the organization of their timetable, who are empowered to take decisions in a largely autonomous manner and who receive remuneration at the highest levels of the remuneration systems practiced in their company or establishment “. But not all employees with management status necessarily perform management functions. There are indeed many types of executives in companies: senior executives, technical executives, functional executives, project managers, managerscommercial executives, senior executives, expert executives, assimilated executives… The status is generally defined in the collective agreements of companies but it is very often assimilated to notions of responsibilities,autonomy and framing.
The International Labor Organization defines framework as “ any person who has completed education and vocational training at a higher level or who has recognized equivalent experience in a scientific, technical or administrative field; and who exercises, as an employee, functions of a predominantly intellectual nature, involving the application to a high degree of the faculties of judgment and initiative and involving a relatively high level of responsibility “.
How do you become a business executive?
The national interprofessional negotiation of February 28, 2020 estimated that an employee could obtain executive status:
• either by a diploma or a certificate higher education;
• or through recognized experience, acquired over the course of a professional career or through professional training.
The employee can therefore obtain the status either directly at hiringeither through his experience and skills developed within his company over the years, or following professional training.
The advantages and disadvantages of executive status in 6 points
1. Salary and social contributions
Having more responsibilities and expertise, an employee with executive status benefits from better remuneration than an employee. According to Apec, the average salary of executives in 2021 is around €50K per year, but there are large disparities in salaries depending on the size of the company, the city in which the employee works, the sector of activity and position held. In some cases, the manager may have a fixed salary and a variable part, and he regularly receives bonuses. Executives can also benefit, depending on the company and the sector of activity, from various advantages such as car function, a mobile phone, company savings schemes, a professional bank card…
Who says better salary also says higher social charges. It is therefore necessary to negotiate your gross salary well so as not to have any unpleasant surprises when receiving the net salary.
2. Working time
Generally, employees with executive status no longer work 35 hours per week but are subject to the day rate. They therefore do not have fixed working hours and can organize their schedule more flexibly without having to justify themselves. They can thus combine professional and personal life more easily thanks to a more flexible schedule.
Very often, the fact of not having fixed working hours leads to longer working days. A manager does not count his hours and his overtime is generally not paid.
3. Paid leave and RTT
Some companies, via their collective agreement, grant additional days off to their executives or rest days.
Because of their responsibilities and their workload, many executives do not use all their leave or their RTT. Some companies then offer a time savings account allowing employees to place their unused leave in an account. It also sometimes happens that certain executives have fewer RTT days than other employees due to their annualisation.
4. Notice and severance pay
In the event of resignation, the notice period lasts three months for a manager against one month for an employee. This allows you to manage your departure well and to properly close the files in progress. If you are made redundant, you will therefore be compensated longer. The trial period is four months, which leaves more time to get a clear idea of the position occupied and the team with which the manager must work.
Four months notice can sometimes be long when you have decided to resign for another position. You have to be sure that the company recruiting you is willing to wait for this delay. Moreover, a four-month trial period, usually renewable once, can sometimes also seem long.
5. Unemployment
The executives contribute, from a certain remuneration, to Apec (Association for the employment of executives). This contribution allows them to benefit from personalized support in the event of unemployment and to be monitored via the organization of workshops, maintenance preparationsworkshop social networks.
There are very few Apec agencies in France. However, more and more workshops are now accessible from a distance.
6. Retirement and pensions
Employees with executive status benefit from their own pension plan, offering them better coverage in the event of death. Exclusively payable by the employer, this contribution is equal to 1.5% of the portion of remuneration below the ceiling of the A portion of Social Security.
Since the Agirc-Arrco merger of 2019, executives and non-executives contribute in the same way. Managers therefore lose the benefit of their status when calculating the amount of contributions paid for the supplementary pension. Before the merger, executives, with the same gross salary, received a lower net salary than non-executives but contributed more to benefit from a higher retirement pension. Today, only the amount of the salary is taken into account in the calculation of pension rights.
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