Childcare expenses born by the employer are exempted from social security contributions

As part of a dispute between the French social security administration (URSSAF) and Ikea, the Paris Court of Appeal had to decide on the qualification of the employer’s bearing the childcare costs incurred by Ikea’s employees.

The URSSAF considered that those sums should be subject to social security contributions, which was challenged by Ikea.

In a decision of 15 March 2019, the Paris Court of Appeal ruled, based on Article L. 7223-4 of the French Labour Code, that the employer’s payment of childcare expenses for children under 6 years incurred by its employees does not constitute a remuneration and is therefore exempted from social security contributions.

Paris Court of Appeal, 15 March 2019, n°15/02659