Alert n° 5 – France short-time working guidelines (updated on March 31, 2020)
- The table below summarizes the short-time working scheme for companies whose activity is impacted by Covid-19 as of March 31, 2020.
- It takes into account the comments made by the French Ministry of Labour at that date.
- The table reflects the changes stemming from Decree n° 2020-325 of 25 March 2020, published in the Official Journal dated 26 March 2020, which applies to short-time working requests sent or renewed to the Agence de services et de paiement as of 26 March 2020, as regards placement of employees in short-term working from March 1st, 2020.
- The table also takes into account the changes brought by Ordinance n° 2020-346 of 27 March 2020 that is in force until a date to be determined in an upcoming decree and, in any event, not later than 31 December 2020.
|What is short-time working?||The purpose of the scheme is twofold: compensating employees for loss of earnings and helping employers to finance this compensation as a result of :
The benefit of this scheme has been extended to individual employers and childcare assistants as well as to foreign companies employing at least one employee with no establishment in France.
|In which cases can employers take advantage of the short-time working?
|The employer must justify the use of short-time working by one of the following reasons :
|How to make a short-time working application?||The employer must send a preliminary request for short-time working to the labour agency of the area where the company is located. CLICK HERE
Employer have a 30-day period after the starting date of the requested short-time working period to submit their applications by any means granting a date certainty.
|How long can an employer benefit from the short-time working scheme?||The short-time working scheme is for a maximum period of 12 months.|
|Is the employer required to consult the employees’ reps. on short-time working?||Yes, the employer must consult the employee-representative body (“CSE”), if any, on short-time working.
Employers are required to consult the employee-representative body before submitting its short-time working application to the labour administration.
However, employers are authorized to consult the employee-representative body after filing their short-time working applications and to submit the CSE’s opinion within the next 2-month period following the filing date.
|Should the employer provide guarantees such as a commitment not to proceed with redundancies in the following months of the filing of the short-time working application?||If the company has benefited from the short-time working scheme over the past three years, the employer will have to set out the commitments it intends to make to its employees in its short-time working application.
These commitments may relate to the maintaining in employment of employees for a period of up to twice the period of authorization or to specific training actions for employees on short-time working.
The administration may require other commitments to be made by the employer, depending on the financial situation of the company. In case of failure to comply with its commitments, the employer will be required to pay back the whole or part of the short-time working allowance paid by the French authorities.
|What information should be included in the short-time working application?||The application must include the following information:
The request must be submitted along with the prior opinion of the CSE, except in exceptional cases (as fleshed out above).
|How long will it take for the employer to get a response?||A motivated decision from the labour administration is in principle be given to the employer within 2 days. The application is deemed approved in case of absence of a response within 2 days.
|May employees lawfully refuse their placement in short-time working?||No, the placement in short-time working cannot be refused by employees. Such placement is mandatory for all employees, including protected employees.|
|May employee take part in a training during the short-time woking period?||Yes, employees placed on short-time working may benefit from trainings such as skills assessments, actions for the validation of acquired experience, training actions financed in whole or in part by the company.
Furthermore, in case of extended under-activity or total shutdown, companies may ask to benefit from FNE-Training in addition to short-time working.
|How much will employees on short-time working get as compensation?||The employer must pay to the employees an allowance of at least 70% of their gross salary for each non-worked hour, corresponding to approximately 84% of the net hourly wage. The basis for the allowance is the employee’s gross remuneration, determined by reference to the basis for the employee’s paid leave allowance. The hourly rate of the allowance for part-time employees may not be less than the hourly rate of the French minimum wage (“SMIC”).
The employer may also decide to maintain 100% of the employee’s net hourly wage. However, in this case, the employer will not be entitled to request a reimbursement from the government for the part exceeding 84% of the employee’s net hourly wage (see below). However, according to an announcement by the Minister of Labour, the employer will be eligible to a total exemption from social security contributions for the part of the net remuneration exceeding 84%.
The hourly allowance, which in principle is increased to 100% of the employee’s previous net remuneration when training is carried out during unworked hours, is temporarily aligned with the remuneration of employees who are not on training, i.e. 70% of the employee’s gross salary (approximately 84% net) for training applications accepted by the employer after publication of the Ordinance.
|Can the employer be reimbursed for the allowances paid to employees who are on short-time working?||The employer must submit a request for financial aid on a monthly basis. The reimbursement is made by the ASP acting on behalf of the State. The hourly allowance which was previously reimbursed on a lump-sum basis (see our alert n°3) is now reimbursed on a proportional basis and equal to 70% of the gross hourly salary, i.e. 100% of the indemnities paid to employees, calculated within the limit of 4.5 SMIC, with a minimum of € 8.03 per hour, regardless of the size of the company.
The remaining amount to be paid by the employer will be equal to zero if the employee is paid less than 4.5 times the French minimum wage.
|Which hours are compensated under the short-time working scheme?||The hours taken into account equal to the difference between the number of actual hours worked and the legal working time (i.e. 35 hours/week), or the working time provided for in the CBA or the employment contract, whichever is the lower.
Example 1 : an employee works 35 hours a week and has his working hours temporarily reduced to 20 hours. The number of hours compensated will be equal to : 35 – 20 = 15 hours.
Example 2 : an employee works 39 hours per week and has his working hours temporarily reduced to 20 hours. The number of compensated hours will still be 15 hours (35 – 20 = 15 hours) as the hours worked above the legal threshold of 35 hours are not taken into account.
|What is the social regime for short-time working allowances?||The short-time working allowance paid to the employee is exempt from employee and employer social security contributions.
The short-time working allowance is however still subject to the mandatory social contributions: CSG at the rate of 6.2% and CRDS at the rate of 0.50%, which are calculated on the basis of 98.25% of the allowance paid.
The CSG and CRDS deductions made from the short-time working allowance cannot result in reducing the short-time working allowance below € 1,539.42.
|What are the penalties for short-time working fraud?||Employers who got an authorization for placing employees on short-time working, although these employees are still working or on leave (paid leave or compensatory rest days), may face a term of imprisonment of 2 years and a fine of € 30,000 as well as additional penalties.
The employer will also be requested to reimburse the short-time working allowances.
|What is the impact of non-worked hours on the accrual of rights with respect to the several regimes?||Paid leaves||Short-term working periods are wholly taken into consideration for the calculation of the duration of paid leave.|
|Calculation of mandatory profit-sharing and optional profit-sharing bonuses||In order to set aside the impact of short-time working upon the calculation of mandatory profit-sharing and optional-profit sharing, salaries that should normally have been perceived will be taken into account.|
|Calculation of the severance indemnity||On exceptional basis, the period of suspension of the employment contract caused by short-time working will not be taken into account when calculating the length of seniority.|
|Sick leave||Any employee on sick leave cannot benefit, at the same time, from both social security allowances and short-time working allowances. As a result, an employee on sick leave will only benefit from social security allowances in the event where the establishment he/she works for is partly or wholly suspended (closure of the establishment).|