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24.03.2020Myriam de Gaudusson, Patrick Thiébart

Alert Coronavirus n° 3 – France: short-time working guidelines

  • The table below summarizes the short-time working scheme for companies whose activity is impacted by Covid-19.
  • It takes into account the comments made by the Ministry of Labour on 23 March 2020.
  • It also includes the changes that the French Government plans to make by decree to be published shortly.
  Questions General rules  Amendments already announced by the Ministry of Labour or to be made by decree to be published shortly
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 :

  • a temporary closure of the whole or part of the business; or
  • a reduction in the working time in whole or part of the company below the legal threshold of 35 hours per week.
 

 

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 :

  • economic circumstances;
  • supply shortages;
  • a damage or exceptional adverse weather conditions;
  • the transformation, restructuring or modernization of the business;
  • or any other circumstances of an exceptional nature.
 

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 The employer has a 30-day period after the starting date of the requested short-time working period to submit its application by any means granting a date certainty.
How long can an employer benefit from the short-time working scheme? The employer benefits from the scheme for a maximum period of 6 months.

 

 The proposed decree provides for the extension of this period to a maximum of 12 months.
 

 

Is the employer required to consult the employees’ reps. on short-time working?

 

 Yes, in companies with a workforce of 50 employees or more, the employer must consult the employees’ reps. on the following:

  • reasons behind the use of short-time working;
  • professional categories of the employees impacted by short-time working and affected activities;
  • level and criteria for implementing working time reduction;
  • contemplated training actions and any other measures aimed at developing employees’ employability.

If the company does not have any employee-representative body, the employer must directly informed the employees on the implementation of the short-time working project.
When should the employer consult the employee-representative body? The employer is required to consult the employee-representative body before submitting its short-time working application to the labour administration. The employer is authorised to consult the employee-representative body after filing its short-time working application.
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.

 The labour administration will be flexible when considering the companies’ commitments. For the time being, the degree of flexibility does not rely on any objective criteria.
What information should be included in the short-time working application?
  • The application must include the following information:
    • the reasons behind the use of short-time working;
    • the anticipated period of sub-activity;
    • the number of impacted employees;
    • where applicable, the commitments made to employees if the employer has benefited from the scheme over the past three years.
  • The request must be submitted along with the prior opinion of the CSE.
 The draft decree provides that the employer may send the CSE’s opinion to the administration within two months after the request has been made.

Since the employer may consult the CSE after having submitted the application, the fact that the application was not submitted along with the CSE’s prior opinion will not be an issue for its validation.
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 15 days.
  • In the absence of a response within 15 days, the application is deemed approved.
  • The status of the application can be checked online.
 The processing period is reduced to 48 hours.
How much will employees on short-time working get as compensation?
  • Except in exceptional cases, the employer must pay to the employees an allowance of at least 70% of their gross salary for each non-worked hour until the 35th weekly hour, corresponding to approximately 84% of the net hourly wage.
  • The allowance is 100% of the employee’s net remuneration when training activities are performed during non-working hours.
  • The allowance is paid by the employer on the usual pay due date.

The employer must provide the employee with a document indicating the number of hours compensated, the rates applied and the amounts paid or include this information in the pay slip.
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 employer may receive the financial aid up to a maximum of 1,000 hours per year and per employee, regardless of the professional field.
  • The hourly allowance that will be reimbursed to the employer is set at €7.74 in companies employing up to 250 employees and €7.23 in companies employing 251 or more employees.
  • Payment is made by the Service and Payment Agency (ASP) acting on behalf of the Government.

 

 The draft decree provides for a 100% coverage of the allowances paid to employees by companies, within the limit of 4.5 times the French minimum wage (“SMIC”), with a minimum of €8.03 per hour, regardless of the company’s number of employees.

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 (i.e. € 5,485.5 net).
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.

  • Employees working under a lump-sum working time agreement (“forfait jours” or “forfait heures”) can benefit from short-time working in case of shut-down of the establishment or part of the establishment where they work.
 The draft decree plans to extend the benefit of the short-time working scheme to employees working under a lump-sum working time agreement (“forfait jours” or “forfait heures”) in the event of a reduction in the working hours.
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.