Facing Coronavirus In France: Focus On Partial Unemployment
The French government has enabled expedited procedures for employers to facilitate partial unemployment during the coronavirus (COVID-19) outbreak and has slightly increased the hourly employment allowance.
At a time when many companies are experiencing a drop in activity related to the COVID-19 Coronavirus in particular due to the recent one-month administrative closure of most stores and activities and the prohibition of gatherings of more than 100 employees, approximately two million employees are expected to be placed on partial activity this week.
On March 9, 2020, the Ministry of Labour, while insisting that work from home is the preferred solution when the employee’s position allows it, proposed examples of exceptional circumstances where partial activity would be possible in the context of the Coronavirus epidemic: administrative closure of an establishment, prohibition of public demonstrations following an administrative decision, massive absence of employees who are essential to the company’s activity, temporary interruption of non-essential activities, suspension of public transport by administrative decision and decrease in activity linked to the epidemic.
The purpose of this scheme is to avoid dismissals and it is strongly recommended that companies use temporary partial activity before commencing any redundancy process. This scheme can be implemented for a period of up to six months (potentially renewable).
Partial activity can take two different forms:
- a reduction of the employees’ working time below the legal weekly working time;
- a temporary closure of all or part of the establishment.
In order to cope with a rapidly deteriorating economic situation due to the COVID-19 outbreak, many companies in France have already expressed their wish to use the partial unemployment scheme. Partial unemployment (or technical unemployment) for a company consists of reducing the working week or temporarily closing all or part of an establishment.
In view of the current situation, the French government has shared its intention to facilitate the conditions for recourse to this system. This is an opportunity to take stock of (1) the procedure to be followed in order to benefit from partial unemployment; and (2) the advantages offered by this scheme.
Procedure
Information of Employees and Employee Representatives
Recourse to partial unemployment requires the prior information of the employee representatives and/or the employees themselves.
with more than 50 employees, the employer must first consult the Social and Economic Committee (CSE) for an opinion on
- the reasons for recourse to partial unemployment,
- the professional categories and activities concerned,
- the level and criteria for implementing reduced working hours, and
- the training measures envisaged, or any other commitment made by the employer.
Companies without staff representatives must inform their employees directly of their intention to use partial unemployment.
Prior Authorization of the Administration
In accordance with the provisions of Article R. 5122-2 of the French Labour Code, before starting partial unemployment, the employer must send a prior request for authorization for partial unemployment to the direction régionale des entreprises, de la concurrence, de la consommation, du travail et de l’emploi (DIRECCTE) (Regional Directorate for Enterprises, Competition, Consumer Affairs, Labour and Employment) of the department in which the establishment is located.
This request can be made online.
The application must provide
- the reasons for the use of the partial unemployment,
- the foreseeable period of the sub-activity, and
- the number of employees concerned.
The prior opinion of the CSE must be attached to the application.
DIRECCTE must notify its decision to the employer within 15 days. It must give reasons for any refusal.
However, the French minister of labour has recently announced that her services are currently being mobilized to reduce the response time to 48 hours despite the recent increase in requests.
In the absence of a response within 15 days, the authorization is deemed to be granted. The progress of the application can also be followed online.
Applications to the government scheme must be submitted on the dedicated portal (https://activitepartielle.emploi.gouv.fr/aparts/) preferably prior to putting employees on partial activity. However, the Ministry of Labour has indicated that applications for partial activity may be submitted within a reasonable period after the start of the requested period of partial activity.
Advantages
In case of recourse to partial unemployment, employees affected by a loss of salary must be compensated by an indemnity paid by the employer.
In return, the employer receives an allowance from the state corresponding to the so-called “hours off work.”
An employer may receive the partial unemployment allowance up to a maximum of:
- 1,000 hours per year and per employee whatever the professional branch; and
- 100 hours per year and per employee if the partial unemployment is due to modernization work on the company’s installations and buildings.
In principle, an employee placed in partial unemployment receives an hourly allowance, paid by the employer, corresponding to 70% of the employee’s gross hourly pay.
Currently, the partial unemployment allowance reimbursed to employers is 7.74 euros per hour off work (and 7.23 euros per hour in companies with more than 250 employees).
The French minister of labour has announced on 8 March 2020 that this allowance will soon be raised by decree to 8.04 euros, i.e., the level of the net minimum monthly salary (Smic).
The President of the French Republic nevertheless announced on 12 March 2020 that the allowance could finally cover the full hourly allowance paid to the employee.
The government has provided for a calculation tool in order to estimate the amount of the allowance that employers can obtain: http://www.simulateurap.emploi.gouv.fr/. In addition, the Minister of Labour has specified that the employer may also decide to implement State-funded training measures (FNE Formation) in order to obtain financial assistance of up to 70% of employee training costs.
In summary
In case of implementation of temporary activity or temporary unemployment (“activité partielle”), employees who suffer a loss of remuneration should benefit from an allowance paid by the employer equal to at least 70% of their previous gross remuneration.
To accompany the payment of the allowance, the employer can benefit from a lump-sum allowance co-financed by the State and unemployment authorities which currently amounts to EUR 7.74 per hour for companies employing between one and 250 employees and EUR 7.23 for companies employing more than 250 employees. The Minister of Labour announced that the partial activity allowance reimbursed to employers in companies with less than 250 employees should be increased by Decree to EUR 8.04. The Minister of Economy and Finances more recently indicated that the government is prepared to significantly increase this allowance.