Exceptional part-time operation scheme
Newsletter - March 2020
To limit the consequences of the health crisis relating to Covid-19, the part-time operation scheme was established by a decree of 25 March 2020 to facilitate access to it, and to reduce the sums which must be paid by employers.
Characteristics of the exceptional part-time operation scheme
Part-time operation, commonly called partial unemployment, is a scheme which enables all or part of a company to be closed, or the working hours of employees to be reduced temporarily. During this period the employer pays an indemnification to the employee, and receives in return a grant from the State. This scheme enables redundancies to be prevented when the company is experiencing temporary difficulties.
According to the information published by the government, eligible companies must be in one of the following situations:
• The activity pursued is covered by the orders of 14 and 15 March 2020 providing for closure of the company,
• The company is facing a down-turn in activity and/or supply difficulties,
• It is impossible for the company to establish the necessary preventive measures to protect employees’ health (remote working, protective measures, etc.).
Part-time operation can be envisaged for one or more employees, regardless of length of service, type of contract, or the employee’s working week. An order in the near future should widen the scheme to cover private individuals who employ domestic help, childcare assistants and company representatives.
The number of hours which can be indemnified due to part-time operation is equal to the difference between the legal working hours over the period in question and the number of hours worked over this period. Overtime is therefore not indemnifiable. The part-time operation grant is made up to a maximum of 1,000 hours per employee per year, regardless of the way in which activity is reduced.
Specific measures have been stipulated in the following cases:
• In the case of employees with a set number of hours or days, the basis for calculation is the legal working hours for the days of closure of the establishment, or for the days of reduction of the working week applied in the establishment, in proportion to this reduction. It has been laid down that a day of closure is equal to 7 hours, and a half-day to 3 h 30 minutes. Conversely, no details have been given to calculate the indemnification if working times are reduced,
• In the case of employees covered by an equivalence regime, the number of hours remunerated over the period in question is deducted from the legal working hours,
• Public holidays included in a period of part-time operation are indemnified only if they are habitually worked,
• Replacement income in respect of the part-time operation grant cannot be paid for the day of solidarity. This scheme cannot therefore be used during the day of solidarity.
The exceptional part-time operation scheme is applicable for applications for indemnification submitted for non-working hours since 1 March 2020.
The CSE [social and economic committee] must be consulted within 2 months of the application.
The specific indemnification due to the employee
The indemnification due to the employee covers at minimum 70% of their gross prior remuneration, i.e. approximately 84 % of the net salary.
However, there is nothing to prevent an employer from indemnifying its employees above 70% of the gross salary if it so desires, or if so provided by a collective bargaining agreement or company agreement. The indemnification is paid by the employer on the habitual date of payment of the salary.
The part-time operation indemnification paid to the employees is exempt from the Social Security contributions and associated deductions, except in the case of employees who are resident outside France for tax purposes, and those covered by the local Alsace-Moselle regime receiving a sum higher than the Smic [minimum wage].
The indemnification is subject to CSG and to CRDS at the global rate of 6.7%. These contributions are payable by the employee but their effect must not be to reduce the monthly remuneration received by the employee to less than the gross Smic.
The indemnification is subject to income tax.
If an employee falls ill and is off work during a period of part-time operation, they cannot claim both the daily indemnifications paid by the Social Security and the part-time operation indemnifications. They can only be paid the former. Salary maintenance rules apply, but they cannot enable a sick employee to receive more than if they had been well. Consequently, the person concerned cannot receive remuneration greater than that which they would have received if they had been working in part-time operation.
These rules apply to an employee who is off work before the start of the part-time operation period, and who remains on sick leave during this period due to their leave being prolonged. This is also the case if an employee is off work for child custody reasons, due to an occupational accident or illness, or is on paternity or maternity leave.
The grant due to the employer
In consideration for the indemnifications paid to the employee, the employer shall receive assistance from the State called a part-time operation grant.
The new scheme provides that the employer is entitled, for each non-working hour which is indemnified from 1 March 2020, to a grant with an hourly rate equal to 70% of the gross hourly remuneration, limited to 4.5 times the hourly rate of the Smic. This hourly rate cannot be less than €8.03. The outstanding payment paid by the company is therefore zero for employees whose remuneration does not exceed 4.5 SMIC.
The grant is paid by the Services and Payment Agency (ASP) in principle within an average period of 12 days, after verification of the monthly application, which must be sent by the employer via its account in the dedicated platform.
The administrative procedure for declaration of part-time operation
The new decree provides for shortened processing times and a simplified procedure. The company now has
a period of 30 days from the date on which the employees were placed in part-time operation to submit their online application, with retroactive effect.
The application must stipulate:
• The reason for use: exceptional circumstances + coronavirus,
• The detailed circumstances and the economic situation which led to the application,
• The foreseeable period of under-employment, which can last until 30 June 2020 on the first application,
• The number of employees concerned,
• The number of expected non-working hours.
The services of the State (Direccte) have a period reduced to 48 hours to reply to any application for authorisation. If no reply is given within this period this shall be equivalent to a decision in favour. Part-time operation authorisation can be granted for a maximum period of 12 months (instead of 6 previously). Checks will be made thereafter by the authorities to ensure that there is no abuse of the scheme.
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