Grants for hiring people into very small and small-to-midsize companies
Newsletter - February 2016
On 18 January 2016 the President of France announced the creation of a new grant for hiring aimed at small and mid-size companies. Decree no. 2016-40 dated 25 January 2016 specified the shape of this measure, which is in addition to the grant for hiring the first employee in very small companies.
Eligibility conditions for the measure
Corporations that wish to take advantage of this measure must already have fewer than 250 employees over the twelve months of year 2015, this staffing figure being calculated on the average staff determined at the end of each month.
If the staffing level is assessed within a single corporation that may cover several disparate locations, it does not need to be determined at the group level. So, a group subsidiary whose total staff numbers exceeds 250 employees, will be able to take advantage of the hiring grant if the subsidiary alone has not reached that threshold. Associations, works councils, employer consortia may also claim a hiring grant.
The hiring grant is given for the hiring of an employee whose pay is not in excess of 1.3 times the basic wage, or SMIC, i.e., €1,906.64 gross per month on the basis of the legal work week of 35 hours a week.
It is important to note that this criterion is only an “entry condition” for the measure; if there is a pay increase, the employer will retain the benefit of the grant.
The kind of employment agreement
The grant covers both open-ended employment contracts and fixed-term contracts of at least six months, which begin between 18 January and 31 December 2016, whether the agreement is entered into on a full-time or part-time basis.
“Career-development contracts” (or “contrats de professionnalisation”) that fulfil these criteria are also eligible.
Value of the grant
The value of the grant is a maximum of four thousand euro (€4,000) for a single employee. The grant is paid in arrears each period of three calendar months of performance of the employment contract, at the rate of a maximum of €500 per quarter and for up to twenty-four (24) months. In respect of the first and last months of performance of the contract, the value of the grant is paid on a proportional rate for the days of performance of the contract, as certified by the employer.
As for part-time employment agreements, the value of the grant is prorated according to the share of work time.
The employer is required to send an application to the ASP (payment and services agency) within six (6) months of the start of the employment agreement, along with a statutory declaration stating that the company is eligible for the measure. The grant is then paid at the end of each quarter, on the basis of a certification from the employer, proving that the employee is still working in the company. If that quarterly certificate is not sent, there is a chance that payment of the grant will be discontinued.
This grant cannot be taken along with another grant from the State for creating employment, access or return to work paid in respect of the same employee, except for those circumstances specified in a “career development” contract, if the candidate is hired in that framework. Hence, it cannot be combined with grants for the generation contract, or with others pertaining to single back-to-work contracts or with the aid mechanism for the hiring of the first employee for very small companies.
Aid for hiring the first employee in very small companies
This mechanism, introduced on 9 June 2015, has been extended until 31 December 2016. This €4,000 grant may now be given for employees who were recruited for fixed-term employment agreement with a term of at least six months, down from 12 months previously, and for hires on a career development contract lasting at least six months.
This grant for hiring the first employee is of benefit to the any company that does not belong to any group of companies (as defined in rules pertaining to the investiture of the group council) and is not conditioned upon a salary level.
Furthermore, the employer that has the benefit of the grant for a fixed-term contract will continue to receive the grant if it enters into an open-ended contract with the employee concerned or another fixed-term contract of at least 6 months.
To conclude, if the employee is absent without continuation of pay, the grant is not payable, but the value of the grant may be postponed until 31 December 2019, inclusive, on the basis of employer certificates.
We are entirely available if you have any further queries about the issues discussed in this newsletter or about any other accounting, tax, social security or law related topic.