Temporary subsidy for the employment of young adults under 26

Newsletter - September 2020

A decree of 5 August 2020 created a temporary subsidiary for the employment of young people under 26 years of age. Subject to certain conditions, companies are entitled to this subsidy up to a maximum of €4,000 if they hire a young employee under 26 years of age on a permanent contract or a fixed-term contract of at least three months, between 1 August 2020 and 31 January 2021, with a maximum salary of two times the guaranteed minimum wage.

Eligibility conditions

Eligible employers

  • Companies with or without salaried employees:
    • Companies operating in the market and non-market sectors
    • Companies included on the national register of majority State-owned companies
    • Employers registered for the unemployment insurance scheme
    • Groups of employers organising integration and qualification schemes
    • Maritime fishery employers
    • Chamber of Trade (Chambre des métiers) and Chamber of Agriculture for non-statutory employees
      Public administrative institutions, public industrial and commercial institutions, semi-public companies, and private individual employers are not eligible.
  • They must be up-to-date with their disclosure and payment obligations as regards tax, URSSAF or MSA and unemployment insurance, or have signed and comply with an arrangement to clear outstanding contributions
  • They must not receive any other government subsidy for integration, access or return to employment for the employee in question (employment and skills scheme (parcours emploi-compétence), employment initiative contract (contrat initiative-emploi), work-study subsidy)
  • They must not have made an employee redundant from the subsidised position since 1 January 2020

Eligible employees

  • Young adults under 26 years of age on the signature date of the contract
  • They must not have been hired by the company after 1 August 2020 under a contract not entitled to the subsidy
  • They must remain in the company’s workforce for at least 3 months after the first effective day of the contract

Other conditions

  • Permanent contract or fixed-term contract of at least 3 months
  • Signed between 1 August 2020 and 31 January 2021
  • Wage below or equal to twice the guaranteed minimum wage (€3,078.84 gross per month for a full-time employee working a 35-hour week)

Subsidy amount and terms of payment

  • €4,000 maximum for a given employee
  • Prorated to the employee’s actual working time and the effective length of the contract
  • Due from the first effective day of the contract
  • Paid quarterly in arrears within the limit of one year (€1,000/quarter)
  •  A certificate proving the employee’s presence must be provided every quarter to the Agence de Service et de Paiement (ASP)
  • Subsidy not due for:
    • periods of employee absence if the wage paid by the employer is not maintained
    • conventional furlough or long-term furlough periods during the quarter considered

When an employee previously hired by the employer under a fixed-term contract entitled to the subsidy signs a permanent contract or a fixed-term contract of at least three months before 31 January 2021, the employer continues to receive the subsidy, even if the employee reached the age of 26 during the first fixed-term contract, within the maximum limit of €4,000.

Application for the subsidy

  • Application to be made to ASP via remote service
  • within 4 months of the effective start date of the contract
  • The employer certifies that it meets the eligibility conditions and can furnish the relevant documents to the ASP

Repayment or suspension of the subsidy

  • Repayment in the event of fraud: all amounts received must be repaid when the hiring of the young employee for which the employer received the subsidy led to the layoff of another employee
  • Repayment in the event of false declarations: all amounts received must be repaid if the employer claiming to be eligible for the subsidy makes false declarations or if the certificates of presence are inexact
  • Suspension for failure to produce documents:
    • Failure to produce documents proving compliance with eligibility conditions within one month, in the event of an inspection
    • Failure to produce the certificate of presence cancels payment of the subsidy for the period concerned

The monthly newsletter is distributed free of charge to the firm’s clients via email. This document is designed to provide information and may not reflect the most recent legal developments. Clients and readers should not take action or refrain from taking action on the basis of information contained in this newsletter without seeking professional advice.

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