Supporting Companies in France during the Covid-19 crisis: New decree on partial activity scheme

Temporary partial activity is a specific scheme existing in France to support companies facing a decline of business / economic difficulties due to the Covid-19 crisis.

The French government has considerably eased the eligibility criteria to benefit from the scheme in order to avoid redundancies.

In the current circumstances, it is strongly recommended that companies use temporary partial activity before initiating any redundancy process if required conditions are met.

Partial activity can take two different forms:

• a reduction of the employees' working time below the standard legal working time (i.e. 35 hours per week);
• a temporary closure of all or part of the establishment concerned.

A new Decree providing for new conditions in order to benefit from the partial activity scheme has been published on 26 March 2020 and its provisions are now enforceable.

The most significant changes are as follows:

1. The staff representatives should be consulted with but their opinion can be rendered within two months after the request has been filed on the Labor administration’s website – however, staff representatives and employees should be informed beforehand.

2. The request to benefit from this scheme must detail:

• the reason for the request: for example, exceptional circumstances and the coronavirus;
• the detailed circumstances and economic situation giving rise to the request; to ensure the request is as strong as possible, it is recommended to provide as much detail as possible regarding the decline of business and/or impossibility to work for the employees, since a posteriori controls from the Labor administration are not excluded.

3. The employer will have to grant an indemnity to employees corresponding at least to 70% of their gross remuneration for every hour not worked (i.e. corresponding to 84% of the net remuneration and equal to at least €8.03 net per hour) - this indemnity will be free from social security charges and must be paid on usual payroll deadlines.

4. The State's contribution will amount to 100% of the compensation paid by the employer capped to 4,5 x the legal minimum monthly wage (SMIC).

5. The deadline for the administration to respond to the Company’s request is reduced to 48 hours (instead of 15 days) – the absence of response is considered as tacit approval.

6. Employees under working time computed in days or hours over the year could be concerned by the partial activity scheme without restriction.

7. The duration of the scheme will be is extended from 6 to 12 months if need be. However, the Labor administration recommends companies to limit the duration of partial activity until 30 June 2020 at the latest.

8. Companies benefit from a period of 30 days to file the dematerialized request for partial activity from the effective placement of employees in partial activity (so it is possible for the request to have retroactive effect up to 30 days). The Company may have to pay the entire salary to the employees if the request is not accepted by the Labor administration.

The Osborne Clarke team remains at your disposal to provide further assistance in this respect.