Covid-19 related partial activity scheme will be modified starting in November 2020

Covid-19 related partial activity scheme will be modified starting in November 2020

The period of application of the current rules relating to the partial activity allowance is extended

A decree published on June 29th, 2020 provided an adjustment to the rate of the partial activity allowance paid to employers by the French Government for the period from June 1st until September 30th, 2020.

Until September 30th, 2020, companies belonging to a sector of activity targeted in this list (please, click on the link) could be reimbursed 60% of the gross hourly salary for all employees placed in partial activity.

This rate was maintained at 70% for companies belonging to a sector of activity particularly impacted by the crisis and targeted in this other list (please, click on the link).

Visit our newsletter blog: https://hiconnect.com/partial-activity-the-reimbursement-rules-change-in-june/  for more information about the rules that applied from June to September.

Another decree published on September 25th, 2020 extends the period during which these rates apply, until the 31st of October 2020. 

The partial activity allowance should be reduced in November 2020

A draft project is currently examined by the French Government and new rules related to the partial activity allowance paid to employers are expected soon.

The rate of the partial activity allowance may be significantly reduced from 60% to 36% of the gross hourly salary of employees placed in partial activity, except for the companies targeted below.

The rate of 60% should be maintained for companies whose sector of activity is particularly impacted by the crisis (including tourism, catering and events sectors). Companies receiving the general public and which are obliged to suspend their activity according to the closure measures taken by the French Government may continue to benefit from a 70% rate.

The reduction in the partial activity allowance for other companies should apply from November 1st, 2020 and may be intended to encourage companies, if concerned, to opt for the long-term partial activity scheme explained below.

A long-term partial activity scheme as the new alternative to the current partial activity scheme implemented to face Covid-19

This new scheme, also called reduced activity for employment (ARME), had been explained in a previous newsletter which can be read on our blog : https://hiconnect.com/a-new-scheme-for-maintaining-employment-during-covid-19-period-reduced-activity-for-employment-arme/

Some dispositions explained at the end of that newsletter (“reduced activity for employment”) have been recently amended by a decree published on September 29th, 2020.

An amendment concerns the hourly rate of the indemnity reimbursed to the employer that differed (60% or 56%) depending on the date of communication to the Administrative Authority of the legal act implementing this specific partial activity scheme in the company.

The decree of September 29th, 2020 specifies that the 56% rate will not apply. Consequently, even if the legal act is submitted to the Administrative Authority after the 1st of October 2020 (and in any case before July 1st, 2022), the 60% rate applied to the employee’s gross hourly salary will apply (within the limit of 4.5 times the applicable statutory minimum hourly wage).

The other amendment specifies that the economic dismissal of an employee placed in long-term partial activity will not involve the reimbursement of the allowances received by the employer, regarding the dismissed employee, if the activity outlook has deteriorated compared to forecasts which should be provided in the legal act implementing the long-term partial activity scheme in the company (i.e. a  collective agreement signed at the Company level, or a collective agreement signed at the Industry level followed by a written decision from the employer called “Unilateral Decision of the Employer”).

Helen Abruzzino

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