A decree of January 28th, 2021 has extended the benefit of supportive measures for the companies most affected by the second wave of the Covid-19 epidemic by modifying the exemption and the aid which were announced in July 2020. A newsletter on this subject is available on our website at https://www.hiconnect.com/covid-19-a-new-french-decree-provides-for-details-regarding-covid-19-related-supportive-measures-for-companies-in-financial-difficulty/
Measures intended for employers with less than 250 employees or with less than 50 employees working in certain sectors
Are eligible, for periods of employment from September 1st or October 1st, 2020, as the case may be, the employers with less than 250 employees who carry out their main activity:
– In the tourism, hotel, restaurant, sport, culture, air transport and events sectors (Appendix 1);
– Or in sectors (of Appendix 2) whose activity depends on that of the above-mentioned sectors.
And who have, during the month following the month for which the exemption will apply:
– Been subject to restriction measures regarding the receiving of the general public, regardless of the activity of delivery, order pick-up or take-out activities.
– Or have suffered a loss in revenues of at least 50% compared to the same period of the previous year, regardless of the first hypothesis above concerning the general public.
Employers with less than 50 employees, whose sector of activity is listed in one of the two appendixes, can benefit from the supportive measures according to the same criteria indicated for employers with less than 250 employees.
They can also benefit from these measures if they meet the following cumulative criteria:
– They carry out their main activity in sectors other than those mentioned in the 2 appendixes, but which involve receiving the general public and which have been suspended because of the epidemic, excluding voluntary closures.
– They are subject to restriction measures regarding the receiving of the general public, which predominantly affects the pursuit of their activity, apart from delivery, order pick-up or take-out activities.
Companies which were already in a difficult economic situation on December 31st, 2019 cannot benefit from the above-mentioned supportive measures*. As an exception, companies with less than 50 employees whose annual revenue or annual balance sheet does not exceed 10 million euros and which were considered to be “in difficulty” on December 31st, 2019 are eligible, as long as they are not subject to collective insolvency proceedings and do not benefit from rescue aid or restructuring aid.
*Companies which fulfilled, on December 31, 2019, the conditions to be considered a “company in difficulty” as per the Commission Regulation (EU) 651/2014 of June 17, 2014 declaring certain categories of aids compatible with the EU internal market in application of Articles 107 and 108 of the Treaty on the functioning of the European Union.
How to appreciate the reduction in revenue
The above-mentioned condition regarding a loss of 50% in revenues can be assessed at the choice of the employer, according to:
– the revenues for the same month of the previous year;
– the average monthly revenues for the year 2019;
– the average monthly revenues achieved between the date of creation of the company and August 31st, 2020, for companies created in 2020.
This condition of loss in revenues is also considered fulfilled when the decrease in monthly revenues compared to the same period of the previous year represents at least 15% of the revenues of the year 2019 or for the year 2019 extrapolated to 12 months for companies created in 2019.
Reminders on these supportive measures
The first measure is an exemption which applies to social contributions, including the social insurance contributions (sickness, maternity, invalidity, old age, death), family allowances as well as “Fnal”, “solidarity-autonomy” and unemployment insurance contributions and the work accident-related contribution in a certain limit. Contributions to statutory complementary pension schemes are excluded from this measure.
The second measure is a Government subsidy which aims to support the employers regarding the payment of their social contributions. Its amount corresponding to 20% of the total salary paid to the employees for the considered employment period. This Government subsidy can be used for the payment of social contributions due for the years 2020 and 2021, after application of the above-mentioned measure of exemption and/or after application of any other applicable exemption.
However, please note that this subsidy cannot be used for periods of employment regarding which the previous supportive measure announced in July 2020 applies (further details on this previous measure are available on our website by clicking on the link at the beginning of this newsletter).
The benefit of the total cumulative amount for all the supportive measures (subsidies and exonerations), per employer and since the start of the crisis, cannot exceed € 800,000.
Details on the eligibility periods for the exemption and subsidy measures
These measures are calculated according to the remuneration due for the past month M-1 when the conditions are met during the current month M. The eligibility for the exemption is assessed month by month.
To benefit from the supportive measures for the employment period of October 2020, it is therefore necessary to have met the above-listed conditions during the month of November 2020.
For example, a company with less than 50 employees, whose activity is not listed in the 2 appendixes and which had to close in November 2020 is exempted from paying the contributions due for the October employment period.
Moreover, this Company is eligible to the Government subsidy which amount is equal to 20% of the remuneration paid to the employees for the October employment period. The employer can use this subsidy to pay the social contributions due for the years 2020 and 2021.
Employers with less than 250 employees in the sectors listed in the 2 appendixes can benefit from the supportive measure for periods of employment until December 31st, 2020. Regarding employers for whom the restrictions regarding the receiving of the general public would have been extended beyond 2020, these supportive measures are applicable until the last day of the month preceding that of the authorization to receive again the general public.
The Organization for the payment of social security and family benefit contributions (“URSSAF” in French) has however specified that companies employing less than 50 employees, which are not concerned by the 2 appendixes but whose activity involves receiving the general public and which have been suspended because of the epidemic, should only be eligible to the supportive measures for the month of October 2020.
The reason is that if these companies were not allowed to receive the general public in November because of the second lockdown, this prohibition was removed as of November 28th, 2020 and the lockdown was lifted on December 15th, 2020. Consequently, the URSSAF indicated that the supportive measures cannot apply for December, even considering that the lockdown was only lifted on the 15th and replaced by the current curfew, for the above-mentioned companies employing less than 50 employees and receiving the general public, regardless of the potential impact of the applicable restrictions in December on their activity.
At last, please note that unlike the lockdown situation, the current curfew should not be considered as a restriction to welcome the general public, for the application of the above-mentioned measures.