New partial activity rates and extended exceptional measure for paid leave in 2021

New standard rates applicable for partial activity in 2021

As per February 1st, 2021, employees placed in partial activity will receive 60% of their salary (versus 70% currently paid by the employer). More important: the amount reimbursed by the Government to the employer will be decreased to 36%, except for companies particularly impacted by the epidemic crisis which will continue to benefit from a rate of 70% or 60%.

However, the French Government is currently considering a possible postponement of these new rates (i.e. 60% for the employees and 36% for the employers) for a new date of application on March 1st rather than on February 1st, 2021.

Employees placed in partial activity because of their particular vulnerability against the virus or because of childcare necessity should also be subject to the new rate of 60% (versus a current rate of 70%) as per February 1st, 2021. However, they may also benefit from the same postponement measure for an effective date of application on March 1st, 2021.

Please also note that since January 1st, 2021, the guaranteed minimum gross salary (“SMIC”) has been increased from €10.15 to €10.25 per hour. The partial activity allowance reimbursed to the employer remains calculated based on a reference hourly salary capped at 4.5 SMIC.

Consequently, the maximum hourly allowance reimbursed to the employer is capped at:

– €32.29 when the applicable rate is 70%,

– €27.68 for a rate of 60%,

– €16,61 for a rate at 36%.

A progressive decrease scheduled for companies whose sector of activity is particularly impacted by the covid-19 crisis

Regarding sectors of activity relating to tourism, hotels, catering, sport, culture, passenger transport and events (sectors listed in the first appendix), as well as sectors of activity listed in the second appendix, that depend on a sector of the first appendix and suffer a certain loss of revenues (at least 80% between March 15th and May 15th, 2020), the rates should remain at 70% for the employers and their employees until February 28th, 2021. For the month of March, the rate of the allowance reimbursed to the employer might be decreased from 70% to 60%. Finally, the standard rates of 60% for the employees and 36% for the employers should be applicable as per April 1st, 2021.

However, the French Government is considering postponing these new rates for these sectors, including a progressive decrease organized according to a new distinction based on the employer’s loss of revenues.

The employers whose activity belongs to these sectors and which have suffered a decrease in revenues of at least 80%, may keep the benefit of the applicable rates which should remain unchanged (70% for both the employers and employees) until June 30th, 2021. The new rates of 60% for employees and 36% for employers would become applicable as per July 1st, 2021.

The above-mentioned loss of turnover is assessed at the employer’s choice, for each month supported under partial activity:

  • in relation to the turnover of the same month in 2020;
  • or in relation to the turnover recorded for the same month in 2019;
  • or for companies created after January 31st, 2020, compared to the average monthly turnover achieved between the date of creation of the company and January 31st, 2021.

 Companies subject to specific territorial health restrictions

Finally, the 70% rate continues to apply until June 30th, 2021 for employers and employees of companies located in a territory subject to specific health restrictions, related to the exercise of economic activity and to the movement of people in the context of health emergency, and which have suffered a decrease in revenues of at least 60%.

This decrease in revenues is appreciated on a monthly basis, comparatively with the revenues of the last month preceding the implementation of the territorial restrictions or comparatively with the revenues of the same month in 2019.

Please note that the mentioned postponements are currently provided for by several draft decrees which are not yet effective. Consequently, this information may still change before these decrees enter into force.

The partial activity rates for companies closed by administrative decision remains unchanged until July 1st, 2021

Another category of companies, not falling within the sectors above mentioned and whose main activity involves receiving the general public, that are totally or partially closed, following the administrative decisions taken in the context of the health crisis, continue to benefit from derogatory rates until the 30th of June 2021 included.

Consequently, employees of these companies will continue receiving 70% of their reference salary while the employers will also benefit from a reimbursement rate of 70% for the same period.

As per July 1st, 2021, all the companies including those which were closed by administrative decision, will be subject to the new rates of 60% for the employees and 36% for the employers.

The exceptional measure regarding the reimbursement of paid leave taken during partial activity is extended until March 7th, 2021

As a reminder, this exceptional measure is intended for companies whose main activity involves welcoming the public, which benefit from a partial activity authorization and which have suffered from at least one of the following two eligibility criteria:

  • the prohibition on receiving the general public for a total period of at least 140 days between January 1st and December 31st, 2020,
  • Or a loss of 90% of revenues during the periods of health emergency (from March 24th to July 10th, 2020 and since October 17th, 2020) in comparison to the revenues for the same periods in 2019.

Meetings these conditions would allow companies to request a reimbursement allowance equal to 70% of the salary paid per employees for up to 10 days paid leave taken during a period of partial activity.

This exceptional measure provided for by a decree of December 31st, 2020, specifies that the eligible paid leave must be taken during the period from the 1st through the 20th of January 2021. This requirement involved in fact a considerable limitation of the beneficiaries of the measure, given the deadlines and procedure to be followed to set the dates of employees’ holidays.

A second decree published on January 21st, 2021 overcomes this problem, by extending the eligible period of holidays until January 31st, 2021 and by providing for a second period of eligibility from February 1st until March 7th, 2021.  It also clarifies the condition of partial activity by specifying that the measure applies if at least one employee is placed in partial activity during the second period from February to March. Originally, the first decree only mentioned among the eligibility criteria, the obligation to have a partial activity authorization with regard to the first period in January.

New limitation period for requesting the payment of partial activity-related indemnities and new maximum duration of partial activity in 2021

As per March 1st, 2021, the maximum duration of a partial activity authorization will be set at 3 months, renewable for the same duration, i.e. a maximum of 6 consecutive months or not, over a 12-month period. Before March 2021, the maximum duration of the partial activity authorization was 6 months renewable.

In the case of an employer that would have received a partial activity authorization before March 1st, 2021, this period of partial activity ending before March 2021 is not taken into account for the calculation of this maximum duration. However, if the partial activity is authorized before March 1st, 2021 for a period going beyond this date, the part of this period starting on March 1st will be deducted from the maximum authorization period.

Furthermore, the deadline to make a request of payment of partial activity indemnities was previously of 12 months following the end of the period covered by the authorization of partial activity. The finance law for 2021, published on December 30th, 2020 has reduced this period from one year to 6 months.

In the absence of a specific effective date, this modification of the deadline would appear to be applicable to requests for authorization of partial activity made from the first day following the publication of the law i.e. as per December 31st, 2020.

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