Partial activity: update on the regulations applicable since November 1st, 2020

 

The rate of the partial activity allowance paid to employers was supposed to be reduced as of November 1st, 2020. Due to the worsening of the Covid-19 epidemic and considering the announcement of a new lockdown, the Government has decided to postpone this decrease to January 1st, 2021, in a decree published on October 30th, 2020.

The partial activity allowance that employers must pay employees that are furloughed, is still equal to 70% of the employee’s remuneration

For all the hours which are not worked by employees placed under partial activity, the employer continues to pay 70% of the gross hourly salary of these employees.

These terms and conditions apply to all employees in partial activity under common law, including those who cannot work because they are vulnerable or with a disability, without being able to telecommute, or because they are obliged to provide childcare for their dependents under 16.

The common law scheme of partial activity refers to the applicable regulation by default, when the long-term partial activity scheme has not been implemented.

The current rate of the partial activity allowance paid to employers is maintained until December 31st, 2020

The terms regarding the reimbursement of partial activity allowance under common law will not be changed until December 31st, 2020. The hourly rate of the partial activity allowance under common law paid by the French Government to the employer remains equal to 60% of the employee’s gross hourly salary, limited to 4.5 times the hourly minimum salary (“SMIC” in French” –  i.e. a maximum hourly allowance equal to € 27,41 per hour not worked in 2020).

As an exception, an hourly rate of 70% applies:

  • without any conditions for employers who carry out their main activity in one of the following sectors of activity: tourism, hotel, catering, sport, culture, air transport and events sectors (listed in the appendix 1);
  • for employers who exercise their main activity in sectors (listed in the appendix 2) whose activity is dependent on that of the sectors listed in the appendix 1 and who have suffered a decrease in turnover of at least 80% between March 15th and May 15th, 2020 (the period of the initial lockdown).
  • for other employers not falling within the sectors mentioned above and whose main activity involves receiving the general public, for the period during which the activity is suspended due to the spread of the epidemic, in application of a legal obligation or because of an administrative decision, excluding voluntary closures.

The decree published on October 30th, 2020 makes two adjustments regarding the benefit of the increased rate of partial activity allowance reimbursed to employers

The benefit of the increased reimbursement of 70% is extended to companies receiving the general public and partially closed. It is now possible to take into account the measures of closure and the limitation of opening hours, which are or could be adopted within the framework of the state of health emergency;

The list of activity sectors benefiting from the increased reimbursement rate (i.e. 70% of the employees hourly gross salary) is extended. The appendices 1 and 2 listing these sectors of activity are up to date in accordance with these changes.

These two measures entered into force on November 1st, 2020.

The long-term partial activity (APLD) scheme is slightly amended

The decree of October 30th, 2020 provides for an alignment of the amount of the allowance, paid to employers who have implemented the long-term scheme, to that of the common law scheme when this amount is more favorable. These rules apply from November 1st, 2020 until December 31st, 2020.

As a reminder, the hourly rate of the allowance paid to employers is equal, for each employee placed in long-term partial activity, to 60% of the gross hourly salary limited to 4.5 times the hourly minimum salary (“SMIC” in French” –  i.e. a maximum hourly allowance equal to € 27,41 per hour not worked in 2020).

To prevent this scheme from being less favorable than that provided for companies whose sector of activity is listed in the appendices, and which can therefore benefit from an increased rate of 70% under the common law, it is planned that the hourly rate of the allowance paid to the employer under the long-term partial activity scheme, will be at least equal to the hourly rate of the partial activity allowance under common law if this is higher.

If you have any questions on the above, please do not hesitate to get in touch with us.

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