The Government has announced a new plan to support the hiring of young people

The Government has announced a new plan to support the hiring of young people

A compensation in social taxes for companies hiring young workers

The country is facing a growing social and economic crisis as a direct consequence of the recent health events. A significative break on growth and employment is expected, with young people representing the most affected population. The French Government has therefore decided to invest 6.5 billion euros plan to support the hiring of young people in 2020 and 2021.

Companies hiring an employee aged less than 26 between August 1st 2020 and January 31st 2021 will be entitled to a hiring subsidy, which will be prorated according to effective working time of the employee and the effective duration of his/her employment contract, and which could reach a maximum of €4000 for an employee. This aid is due from the first day of execution of the employment contract. Its payment is made quarterly with a maximum of € 1,000 per quarter within the limit of one year.

It is to be noted that the periods of absence of the employee without continuation of remuneration and the periods during which the employee is placed under partial activity will be deducted from the calculation of this aid.

The request to benefit from it can be made by the employer, as per October 1st, 2020, to the Service and Payment Agency (ASP) within a maximum period of 4 months following the start date of the contract.

Favorable conditions to encourage companies hiring more workers

The employers satisfying the conditions listed below can benefit from this hiring subsidy:

– They must  contribute to the unemployment insurance system,

– They must be up to date with the filing and payment obligations regarding the tax administration and the social security and unemployment insurance contributions. Employers benefiting from and complying to a deferred payment plan are also reputed to be in compliance with this condition.

– They must not benefit from any other State aid for integration, access to employment or return to employment which would have been paid in regard to the concerned employee.

– They must not have proceeded, since January 1st, 2020, to a dismissal for economic reasons regarding the position to which will be hired the new employee.

Employers also have to comply with additional conditions related to the employee who must:

– Be hired under an indefinite term employment contract or under a minimum 3-month fixed term employment contract. It is necessary that the employee stays at least 3 months in the workforce of the Company.

– Be hired with a gross salary below or equal to twice the statutory minimum wage (SMIC), i.e. maximum salary of €3078.90 (gross) per month.

– Not to have belonged to the employer’s workforce, as of August 1st, 2020, under an employment contract which is not covered by this hiring subsidy.

For illustration, an employer hiring in October 2020 an employee aged 21, for a fixed term period of 18 months, and with a gross salary of €1800 per month will be entitled to the hiring subsidy  of €4000.

Should you have any questions, do not hesitate to contact us.

Helen Abruzzino

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