As in many other countries in the world, business activities in France have been seriously impacted by the COVID-19 pandemic.
The French authorities are strongly urging that, whenever possible, companies introduce teleworking, which does not require prior employee consent in the case of a pandemic threat.
Unfortunately, most businesses cannot benefit from such a working arrangement and must, at least temporarily, close their premises and cease activities due to the measures taken by the French authorities.
The French government has already announced a set of measures to help companies protect against financial ruin, including the postponement of social security and tax payments, government guarantees of bank loans, and measures to protect the self-employed.
The government has also advised companies against announcing redundancies during these exceptional times, urging them instead to use the partial activity (activité partielle) mechanism, which is designed to prevent full redundancies.
The French labor authorities have given companies temporary authorization to meet their obligation to provide employees with work in part only. This may take the form of either a reduction of the working week or temporary closure.
Companies must submit a partial activity request online to the French labor authorities through a specific portal, and will be notified of the authorities’ decision through the dedicated portal within the following 15 days. The absence of a response within this timeframe is deemed to be an approval. If approved, partial activities can be implemented by the company for a maximum period of six months (which can be renewed in specific circumstances).
The French Minister of Labor indicated on March 16, 2020 that companies will be notified within 48 hours and that they could request retroactive application of the partial activity mechanism within 30 days from the date of the mechanism’s implementation.
As a general rule, companies must pay employees subject to the partial activity mechanism at least 70 percent of their regular gross salary (around 84 percent of net salary).
Employers may receive compensation from the French labor authorities in the amount of €7.74 (or €7.23 in companies employing more than 250 employees) per hour not worked (up to 35 hours per week) and per employee, up to a maximum of 1,000 hours per employee during the calendar year. However, employees will continue to receive the full rate of pay for annual leave, “reduction in working time” (reduction du temps de travail – RTT) days and public holidays, and such payments are not subject to compensation from the French labor authorities. Companies must request compensation through the portal and submit supporting documents (i.e., employees’ payslips reflecting the hours not worked and evidence of implementation of the partial activity mechanism). The French Minister of Labor already announced on March 16, 2020 that a decree to be published in the next few days would provide for full reimbursement of any indemnities paid to employees during the period of partial activity, up to 4.5 times the hourly minimum gross wage.
Do not hesitate to use the partial activity mechanism as this may be a temporary solution to protect against the impact of COVID-19 on the economy.
Client Alert 2020-105
