1. The common partial activity mechanism
As of January 1, 2021, the maximum duration of the partial activity will be three months, as opposed to the current 12 months. The partial activity could be renewed up to six months whether consecutive or not over a period of 12 consecutive months.
In the event where the use of the partial activity mechanism is justified by either a disaster or inclement weather, the initial maximum duration will be six months.
Furthermore, when companies employing at least 50 employees make any new request for authorization implemented as of November 1, 2020, staff representatives – who must be consulted prior to the request for approval of the partial activity mechanism before companies contact the French Labor authorities – shall now be informed at the end of the authorization period of the conditions under which the partial activity has been implemented.
Finally, these decrees confirm the possibility for the companies having various units to make a single request for approval of the partial activity mechanism when this concerns at least 50 units, for the same period and purpose.
- Indemnity paid to the employees
As of January 1, 2021, the hourly rate of the indemnity paid by companies to any of their employees placed under the partial activity will be 60 percent of the employees’ gross remuneration, compared to the current level of 70 percent. The gross remuneration available will be capped at 4.5 times the gross minimum wage, which is €6,927.39 per month in 2020.
- Partial activity allowance paid to employers
Since June 1, 2020, the hourly rate of the partial activity allowance has been 60 percent of the employees’ gross remuneration, up to 4.5 times the gross minimum wage.
As of January 1, 2021, this rate will be reduced to 36 percent, with minimum hourly rate of €7.23, except for employees employed under an apprenticeship or professionalization agreement.
For companies in industries significantly impacted by COVID-19, between November 1 and December 31, this rate will be 70 percent, with a minimum hourly rate of €8.03, except for employees employed under an apprenticeship or professionalization agreement.
2. Long-term partial mechanism
- Allowance paid to employers
The new decrees do not change the hourly rate of the allowance paid to employers using this mechanism that amounts to 60 percent of the employee’s gross remuneration, up to 4.5 times the minimum wage, with a minimum hourly rate of €7.23.
However, as far as companies in industries affected by COVID-19 are concerned, between November 1 2020 and December 31 2020, they will be able to access the same rate they benefit from using the common partial activity mechanism (i.e., 70 percent of the employees’ gross remuneration with a minimum hourly rate of €8.03 per hour).
- Information regarding trade unions and the staff representatives
The collective agreement that allows the use of the long term partial activity must contain a provision that determines how the trade unions that signed the agreement and the staff representatives will be informed of the effective use of the partial activity.
The new decrees specify that trade unions and staff representatives shall also be informed by the employer when, considering its economic and financial situation, it cannot reimburse the allowances in case of non-compliance with its commitments in terms of job retention.
Client Alert 2020-578
