Facing Coronavirus In France: Focus On Partial Unemployment

Morgan Lewis
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Morgan Lewis

The French government has enabled expedited procedures for employers to facilitate partial unemployment during the coronavirus (COVID-19) outbreak and has slightly increased the hourly employment allowance.

In order to cope with a rapidly deteriorating economic situation due to the COVID-19 outbreak, many companies in France have already expressed their wish to use the partial unemployment scheme. Partial unemployment (or technical unemployment) for a company consists of reducing the working week or temporarily closing all or part of an establishment.

In view of the current situation, the French government has shared its intention to facilitate the conditions for recourse to this system. This is an opportunity to take stock of (1) the procedure to be followed in order to benefit from partial unemployment; and (2) the advantages offered by this scheme.

Procedure

Information of Employees and Employee Representatives

Recourse to partial unemployment requires the prior information of the employee representatives and/or the employees themselves.

In undertakings with more than 50 employees, the employer must first consult the Social and Economic Committee (CSE) for an opinion on

  • the reasons for recourse to partial unemployment,
  • the professional categories and activities concerned,
  • the level and criteria for implementing reduced working hours, and
  • the training measures envisaged or any other commitment made by the employer.

Companies without staff representatives must inform their employees directly of their intention to use partial unemployment.

Prior Authorization of the Administration

In accordance with the provisions of Article R. 5122-2 of the French Labor Code, before starting partial unemployment, the employer must send a prior request for authorization for partial unemployment to the direction régionale des entreprises, de la concurrence, de la consommation, du travail et de l'emploi (DIRECCTE) (Regional Directorate for Enterprises, Competition, Consumer Affairs, Labor and Employment) of the department in which the establishment is located.

This request can be made online.

The application must provide

  • the reasons for the use of the partial unemployment,
  • the foreseeable period of the sub-activity, and
  • the number of employees concerned.

The prior opinion of the CSE must be attached to the application.

DIRECCTE must notify its decision to the employer within 15 days. It must give reasons for any refusal.

However, the French minister of labor has recently announced that her services are currently being mobilized to reduce the response time to 48 hours despite the recent increase in requests.

In the absence of a response within 15 days, the authorization is deemed to be granted. The progress of the application can also be followed online.

Advantages

In case of recourse to partial unemployment, employees affected by a loss of salary must be compensated by an indemnity paid by the employer.

In return, the employer receives an allowance from the state corresponding to the so-called “hours off work.”

An employer may receive the partial unemployment allowance up to a maximum of

  • 1,000 hours per year and per employee whatever the professional branch; and
  • 100 hours per year and per employee if the partial unemployment is due to modernization work on the company's installations and buildings.

In principle, an employee placed in partial unemployment receives an hourly allowance, paid by the employer, corresponding to 70% of the employee’s gross hourly pay.

Currently, the partial unemployment allowance reimbursed to employers is 7.74 euros per hour off work (and 7.23 euros per hour in companies with more than 250 employees).

The French minister of labor has announced on 8 March 2020 that this allowance will soon be raised by decree to 8.04 euros, i.e., the level of the net minimum monthly salary (Smic).

The President of the French Republic nevertheless announced on 12 March 2020 that the allowance could finally cover the full hourly allowance paid to the employee.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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