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New rules on furlough leave: is your company eligible to French State aids?

PUBLICATIONS

The French government revealed it would pay 70% of wages should a business have to close or reduce activity due to the coronavirus outbreak.

It’s an important part of the coronavirus bills, a package put in place by the French government to help businesses keep on staff rather than resort to layoffs.

According to these new measures, government grants will cover up to 70% of the salary of retained workers up to €45.68 per hour NOT WORKED.

What are furloughed workers?

Furloughed workers are staff who are no longer able to go to work because their places of employment have been forced to close due to the pandemic. Employees who are working at reduced hours are also eligible for furlough subject for their company to provide adequate reasons for implementing furlough work.

Who can apply?

Any company based in France or employing people under French law will be able to apply for the scheme provided: (i) the company has contributed to the French Social security system for its French employees; and (ii) the company has a French bank account to receive the funds from the French State.

The scheme is solely applicable to employees within the meaning of French labour laws. In other words, self-employed persons, corporate mandate holders who do not have a French employment agreement, and trainees are not eligible to State aids. A separate help package for self-employed workers has now been unveiled.

How to apply?

There is no need for the agreement of each concerned employee. However, if your company has employee representatives (comité social et économique) they must be formally convened (through video conference) and consulted about the terms & conditions of furlough work.

The application itself must be completed online through a dedicated internet site.

How much does it cover?

Upon acceptance of their application, companies are eligible to a grant of up to 70% of a staff member’s hourly wage for every hour not worked. However the maximum amount that can be claimed is €45,68 (gross) per hour even if that employee usually earns more.

Employers must still pay their employees who are on furlough work and then claim payback from the French State.

Hours paid as a compensation for furlough work are not subject to social security contributions.

How long will it last for?

The furlough work scheme is available for up to 12 months and/or up to 1,000 hours per employee.

Feel free to contact our Employment Department (social@ftpa.fr) for more details.

For more information, don’t forget to join us at our weekly discussion forums around employment law issues, every Thursday at 5pm .

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