Clarifications relating to short-time work

The French Labour Minister has published a Q&A relating to short-time work on 29 March 2020. Hereafter an overview of the clarifications provided by this document.

Even if it does not substantially change standard short-time work scheme, the new Minister’s Q&A provides for clarifications in the context of COVID.

Collective reduction in working time

In case of collective reduction in working time, the Q&A confirms that the employer can decide to implement a shift system in which employees will alternatively be placed in short-time work per production units, workshops, services, etc.

Social and economic council opinion

In principle, the employer must obtain the staff representatives’ opinion before requesting an authorization for short-time work before the Administration.

Now, when short-time work is justified by COVID crisis the employer can request the representatives’ opinion after filling its application to the Administration. Employer benefits from 2 months to send this opinion to the Labour Administration.

Short-time work duration and cap

Short-time work may now last 12 months maximum (against 6 months until now).

This cap corresponds to 1.607 working hours per year per employee (against 1.000 hours until now).

Compensation limit

For the recall, employees in short-time work receive a compensation for unworked hours amounting to 70% of their gross remuneration. Employers can then ask for subsidies amounting to 70% of the employees’ compensation within a limit of 4.5 times the statutory minimum hourly wage” (so-called “SMIC).

The present Q&A specifies that the amount of the reimbursement is limited to 70% of 4.5 statutory minimum hourly wage (i.e. €31,98 in metropolitan France and €24,13 in Mayotte).

This means that for an employee earning 6,927 euros (i.e. 4.5 SMIC), the employer must pay said employee 70% of this salary (i.e. 4,849 euros) and will get subsidies of 4,849 euros. Therefore, this costs nothing to the employer. Whereas if the employee earns 8,000 euros, the employer must pay 5,600 euros to the employee (70% of 8,000) but will only get 4,849 euros as subsidies.

Please note that certain collective bargaining agreements provide for more favourable provisions with respect to the level of compensation to be paid by the employer to the employee during short-time work periods.

Companies with several establishments

Until now, the request to benefit from short-time work had to be made per establishment.

As of April 2020, a company will have the possibility to make only one request for all its establishments at the same time.

Sanctions and controls

In the Q&A, the government states that sanctions will be applied to companies in case of fraud in the application of short-time work rules.

Notably, if an employer asks for short-time work compensation for hours during which an employee actually worked or was on paid vacation, he might be punished for illegal work (i.e. criminal sanctions, loss of benefit from public aids for 5 years and reimbursement of improper received subsidies).

Eligible employees

Finally, the Q&A does not clarify the situation of top executives in the company (so-called “cadres dirigeants”).

In principle, these employees are not eligible to this scheme. However, the government initially announced that every employee would be helped and covered by short-time scheme.

An application decree should be soon adopted to specify terms and conditions of these measures.