France: New decrees on Short Time Work for the pandemic
In light of the health situation and the closure and lockdown measures taken by the public authorities to combat the pandemic, the reform of the Short Time Work system initially planned to come into force on November 1 has been postponed until January 1, 2021.
Three decrees dated October 30, 2020 specify the rules for “classic” short time work and long-term short time work as of November 1, 2020. The hourly allocation rate and the terms and conditions for implementing the two short-time schemes are set.
The regime applicable until December 31, 2020 is the one implemented since June 1: a short time work indemnity at 70% of the gross reference salary paid to employees and a short time work allowance at 60% of this salary or 70% in sectors particularly affected by the epidemic paid to the employer.
As of January 1, 2021, the rate of the short-term work indemnity paid to employees will decrease from 70% to 60% of gross reference compensation. The indemnity will be calculated on a capped basis: the maximum remuneration taken into account for the calculation of the hourly indemnity will be equal to 4.5 times the hourly rate of the minimum wage. In addition, “the net indemnity paid by the employer may not exceed the employee’s usual net hourly remuneration”.
For the allowance paid by the state to companies, the hourly rate will be equal to 36% of the gross remuneration, limited to 4.5 times the minimum wage. There will be a minimum of 7.23 EUR per hour, i.e. the equivalent of 90% of the net hourly minimum wage. This floor will not be applicable for hours worked by employees on apprenticeship or professionalization contracts.
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