France: COVID-19 Short-time Work for Childcare Decree lowers remaining Costs for Employers to Zero
Decree n°2021-435 dated 13 April 2021, published in France’s Journal Officiel the following day, modifies the rate of the Short-Time Work allowance paid to the employer for employees under private law who are vulnerable; or parents of a child under the age of 16; or a person with a disability who is subject to an isolation, eviction or home maintenance measure and who is unable to continue working. The compensation paid to employers who have an employee in one of these situations will be increased to 70% of the employee’s previous gross pay, regardless of the sector of activity. The provisions of this decree apply to hours of unemployment as from 1 April 2021.
As a reminder, this 70% allowance rate previously applied only to those companies most affected by the consequences of the COVID-19 health crisis: those in protected sectors as well as those that were closed down administratively as well as companies in ski resort areas (provided that they have suffered a loss of turnover of at least 50%).
For other companies, the compensation they receive is, in principle, limited to 60% of the employee’s previous gross remuneration, which leaves the employer with a remaining balance to pay. It is these companies that will be able to benefit from the increased rate of allowance when they place, in partial activity, employees recognised as being vulnerable to COVID-19, or parents of a disabled child or a minor under the age of 16, who are unable to telework.
For these employers, the stakes are high: the 70% compensation paid by the State to the employer covers the entire compensation that the employer would have to pay to the employee. In fact, when the employee is placed on a short time work schedule, he/she receives an allowance equal to 70% of his or her gross salary, which represents, on average, 84% of his/her net salary.