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Return to homepage  |  Last updated: 30 September, 2020

Overall, responses have focused on:

1. Time limits for the payment of social and/or fiscal instalments and direct tax rebates 
2. Mobilization of BPI France to guarantee bank lines of credit
3. Support from the State and the Bank of France (credit mediation) 
4. Simplified and reinforced short-time working scheme
5. Support in the handling of a conflict with customers or suppliers by the Business Ombudsman
   

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Postponement of deadline for payment of social security contributions

• Companies must now pay social security contributions on the  normal dates
• However, if the business is unable to pay the contributions due in  September due to lack of cash or the closure of the business, a  tailored solution will be proposed by URSSAF. Unpaid  contributions will be addressed through an amicable procedure  with a view to their inclusion in a settlement plan.
• By way of exception, deferrals of employer contributions are still  allowed for:
  • companies in sectors whose activities are restricted due to  the measures put in place to fight the pandemic (shows,  discos, festivals...);
  • employers located in Mayotte or French Guiana, due to the  extension of the health state of emergency in these  departments.
    
• The company must make a prior request to URSSAF (regardless  of its size, the company wishing to benefit from the deferral must  first fill out an application form using www.urssaf.fr).
• In the absence of a response from URSSAF within two working  days following the submission of the form, the deferral request is  taken to have been accepted.
• For employers located in Mayotte or French Guiana, the deferral  request may also relate to the payment of the employee’s share  (la part salariale) if their cash flow does not allow them to pay it.

Reminder: as a counterpart to the benefit of deferral claimed by  “large companies” during the health crisis, said companies  must have taken on a commitment to responsibility not to distribute dividends in 2020. Since 1 July 2020, social security authorities (URSSAF)  will start again auditing companies. It is expected that  they will firstly focus on the period prior to the health crisis.

Partial activity scheme (Decree #2020-325, 25 March 2020, Ordinance #2020-770, 24 June 2020 and Decree #2020-810, 29 June 2020)

• Partial activity scheme can be requested by businesses in  exceptional circumstances (article R.5122-1 of the French  Labour Code).
  • If an employment contract is suspended, the employee receives  a compensatory indemnity from their employer. This indemnity  must be at least equal to 70% of the prior gross remuneration. It  can be increased by the employer. This compensation is  increased to 100% of the previous net compensation if training is  provided.
  • The request to use the partial activity scheme and the  submission of the file is made directly online via a dedicated  website: https://activitepartielle.emploi.gouv.fr/aparts/
  • The employer must first consult with the employee  representatives (CSE or staff delegates). In the absence of an  IRP (employee representative body), the business must directly  inform its employees about the implementation of the partial  activity scheme.
  • The applicable regulation states that the administrative authority  normally has a maximum 15 day period to process the request  (article R. 5122-4 of the French Labour Code).
  • In order not to prejudice businesses, Decree #2020-325, 25  March 2020 provides that the employer may send its request  within 30 days of the placement of employees in the partial  activity scheme when the request is justified due to  exceptional circumstances.
• Ordinance #2020-770 of 24 June 2020, supplemented by Decree  #2020-810 of 29 June 2020, stipulates that the rate of the  common law allowance reimbursed to employers between 1  June and 30 September 2020 is 60% of employees' pay, up to a  limit of 4.5 times the minimum wage.
  • This hourly rate cannot be less than 8.03 euros.
  • This minimum is not applicable in the cases mentioned in the  third paragraph of article R. 5122-18 of the French Labour Code  (100% compensation in case of training).
  • It should be noted that this payment is limited to 1,607 hours per  year and per employee, regardless of the professional branch (la  branche professionnelle).

Social security contributions

• The partial activity allowance paid to employees (from  March until a date to be fixed by decree but no later  than 31 December 2020) is considered replacement  income and therefore is not subject to social security  contributions. It does remain subject to the CSG and the  CRDS at a combined rate of 6.7% after a deduction of  1.75%.
• If the remuneration is maintained above the threshold of  70% of gross salary, this social scheme also applies to  the additional compensation paid by the employer,  pursuant to a collective agreement or a unilateral  decision.

Sanctions

• The sanctions applicable for failure to comply with the  partial activity scheme provisions are cumulative:
  • Full reimbursement of the allowances received as  part of the partial activity scheme;
  • Prohibition on receiving public aid for employment  or vocational training for a maximum of 5 years;
  • 2 years imprisonment and a €30,000 fine pursuant  to article 441-6 of the French Penal Code.

Partial activity scheme – extended beneficiaries (Ordinance #2023-346, 27 March  2020, Decree #2020-435, 16 April 2020 and Law #2020-734, 17 June 2020)

The Ordinance will remain in force until a date to be fixed by decree, but  no later than 31 December 2020. The Ordinance clarifies certain details  about and extends the scope of the partial activity scheme.

• Protected employees (‘salariés protégés’)
  • Partial activity scheme compulsory for any protected employee,  irrespective of the employer’s wishes, if it affects all the  employees of the business, establishment, office or workshop to  which the person concerned is assigned or attached
• Employees working a fixed number of days (‘forfait jour’) and  employees not subject to statutory or agreed working hours
  • Number of hours taken into account for the partial activity  compensation and the partial activity allowance determined by  converting a number of days or half days into hours
• Employees of foreign companies with no fixed place of  business in France
  • Partial activity scheme applicable to foreign companies with no  place of business in France and which employ at least one  employee working in the country who is covered by the French  social security and unemployment insurance system
• Part-time employees
  • Principle: the hourly rate under the partial activity scheme paid to  part-time employees must not be less than the hourly rate of the  SMIC
  • Exception: if the part-time employee's hourly rate is less than the  SMIC hourly rate, then the hourly rate paid to the employee  under the partial activity scheme is equal to the their actual  hourly rate
• Apprenticeship and professional training contracts
  • Partial hourly working allowance equal to the percentage of the  SMIC applicable to them.
• Employees in training
  • Terms of compensation for employees in training, during a period  of partial activity, aligned with the ordinary terms of  compensation for employees during a period of partial activity
  • Hourly allowance paid to be equal to 80% of net pay, the terms  and conditions of which are to be determined by decree
• Employees subject to the equivalence regime (professions and  jobs involving period of inactivity)
  • -For the calculation of the compensation and the partial  allowance, the paid equivalent hours are taken into account
  • The duration considered to be equivalent is used instead of the  legal working hours.
• Confirmation that the benefit of partial activity scheme is  available for certain specific employees/business (ski resort  staff, employee of public enterprises, employees working at the  home of their private employer)
• Impact of partial activity scheme on rest days, paid leave and  retirement rights has been specified by Law #2020-734 with an  aim to avoid adverse consequences for the employees
• Law #2020-734 (and Decree #2020-926, 28 July 2020) introduced  a specific regime of reduced activity for the maintenance of  employment, ‘l’Arme’, also known as long-term partial activity  or ‘APLD’
  • This scheme can be adopted, from 1 July 2020, by companies  facing a lasting reduction in activity which is not likely however to  threaten their future
  • The ‘ARME’ is intended to apply for a limited period of time, and  the collective agreement or the unilateral document must be  transmitted to DIRECCTE for validation or approval on or before  30 June 2022.

Partial activity – Adjustment of the rates

• Ordinance #2020-770, 24 June 2020 provides for the adjustment  of the hourly rate of the partial activity allowance in 3 different  situations:
  • Business sectors which are covered by the rate of allowance  under standard conditions, as modified since 1 June (i.e. 85% of  the amount of the allowance paid by the employer to the  employee, or 60% of the gross salary instead of 70%);
  • Sectors identified as having been particularly affected by the  Covid-19 crisis will continue to benefit from a 100%  reimbursement of employee compensation (i.e. tourism, hotels,  restaurants, sports, culture, air transport, events, as well as  companies in related sectors which have suffered a very sharp  drop in activity or sales);
  • Employers whose main activity is in other sectors where  customers are present at their business premises and which is  interrupted as a result of the spread of the Covid-19 crisis,  excluding voluntary closures (the companies in the targeted  sectors will be determined in a decree to be issued shortly).
• Decree #2020-810 of 29 June 2020 on the temporary adjustment  of the hourly rate of the partial activity allowance
  • The decree sets the hourly rates of the partial activity allowance  according to the 3 situations addressed by Decree #2020-770, 24  June 2020 and the relevant business sectors:
    • the sectors subject to standard conditions receive an increase  in the hourly rate of the partial activity allowance to 60% of  hourly remuneration (i.e. 85% paid by the State and Unédic);
    • the sectors particularly affected continue to benefit from an  hourly rate of 70% of the allowance;
    • the sectors related to the sectors particularly affected also  continue to benefit from an hourly rate of the allowance at  70% of hourly remuneration, provided there has been a  reduction in their turnover of at least 80%.
  • The decree lists the particularly affected sectors/activities (i.e. 45  in total) as well as those related to them (i.e. 41 in total).
• Ordinance #2020-460, 22 April 2020 contains important further  information on the partial activity scheme:
  • Article 5 provides that income from the partial activity scheme  and the employer’s supplementary allowance are subject to  social security contributions when the cumulative amount is  higher than 70% of 4.5 times the monthly minimum wage.
  • Article 7 provides that overtime hours (over statutory working-  time) are deemed non-compensable if they are provided under a  collective bargaining agreement or an employment contract  entered into before the entry into force of the Ordinance.
  • Article 8 adjusts the conditions under which, pursuant to a  collective bargaining agreement or, failing that, the Social and  Economic Committee’s favourable opinion, the partial activity  scheme may be implemented at either (1) an individual level or
  • (2) based on non-uniform distribution of the unworked/performed  hours at an establishment, service or workshop level.
• Ordinance #2020-420, 15 April 2020 provides certain  clarifications to the previous texts adopted in response to the  COVID-19 crisis (applicable to partial activity between 12 March  2020 and 31 December 2020)
  • The Ordinance clarifies the provisions regarding the partial  activity scheme for certain groups and categories of employees  such as apprentices and beneficiaries of professionalization contracts receiving remuneration at least equal to the minimum  wage and senior executives.
• Decree #2020-435, 16 April 2020 and Decree #2020-522, 5 May  2020 on emergency measures for partial activity
  • The first decree clarifies the methods for calculating the  indemnity and the partial activity allowance paid to employees  whose working hours are counted in days, setting the rules for  converting working days or half-days into hours and for those  who are not subject to legal or contractual provisions relating to  working hours
  • The second decree specifies the methods for calculating the  indemnity and the partial activity allowance, in particular for flight  personnel.
  • The rules applicable to civil aviation flight crews, freelance  journalists, ushers' representatives, home workers paid on a  piecework basis, artists, technicians and workers in the  performing and recorded arts, models as well as senior  executives and employees hired by an umbrella company (under  a portage salarial arrangement) under a permanent contract are  also specified by those decrees.

Emergency measures relating to paid leave, working hours and rest days (Ordinance  #2020-323, 25 March 2020)

The provisions set out below cannot be extended beyond 31 December  2020 and cannot exceed 10 days in total.

Paid leave

• In-house company agreement or branch level collective  bargaining agreement may set out the conditions under which the  employer can require the taking of paid leave, or modify the  dates of leave already scheduled, with a limit of up to 6 working  days, and respecting a notice period of one clear day.
• This also applies to paid leave days accrued before the start of  the period during which they will be taken.
• The agreement may authorize the employer to divide the leave  without the employee's consent.

“RTT” (Reduced Working Time)

• By way of exception to an agreement or collective agreement  which institutes a scheme for reduced working time, the employer  may impose or modify the RTT held by the employee, including  those of his or her choice, subject to one clear day's notice.

Rest days of staff working under the ‘forfait jour’ system (fixed  number of days)

• The employer may modify or impose, subject to a notice period of  one clear day, rest days (or half rest days) to employees working  on a fixed-day (forfait jour) basis, as an exception to the  collective bargaining agreement relevant to the company,  establishment or branch.

CET (Time Savings Account)

• Possibility of imposing the taking of days earned on the time  savings account.

Companies operating in sectors essential to the stability of the  economy and national security

• Provisions will cease to be effective on 31 December 2020
• ‘Essential’ sectors will be specified by decree
• Working hours: derogation from public policy rules
  • Maximum daily working time increased to 12 hours (vs. 10  hours)
  • Maximum working time for night work increased to 12 hours  with compensatory time-off (vs. 8 hours)
  • Daily rest period reduced to 9 hours with the possibility of  compensatory time-off for overtime worked (vs. 11 hours)
  • Increase in working hours to 60 hours per week (vs. 48 hours)
  • Increase in weekly working time calculated over a period of  12 consecutive weeks to 48 hours (vs. 44 hours)
  • Increase in weekly night working hours calculated over a  period of 12 consecutive weeks to 44 hours (vs. 40 hours)
  • The employer must inform the CSE (Social and Economic  Committee) and the DIRECCTE without delay
• Sunday rest
  • Possible to derogate from the Sunday rest rule by allocating  the weekly rest in shifts
  • Applicable to companies who provide services necessary for  the performance of the principal activity of those in sectors  essential to the stability of the economy and national security
  • Provisions applicable in the departments of Moselle, Bas-  Rhin and Haut-Rhin.

Other social measures

Mandatory and voluntary profit-sharing schemes (Ordinance  #2020-322, 25 March 2020 and Decree #2020-434, 16 April 2020)

• Notwithstanding the provisions of the French Labor Code  governing the payment of sums due in respect of mandatory and  voluntary profit-sharing schemes and the contractual stipulations  applicable in the company, the deadline for payment to  beneficiaries or allocation to an employee savings plan or a  blocked current account, of sums allocated in 2020 under a  mandatory and voluntary profit-sharing scheme, is postponed  from 1 June 2020 to 31 December 2020.

Professional training (Ordinance #2020-387, 1 April 2020 and Decree #2020-435, 16 April 2020)

• Extended deadline to comply with professional training  obligations until 31 December 2020
• Term of apprenticeship contracts and professional training  agreement extended due to the impossibility for the closing of the  apprenticeship and professional training bodies

Overtime hours

• When realized during the health crisis, overtime hours will be  exempted from income tax and social security contributions up to  an increased amount of €7,500 (instead of €5,000)

Exceptional bonus paid in 2020 to civil servants

• Will be exempted from income tax and social security  contributions

Liability of the legal representative of the companies vis-à-vis  the employees (Law #2020-546, 11 May 2020)

• Specific reference to the health crisis has been introduced in law  but does not result in a waiver or as a mitigating factor of the  safety obligations of the employer vis-à-vis the employees.

The 3rd Amended Finance Bill (enacted on 23 July 2020)  provides for a number of social measures. In particular social  security authorities are allowed to close before 31 December  2020 under specific proceedings any audit not settled before 23  March 2020 by the sending of a letter of comments (‘letter  d’observations’).

Legal-related measures

Holding of general assembly meetings, boards of directors and supervisory boards  (Ordinance #2020-321, 25 March 2020 – Decree #2020-925, 29 July 2020)

• Applicable to all legal persons and entities without legal personality  under private law
• Applicable to general assembly meetings that cannot be held in person  for COVID-19-related health reasons.
• Applicable retroactively from 12 March until 30 November 2020 (Decree  #2020-925, 29 July 2020).
• The Ordinance specifies that a decree shall specify, as necessary, the  conditions for the application of this order

General assembly meetings

• Adjustment of rules in respect of convening and information
  • Listed companies: a general assembly meeting is not invalid  merely because it cannot be convened by postal notice due  to circumstances beyond the company’s control
  • All entities: a member may request that a document or other  information is provided by email prior to the holding of a  meeting provided that the member supplies its email address  for receipt of the document or information.
  • Specific situation: formalities for convening sent before the  Ordinance
    • Information of the members of the general assembly by  any means that ensures they are effectively informed, at  least three working days before the date of the meeting
    • No need to renew the convening formalities - Specific  conditions for listed companies
• Adjustment of the rules in respect of participation and  proceedings
  
  • The body responsible for convening a general assembly  meeting may decide that the meeting will be held without the  members and other persons entitled to attend, being  physically present, but instead by telephone or by audiovisual  conference.
• Members to be informed by any means that ensures they  are effectively informed of the date and time of the general  assembly meeting as well as the conditions under which  they will be able to exercise the rights attached to their  membership or the right to attend.
  • Calculation of quorum and majorities: despite any provision of  the articles of association or founding documentation, it may  be decided that the members of the general assembly  meeting who participate by means of telephone or  audiovisual conference (allowing them to be identified) are  taken to be present.
    • The technology must allow at least the transmission of the  voice of the participants and satisfy technical  characteristics permitting the continuous and  simultaneous transmission of the proceedings.
    • Specific conditions for public limited companies and  meetings of bondholders
    • Despite any provision of the articles of association or  founding documentation, possibility of written consultation  where permitted by law
• These provisions apply irrespective of the subject matter of the  decision on which the general assembly meeting is called upon  to rule.

Professional administrative, supervisory and management  bodies

• Despite any provision of the articles of association or procedural  rules, members of these bodies be taken to be present at the  meetings of these bodies if they participate by means of  telephone or by audiovisual conference such that they can be  identified and their effective participation is guaranteed.
• The technology must allow at least the transmission of the voice  of the participants and satisfy technical characteristics permitting  the continuous and simultaneous transmission of the  proceedings
• Despite any provision of the articles of association or procedural  rules, the decisions of these bodies may be taken through written  consultation of members under conditions which ensure the  collegiality of the proceedings
• These provisions apply irrespective of the subject matter of the  decision on which the body is called upon to rule.

Measures relating to the closing and approval of accounts (Ordinance #2020-318, 25  March 2020)

Applicable to all legal persons and entities without legal personality  under private law.

• Extension by 3 months of the time limit for the management  board to present to the supervisory board the annual financial  statements and, if applicable, the consolidated financial  statements, the related management report and the report  referred to in Article L. 225-68 of the French Commercial Code
  • Extension applicable to entities whose FY ends between 31  December 2019 and the ending date of a one month-period as  from the end of the state of health emergency (which occurred on  10 July 2020)
  • Exception: This extension does not apply to entities that have  appointed a statutory auditor if the latter issued its report on the  accounts before 12 March 2020
• Extension by 3 months of the time limits imposed by the legal  provisions or the articles of association of an entity to approve  the accounts and the documents attached to them, where  applicable, or to convene the general assembly meeting needed  to approve them
  • Exception: This extension does not apply to entities that have  appointed a statutory auditor if the latter issued its report on the  accounts before 12 March.2020
  • Extension applicable to entities whose FY ends between 30  September 2019 and the ending date of a one month-period as  from the end of the state of health emergency
• Extension by 3 months of the deadline imposed on private law  entities benefiting from a public subsidy) to produce the  financial report mentioned in the 6th paragraph of Section 10 of  Law #2000-321, 12 April 2000
  • Provision applicable to financial records relating to financial years  ending between 30 September 2019 and the ending date of a  one month-period as from the end of the state of health  emergency
• Extension by 2 months, counted from the end of the FY, of the  time limit given to the liquidator to prepare the annual accounts  and the related report
  • Extension applicable to entities whose FY ends between 31  December 2019 and the ending date of a one month-period as  from the end of the state of health emergency.

Measures related to restructuring and insolvency procedures (Ordinance #2020-341,  27 March 2020 as amended by Ordinance # 2020-596, 20 May 2020)

Ordinance applicable to ongoing procedures.

• Declaration of insolvency
  • During the whole period of health emergency state until 23 August 2020 is assessed on the basis of the financial situation of the debtor at the date of 12 March 2020
  • Officers of the bankruptcy proceedings can ask for the declaration to be postponed
• Requests of payment of wages before the AGS (public body guarantying the payment of wages to employees of insolvent companies)
  • Statements of wages to be paid submitted in a 10-day or a 3- month period depending on the nature of the amounts to be paid
  • Possibility to manage information process to staff representatives after submission of the request Conciliation procedure
• Conciliation procedure
  • Can be extended for a period up to 5 months after the end of the health emergency state
• Safeguard plan and restructuring plans
  • Until 23 August 2020,
    
    • Duration can be extended by a 5 month-period at the request of the judge (extended period of up to one year at the request of the public prosecutor)
    • Upon request of the parties, possibility for the President of the Commercial court to postpone all the deadlines applicable to the various bodies to the procedures by a 5 month-period
  • Within a 6-month period as from 23 August, at the request of the judge or the public prosecutor, duration of the plans can be extended by the Commercial Court by a period up to one year.
  • Until 31 December 2020, safeguard plan and restructuring plans can be extended by a a period up to 2 years at the request of the judge or the public prosecutor resulting in a duration up to 12 years in total
• Procedural deadlines are amended to facilitate restructuring and insolvency procedures
  • Flexibility has also been introduced until 31 December 2020 to facilitate restructuring plans which include disposal of assets/business with a view to reduce the dismissal of employees