In order to reduce the number of people in a business at any given time, or to manage the increased financial burden of Covid-19 restrictions, many French businesses have adopted systems of partial unemployment in which employees are employed for a reduced portion of their contracted hours.
What is the partial unemployment scheme?
To manage the impact of partial unemployment on employees, employers, and businesses, the French government has introduced a long-term partial unemployment scheme offering benefits for affected employees.
Under the activité partielle de longue durée (APLD) scheme, employers can reduce the amount of compensation they pay their employees for ‘non-working days’, with the government stepping in to make up the difference – and effectively ensuring that employees continue to receive their full pay. Employers accessing the APLD may not reduce their employees’ work hours by more than 40% for the duration of their partial unemployment status.
The APLD enables employers to receive a monthly government allowance corresponding to their employees’ non-working days up to a maximum of 1,607 hours per year per person (or 100 hours if the partial unemployment is due to modernization of the workplace). The allowance scheme varies by sector and employment activity.
In August 2020, French Prime Minister Jean Castex announced that the partial unemployment scheme would be extended and would be available for two years for eligible businesses.
How to claim partial unemployment allowance
To obtain their government allowance for non-working days, employers must apply to the French Labour Directorate, submitting an authorization request and a supporting opinion from their Works Council. Once their eligibility to the partial unemployment scheme has been confirmed, employers can submit monthly reimbursement requests to the French Service and Payment Agency (ASP).
The partial unemployment scheme is available to all French employers and is not necessarily contingent on a business struggling to cope with the effects of the global pandemic (although that has obviously been a significant factor in 2020). Employers can apply for the partial unemployment allowance for the following reasons:
- Adverse economic conditions
- Difficulties in supply lines
- Catastrophic damage or bad weather of an exceptional nature
- Business restructuring, transformation, or the modernization of a company’s buildings and facilities
- Any other exceptional circumstances, such as the Covid-19 global pandemic.
Impact of the partial unemployment scheme
The French government is hoping that the APLD scheme prevents a surge in unemployment across the country as a result of the Covid-19 restrictions. In March 2020, 7.2 million French employees claimed partial unemployment, while that number had reduced to 2.4 million by July 2020. Research suggested that the French construction, commerce, hospitality, science, technical, transport and storage sectors had benefited the most from the APLD scheme.