The French government is implementing the measures promised to massively develop short-time working and allow businesses to survive during the crisis. But what does this new activity regime consist of ?

Allowing businesses and households to get through the confinement period without too much damage is now the objective of the government faced with a major health crisis coupled with a collapse in economic activity linked to containment measures. Wednesday, in the Council of Ministers, the Minister of Labor, Muriel Pénicaud, detailed the arrangements that will be put in place by orders or ordinances in his ministerial field to get through the crisis. This is to avoid massive layoffs, while protecting the incomes of the weakest. 

An allowance entirely covered by the State and the Unedic

As already announced at the start of the crisis, companies affected by the crisis will be able to make massive use of a new partial activity regime better known as short-time working. The request must be made to the Regional Directorate for Enterprise, Competition, Consumer Affairs, Labor and Employment (DIRECCTE). A decree will provide that companies will have thirty days to apply from the date on which they want to start the device.

The employee placed on short-time working will receive 84% of his net salary, borne entirely by the public authorities up to 4.5 times the minimum wage for hours not worked, which is completely new. France is thus inspired by a system that had enabled Germany to get through the 2008-2009 crisis with far fewer layoffs, despite a much deeper recession in 2009.

This therefore allows companies to have part of their payroll borne by the State without laying off workers, despite the drop in activity linked to the health crisis. Note that Air France (French national airline), hard hit by the closure of the borders and the collapse of the number of passengers, has already filed a massive short-time working claim.

Who is concerned ?

An ordinance which should be adopted on Friday opens short-time working to childminders, day workers, sales representatives, as well as homeworkers. Seasonal workers will be entitled to it at least until April 15, promised Muriel Pénicaud. Under specific conditions to be determined, the system will also be extended to the RATP (Paris public transport network) and the SNCF (National Society of French Railways) to enable them to weather the crisis.

Temporary workers, the first to suffer from the crisis, are not forgotten. They will be entitled to short-time working, whether they are actually on a mission in a company or simply awaiting a mission with their contract in a temporary agency. This will affect several hundred thousand people.

“We have never faced such an influx of requests,” already recognized Muriel Pénicaud, at the exit of the Council of Ministers. The bill provided for in the emergency law reached 8.5 billion euros, but it could be far exceeded. It will be assumed mainly by the State, but also for a third, by Unedic (French association responsible for managing unemployment insurance). This will therefore seal the unemployment insurance accounts. At the last count, 100,000 companies had already made a request, which represents 1.2 million employees in the country.

Short-time working, victim of its success

It is now almost 20% of private sector employees who are affected. Companies may be tempted to abuse the generosity of the device. Indeed, the risk is that companies will take advantage of this to have their payroll borne by the community, while asking their employees in partial activity to work more than what is officially declared from their home.