Legal Insights

Partial activity (also referred to as short-time work) allows the employer to reduce the working time of his employees or to temporarily close his establishment or part of it in order to maintain employment, and to compensate in part for the loss of remuneration suffered by employees as a result of the unworked hours. Because of the economic consequences associated with the spread of the Covid-19 pandemic, a draft Decree encourages and facilitates the use of the partial activity scheme.

Soulier Avocats provides an update on the latest measures in the form of a Q/A.

While French households are beginning to organize themselves, French companies are seeking to protect themselves against the devastating financial effects of Covid-19. Partial unemployment mechanism, deferment of the payment of social security contributions and taxes, temporary easing of the burdens on companies, injection of external liquidity, etc. A growing number of measures are being taken to protect and support companies during this highly critical period.

To take into account the impact of the covid-19 pandemic on economic activity, the URSSAF network introduced on March 16, 2020 a measure allowing employers to defer the payment of their social security contributions for a period of up to three months.

Tout opérateur économique se pose légitimement la question : la pandémie de coronavirus COVID-19, permet-elle de suspendre ou de mettre fin à ses obligations prévues par un contrat commercial devant s’exécuter en France en invoquant l’existence d’un cas de force majeure ?

Partial activity: A press release from the Ministry of Labor specifies that companies have 30 days to submit their application to get a 100% compensation coverage, up to a maximum of 4.5 the value of the minimum wage.

“France’s attractiveness improved further in 2018, despite the slowdown in global growth, economic tensions and rising protectionism”. This assessment, mentioned in the 2018 annual report on foreign investment in France issued by Business France (French Agency responsible for fostering export growth by French businesses and facilitating international investment in France) confirms France’s enhanced attractiveness in 2018.

Attractiveness, however, does not mean lack of control, provided that a simple and fast legal framework is offered to foreign investors.