Covid-19 | Adaptation of the terms and conditions for granting the supplementary indemnity and for paying sums allotted under the mandatory and optional profit-sharing schemes

Version updated on 13 May 2020

Among the measures taken to fight the spread of the Covid-19 epidemic, new grounds for taking a leave of absence (e.g., childcare or care for a vulnerable person) have been added entitling those eligible to, in principle, the following (i) daily allowances paid by Social Security, with no length of service proviso and no waiting period for the benefit thereof; and (ii) maintained legal wage, as set forth for sick leave.

Article 1 of Ordinance No. 2020-322 of 25 March 2020 (Ordonnance Arrêt Maladie et Épargne Salariale – Ordinance on leave of absence and employee savings schemes) adjusts certain common-law rules so that all employees having taken a leave of absence benefit from maintained salary, without preconditions.

Article 20 of Law No. 2020-473 of 25 April 2020 provides that, from 1 May 2020, some employees benefiting from leave of absence due to the Covid-19 epidemic will automatically be placed in a situation of partial activity, it being provided that, from this date, they will no longer be entitled to daily Social Security allowances nor to maintained wage as set forth for sick leave.

Article 2 of the Ordinance on leave of absence and employee savings schemes also allows companies to postpone the date of payment of the mandatory and optional profit-sharing sums.

TEMPORARY ADAPTATION OF MAINTAINED SALARY CONDITIONS DURING A LEAVE OF ABSENCE

Extension of the maintained salary scheme

Article 1 of the Ordinance on leave of absence and employee savings schemes temporarily suspends certain conditions governing the employer’s payment to its employees on leave of the supplementary indemnity paid in addition to the daily Social Security allowances.

Thus, as a dispensation measure in order to benefit from the supplementary indemnity paid by the employer:

• the one-year length of service provision no longer applies;
• the exclusion of certain categories of employees (employees working from home, seasonal workers, intermittent employees and temporary workers) no longer applies.

Therefore, all employees are eligible for maintained salary, whatever their length of service, provided that they can justify (i) a leave of absence specifically obtained within the scope of the Covid-19 epidemic (nevertheless, the automatic transition to a situation of partial activity from 1 May applies to most absences from work due to the Covid-19 epidemic, see below); or (ii) a leave of absence justified by an incapacity resulting from illness or an accident.

Initially, this scheme was not intended to apply until 31 August 2020.

Ordinance No. 2020-428 of 15 April 2020 removes this deadline and specifies that these adjustments are applicable to ongoing leaves of absence on 12 March 2020 as well as those which began afterwards, regardless of the starting date of these leaves of absence and will cease to apply on a date fixed by decree which may not be later than 31 December 2020.

Adaptation of the deadlines and terms and conditions for granting the supplementary indemnity

Decree No. 2020-434 of 16 April 2020 issued pursuant to the Ordinance on leave of absence and employee savings schemes adjusts the deadlines and terms and conditions under which the supplementary indemnity is granted during this period.

Article 1 of the Decree provides that:

• the waiting periods applicable to maintained salary are aligned with those applicable for payment of daily Social Security allowances:
  • for ordinary leaves of absence which started between 12 March and 23 March 2020, the supplementary indemnity is paid from the 4th day of absence (application of a 3-day waiting period);
  • for ordinary leaves of absence which started on 24 March 2020 and derogatory leaves of absence related to the Covid-19 epidemic, the supplementary indemnity is paid from the first day of absence, without waiting period;
• as a dispensation measure, for the calculation of the total duration of maintained salary, the following are not taken into account:
  • compensation periods for ongoing leaves of absence or those taken after 12 March 2020;
  • compensation periods paid during the last 12 months preceding the starting date of the leave of absence concerned.

The above-mentioned adjustments shall apply to supplementary indemnities paid:

• from 12 March to 31 May 2020 for derogatory leaves of absence related to the Covid-19 epidemic (nevertheless, see below the transition to a situation of partial activity as of 1 May 2020, applicable to employees benefiting from derogatory leave due to the Covid-19 epidemic, so that these arrangements from1 May 2020 to 31 May 2020 should only apply to employees subject to an isolation measure because of their close contact with a person infected by Covid-19 and benefiting from a derogatory leave of absence for this reason).
• from 12 March to the end of the state of public health emergency for ordinary leaves of absence.

Article 2 of the Decree provides that for derogatory leaves of absence, the amount of the supplementary indemnity shall amount to 90% of the gross salary, less the amount of the daily Social Security allowances, regardless of the total duration of the compensation as from 12 March and until 30 April 2020.

AUTOMATIC PART-TIME EMPLOYMENT FOR THOSE EMPLOYEES BENEFITING FROM SOME “COVID-19” LEAVE AS OF 1 MAY 2020

Article 20 of the Amending Finance Act 2020 (Law No; 2020-473 of 25 April 2020) provides that, as of 1 May 2020, employees benefiting from exceptional leave of absence due to the Covid-19 epidemic will automatically be placed in a situation of partial activity and, as such, will benefit from the partial activity indemnity equal to 70% of their gross salary.

This indemnity cannot be combined with the daily Social Security allowances or with the complementary wage maintenance allowance paid by the employer.

This applies to employees who are unable to continue working for one of the three following reasons:

• The employee is a vulnerable person presenting a risk of developing a serious form of the SARS-Cov-2 virus infection. To be considered vulnerable, a person needs to meet one of the eleven criteria listed in Article 1 of Decree No. 2020-521 of 5 May 2020:
  • be aged 65 and over;
  • have a previous cardiovascular infection (ATCD);
  • suffer from uncontrolled diabetes or diabetes presenting complications;
  • have a chronic respiratory pathology likely to decompensate in the event of a viral infection (obstructive bronchopneumonia, severe asthma, pulmonary fibrosis, sleep apnoea syndrome, cystic fibrosis in particular);
  • have chronic renal failure and be on dialysis;
  • suffer from progressive cancer under treatment (excluding hormone therapy);
  • be obese (body mass index (BMI) > 30 kgm2);
  • have congenital or acquired immunodeficiency;
  • suffer from cirrhosis (at least Stage B of the Child-Pugh);
  • have major sickle cell disease or a history of splenectomy;
  • be in the third trimester of pregnancy.
• The employee shares his/her home with a vulnerable person;
• The employee is the parent of a child under 16 years of age or of a disabled person who is subject to a measure of isolation, eviction or home support.

To take into account the provisions of the Amending Finance Act 2020, Decree No. 2020-520 of 5 May 2020 amends Decree No. 2020-73 of 31 January 2020 to put an end, as of 1 May 2020, to the possibility for the employees listed above to benefit from daily Social Security allowances.

POSTPONEMENT OF PROFIT-SHARING PAYMENT DEADLINES

In principle, the sums accrued under the mandatory and optional profit-sharing schemes must be paid to the beneficiaries or paid into an employee savings scheme before the 1st day of the sixth month following the end of the company’s financial year, subject to late-payment penalties.

As an exemption to this rule, Article 2 of the Ordinance on leave of absence and employee savings schemes provides that it will be possible to postpone, up to 31 December 2020, the payment of the mandatory and optional profit-sharing sums that were supposed to be paid in 2020 (particularly before 1 June 2020 for mandatory and optional profit sharing accrued in 2019 by companies whose accounting period corresponds to a calendar year).

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Gide’s Employment practice group is available to answer any questions you may have in this respect. You may also get in touch with your usual contact at the firm.

This legal update is not intended to be and should not be construed as providing legal advice. The addressee is solely liable for any use of the information contained herein and the Law Firm shall not be held responsible for any damages, direct, indirect or otherwise, arising from the use of the information by the addressee.

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