The Ordinance of 14th October 2020 continues the logic of modulating the rate of the partial activity allowance paid to companies, depending on their exposure to the current health crisis.
It provides for an ordinary rate, and an increased rate of allowance paid to companies that are hardest hit by the effects of the health crisis:
the standard rate of allowance paid to the employer is, until 31st October, 60 % of gross pay, up to a limit of 4.5 Smic, then 36 % from 1st November.
The increased rate, which should be equal to 70 % of gross pay, is applied to three types of company:
- Those who exercise their main activity, "in those sectors of tourism, hotels, restaurants, sports, culture, air transport and events, which are particularly affected by the economic, and financial consequences of the spread of the Covid-19 epidemic with regard to the reduction of their activity, notably because of their dependence on public reception". These sectors are those on the list S1 of the decree of 29th June 2020.
- Those who exercise their main activity, "in sectors whose activity depends on those of the sectors mentioned in the previous paragraph, and which are experiencing a very sharp drop in turnover". These sectors have been listed in the list S1 bis, which now includes private security.
- Those operating in other sectors, whose activity, "involves receiving the public and is partially or totally interrupted due to the spread of the Covid-19 epidemic, excluding voluntary closures".
In concrete terms, the companies in the sectors on the S1 bis list must, as already indicated by the GES, continue to justify a "very sharp drop" in their turnover in order to benefit from the previous measures and have a zero balance to pay. According to the current rules set out in the decree of 29th June, a decrease of at least 80 % must be justified.
Thus, for private security companies, the applicable rules are as follows:
- If the private security company is unable to provide proof of an 80 % reduction in its turnover, it will be paid by the public authorities an allowance rate under ordinary law equal to 36 % of gross pay as of 1st November;
- If the same company shows a fall of at least 80 % in its turnover, it should be able to benefit from the increased rate, which should be equal to 70 % of the gross salary. However, this application of the increased rate is subject to the forthcoming publication of the amended version of the S1 bis list.
As regards the modulation of the rate of compensation paid to employees this time, the ordinance introduces a real novelty here, with two rates of compensation (decree to be published):
- a rate of common law announced at 60 % of gross earnings up to a limit of 4.5 Smic;
- and an increased rate remaining at 70 % of the gross, for employees of companies benefiting from the increased rate of allowance.
This provision will be applicable between 1st November and 31st December 2020, with the increased rate scheduled to disappear on 1st January 2021.
Finally, concerning the fate of work-study students, the ordinance provides that, "between 1st November and 31st December 2020, employees on apprenticeship, or professional training contracts, whose remuneration is lower than the minimum wage shall receive a partial hourly activity allowance, paid by their employer, in an amount equal to the percentage of the minimum wage applicable to them under the provisions of the Labour Code and, if applicable, the collective bargaining provisions applicable to the company".
Moreover, "the hourly rate of the partial activity allowance paid to employees [under an apprenticeship or professionalisation contract] whose remuneration is greater than, or equal to the minimum wage, may not be less than the hourly rate of the minimum wage". In this case, employers are not subject to the rates of allowance described above: they will receive an allowance equal to the allowance paid to employees, thus cancelling out the remainder payable by employers.