Reading time: 7 minutes.
The portage salarial sector has not been spared by the COVID-19 crisis. Portage employees have also faced a decline in business, as the companies they work for have likewise experienced a decline in business—at least some of them have.
According to the FEPS (Federation of Payroll Services Companies), the Ministry of Labor has made portage salarial eligible for partial unemployment insurance.
But what are the conditions? How are they applied? What formalities do umbrella companies and freelancers need to carry out?
Here are the 5 questions you might have about short-time work and portage salarial.
1. What is short-time work?
Also known as temporary layoffs or reduced working hours, this is a program that allows companies to reduce or suspend their employees’ work.
Article R5122-1 of the French Labor Code provides a framework for this system, setting out the valid reasons why a company may resort to short-time working:
- Economic conditions
- Difficulties in sourcing raw materials or energy
- Exceptional damage or bad weather
- Company transformation, restructuring or modernization
- Any other exceptional circumstances
This program is particularly useful during a crisis, as was the case during the COVID-19 pandemic, when many organizations turned to short-time work to limit layoffs.
It is also part of employee protection measures, allowing employees to receive compensation even in the event of a temporary decline in business activity.
2. How does short-time work work?
The request for short-time working must be made by the employer, and must comply with the grounds laid down in the French Labor Code.
To implement the partial unemployment program, you, as an employer, must submit the application for partial unemployment online through the government portal.
You have 30 days in which to make the request from the moment you put your employees on short-time working. This request can be granted for a period equivalent to 12 months.
In other words, if you apply on April 20, 2020, authorization may be granted until April 20, 2021.
When partial activity is in place, the employer receives an allowance from the Agence de services et de paiement (ASP) representing 70% of the employee’s gross remuneration (around 84% of his net salary).
This allowance is limited to a salary of 4.5 SMIC and a minimum of €8.03 per hour.
To illustrate this point, here are three examples of calculations for partial unemployment benefits, provided by the government:
Example 1:
An employee earns 10.15 euros gross per hour (1 SMIC gross) for a 42-hour week. His company’s activity was completely interrupted for three weeks.
70% of 10.15 is equal to 7.1 euros, which would be the amount of the partial activity allowance. However, this amount is less than the minimum threshold of 8.03 euros.
Since the decree stipulates that the minimum allowance is set at 8.03 euros, the hourly amount of the allowance paid to the employer will be 8.03 euros.
Partial activity takes into account the number of hours not worked, up to a maximum of 35 hours per week. 7 hours a week (42-35=7) will therefore not count towards the allowance if the employee is completely unemployed.
The employer will receive an allowance of : 8.03 x 35 x 3 = 843.15 euros.
The employer must pay the employee an equivalent indemnity. It will not be subject to social security contributions. There will be no out-of-pocket expenses.
Example 2:
An employee earns 30.45 euros gross per hour (3 SMIC gross) for a 20-hour weekly contract. His company’s activity was completely interrupted for a week.
70% of 30.45 is equal to 21.31 euros.
Partial activity takes into account the number of hours not worked, up to a limit of 35 hours per week or the contractual number of hours. 20 hours will therefore be counted towards the allowance.
The employer will receive an allowance of : 21.31 x 20 = 426.2 euros.
The employer must pay the employee an equivalent indemnity, subject to CSG and CRDS (6.7%). There will be no out-of-pocket expenses.
Example 3:
An employee earns 50.75 euros gross per hour (5 SMIC gross) for a 35-hour week. His company’s activity was completely interrupted for two weeks.
70% of 50.75 is equal to 35.52 euros.
The result is greater than 31.98 euros (representing 70% of 4.5 times the gross hourly minimum wage).
Partial activity takes into account the number of hours not worked, up to a limit of 35 hours per week or the contractual number of hours. 70 hours will therefore be counted towards the allowance.
The employer will receive an allowance of : 31.98 x 35 x 2 = 2238.6 euros.
The employer must pay the employee compensation of : 35.52 x 35 x 2 = 2,486.4 euros.
This allowance will be subject to CSG and CRDS (6.7%).
The employer will have to pay: 2486.4 – 2238.6 = 247.8 euros.
These real-world examples provide a better understanding of how short-time work benefits are calculated and the actual impact on both employers and employees.
3. Who is eligible for short-time work?
The short-time work program also applies to employees registered with umbrella companies. Although these employees are independent in their business activities, they have employee status, which gives them access to this protective measure.
All company employees may be affected by partial activity, regardless of their type of contract, seniority or working hours.
The employer must request it, and does not need the employee’s agreement.
-
Short-time work and a permanent contract under portage salarial with an assignment?
Contractors with permanent contracts can benefit from short-time working. This compensation will be paid until the end of the customer’s assignment, as stipulated in the contract.
The employee must provide his or her umbrella company with documentation—issued by the client—confirming the suspension, cancellation, or termination of his or her assignment due to COVID-19, for example.
-
Short-time work and fixed-term contracts under portage salarial?
A fixed-term contract under portage salarial is eligible for short-time work on the same basis as other employees, that is, 70% of the gross hourly wage (equivalent to 84% of the net wage).
The employee under a portage salarial arrangement must provide their portage salarial company with proof that their assignment has been suspended, canceled, or terminated—for example, due to COVID-19.
The government has yet to implement certain aspects of short-time working for freelance workers. In fact, the specific nature of the “portage salarial” status makes it more difficult to set up conditions for access to short-time working, particularly in the case of permanent “portage salarial” contracts with no assignment.
4. What social security provisions apply to partial-time work benefits?
Partial activity allowances are subject to CSG and CRDS. For non-residents of France for tax purposes, short-time working is subject to a 2.80% health contribution.
Employees affiliated to the compulsory supplementary health insurance schemes of Haut-Rhin, Bas-Rhin and Moselle are liable for the 1.50% health contribution.
5. How can you effectively manage short-time work within your umbrella company?
To effectively manage short-time work within your umbrella company, equip yourself with a powerful tool!
Excel files, incompatible software, and the proliferation of software all have their limitations when it comes to managing your human resources.
With VSPortage, a SaaS ERP software solution designed for companies involved in portage salarial, you can easily manage requests for short-time work, pay stubs, administrative filings, and the business management of your consultants.
In fact, it’s important to digitize your business management—even in the portage salarial sector—so you can focus on value-added tasks and your core business.
- Automate your processes by adapting them to unexpected situations: with this ERP system, you can track time spent on managing short-time work, apply social security contribution exemptions, and manage government reimbursements.
- Provide your contract employees with a handy tool and save time: your contract employees will be able to upload supporting documents from client companies to their account. You’ll know exactly where to find the information and won’t have to wait for a mailed document or search through your emails.
- Centralize your data: this enables efficient, error-free HR management.
- Stay connected anywhere, anytime: Its SaaS model provides secure access for all employees, making remote work possible.
Request a demo of VSPortage and learn how to simplify the administrative management and tracking of your contract employees who are on short-time work.
