With France facing a resurgence of the epidemic and extended health restrictions, the government is postponing the reduction of the partial activity reimbursement rate to help companies affected by the crisis.

At the moment, the government can only adjust the level of compensation until June 30, 2021. However, an extension until December 31, 2021, is under discussion.[1]

I. Compensation for employers and employees depending on a company’s situation

  1. 100% coverage until June 30, 2021, for the most struggling companies

Companies that can benefit from this extended compensation are:

  • Companies serving the public that are totally or partially closed
  • Companies subject to local health restrictions that are suffering a loss of turnover of at least 60%
  • Companies located in ski resorts that are suffering a loss of turnover of at least 50%
  • Companies in protected sectors that are suffering a loss of turnover of at least 80%[2]

Coverage of 100% will continue to apply for these companies until June 30, 2021.[3]

  • Employer compensation

The compensation rate is set at 70% of the gross reference remuneration, within the limit of 70% of the 4.5 minimum wage (French “SMIC”).

The general case rates set at 36% will apply from July 1, 2021.

  • Employee compensation

For employees of companies struggling the most, the indemnity remains calculated at a rate of 70% until June 30, 2021. As of July 1, 2021, these employees will switch to the general case, with the indemnity calculated at a rate of 60%.[4]

  1. 100% coverage extended for protected sectors

Protected sectors are those that are most affected by the crisis. They are listed along with related sectors in the appendices of a decree dated June 29, 2020.[5]

  • Employer compensation

For companies in protected sectors, the 100% coverage ends on March 1, 2021, with a decrease in the allocation rate from 70% to 60%. This measure also applies to related sectors, provided that a company’s loss of turnover is of at least 80%.

The 60% rate will apply from March 1 to March 31, 2021, reducing to 36% from April 1, 2021.

  • Employee compensation

The indemnity remains calculated at a rate of 70% until March 31, 2021. As of April 1, 2021, these employees will switch to the general case, with the indemnity calculated at a rate of 60%.[6]

  1. General case: rate reduction deferred to March 1, 2021

If a company is not in one of the above-mentioned cases, the general case scenario with lower compensation applies.

  • Employer compensation

The decrease in the level of reimbursement to employers has been further delayed, and will only apply as of March 1, 2021. From this date, the rate of the partial activity allowance will be reduced from 60% to 36% for companies in the general case category.

  • Employee compensation

As of March 1, 2021, the rate of the partial activity allowance and the limit on the employees’ allowance at their usual net salary will be reduced from 70% to 60%.

The 4.5 SMIC limit on the reference hourly rate used to calculate the allowance became effective on January 1, 2021.

  1. Long-term partial activity scheme (French “APLD”) – an alternative to the common law scheme with a counterpart

In order to benefit from better compensation, companies can implement the so-called long-term partial activity scheme (APLD). Its rates are intended to last until the end of this temporary arrangement, on June 30, 2022.

  • Employer compensation and its counterpart

An employer can receive compensation of 60%, within the limit of 60% of the 4.5 minimum wage. When the rate increased to 70% is applicable within the framework of the common law scheme, it must also be applied to APLD.

This compensation is higher than in general case scenario. In counterpart, a company has an obligation to make some commitments relating to maintaining employment and vocational training. In fact, this scheme aims to protect employees covered by it against economic dismissal.

If an employee covered by this commitment is dismissed, the administration may ask the company to reimburse certain sums. In addition, the administration can interrupt the payment of the APLD allowance if it finds that the company is not complying with its commitments. This decision takes into consideration the economic and financial situation of the company.

  • Employee compensation

The indemnity is calculated at a rate of 70%, limited to 70% of the 4.5 minimum wage.

II. Compensation in the case of « childcare » and « vulnerable person » partial activity

Until the end of February 2021, the allowance reimbursed to an employer remains at 60% (general case) or 70% (increased rate) depending on the employer’s sector of activity. Employees, for their part, can receive an allowance at a rate of 70%.

As of March 1, 2021, the rate of reimbursement to employers for employees placed in partial activity for « childcare » or for a « vulnerable person » is unified. Regardless of the sector of activity, the employer receives an allowance at a rate of 60%. The allowance due to employees is still paid at a rate of 70%.

III. Social regime of indemnities paid to employees within the framework of the partial activity

The indemnities paid to employees are not considered as wages, but as a replacement income.[7] The simplified social regime was made permanent by the law on the financing of social security for 2021.[8] This social regime also applies to the indemnity paid under the APLD scheme.

  1. The legal indemnity

The legal partial activity allowance is exempted from social security contributions for employees and employers. However, this indemnity is subject to the CSG at a rate of 6.20%, and the CRDS at a rate of 0.50%. These contributions are calculated based on 98.25% of the compensation paid (a reduction of 1.75% for professional expenses).

If the CSG and CRDS payments reduce the net amount of allowance cumulated with the remuneration of activity under the minimum wage, these payments are not owed.

  1. The complementary indemnity

The employer may pay an additional indemnity pursuant to a collective agreement or a unilateral decision of employer (French “DUE”).

The allowance paid by the employer in addition to the legal allowance will be subject to the same social regime as the legal allowance, within the limit of the 3.15 minimum wage.

The amount of additional compensation paid will be subject to contributions and social contributions applicable to earned income under the conditions of common law.[9]


Our team remains at your disposal to assist you and answer any questions you may have.


[1] A new draft executive order was sent on February 2, 2021, to the social partners for consultation.

[2] To be confirmed. This category, meaning companies in a protected sector that suffers a loss of turnover of at least 80%, appears in draft decrees not yet in force.

[3] Executive order n ° 2020-1639 of December 21, 2020, art. 4 and Decree n °2020-1681 of December 24, 2020, art. 2

[4] Decree 2020-1786 of December 30, 2020, art. 8

[5] Decree n° 2020-810 of June 29, 2020, recently modified by decree n° 2021-70 of January 27, 2021

[6] Decree n° 2021-89 of January 29, 2021

[7] Article L. 5122-4 of the Labor Code

[8] Law n° 2020-1576 of December 14, 2020, art. L. 135-2 of the Social Security Code

[9] URSSAF site on the social regime of partial activity