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French companies vs COVID-19

Governmental measures and other measures to support the French economy as of 18 March 2020.

19 March 2020

Publication

In this time of exceptional crisis, the announcements made by the French Government, the decrees and circulars forthcoming, as well as the many publications made on the websites of the various public authorities and the information from the previous day may already be out of date. The measures described below must therefore all be taken with the greatest care.

We invite you to contact us if you have any query or need help in understanding the various measures, so that we can update, if necessary, the measures that concern you.

1. Measures taken by the French Government relating to social measures and organization with your employees

1.1. Measures relating to the closure of certain establishments

Complementary sources:
https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000041728476&categorieLien=id

1.2. Measures relating to the introduction of short-time working

Some preliminary information:

  • Definition: reduce the working time of its employees when a company is facing economic difficulties with a reduction in its business activities;
  • Purpose: to preserve employees by avoiding redundancies, while reducing the cost of salaried employees who are unoccupied for a fixed period;
  • Short-time working form:
    • Temporary closure of all or part of the establishment (employment contracts suspended, and employees must not work during the period concerned);
    • Reduction of working hours.
  • Case: when the company is forced to reduce or temporarily suspend its activity, in particular due to any exceptional circumstances (such as the current epidemic) or to justify real economic difficulties.
  • The Ministry of Labour gives 30 days for companies to declare their short-time working, with retroactive effect.
  • At present, an employee placed in partial employment receives an hourly allowance paid by the employer, at the usual pay due date, corresponding to 70% of his gross hourly pay (which, according to the Ministry of Labour, would correspond to approximately 84% of the net salary).
    • The Ministry of Labour has indicated that a decree will be issued in the next few days that would reform the partial activity scheme, which will make it possible to cover 100% of the compensation paid to employees by companies up to a limit of 4.5 times the minimum wage (SMIC). Short-time work, and not all of the employee's wages, would be covered 100% by the French State. That means there would be a zero remaining charge to the employer for almost all of its employees, in order to avoid redundancies.
    • We will have more details on the terms and conditions when the decree will be published: http://centre-val-de-loire.direccte.gouv.fr/sites/centre-val-de-loire.direccte.gouv.fr/IMG/pdf/qr_nouveau_dispositif_activite_partielle.pdf.
  • Ongoing reform on unemployment insurance.

Practical details:

Sources :
https://travail-emploi.gouv.fr/actualites/presse/communiques-de-presse/article/le-ministere-du-travail-donne-30-jours-aux-entreprises-pour-declarer-leur

1.3. Measures relating to automatic sick leave for employees who are parents

Automatic "sick" leave for employees who are parents of children under 16 years old and who are unable to telework. This sick leave is covered without a waiting day or review of the conditions for entitlement. The leave may be granted for a period of one (1) to fourteen (14) days and may be renewed as necessary. This measure also concerns parents of children under 18 years old in a situation of disability.

Practical details:

Sources :
https://www.ameli.fr/assure/actualites/covid-19-des-arrets-de-travail-simplifies-pour-les-salaries-contraints-de-garder-leurs-enfants

2. Measures taken by the French Government relating to social contributions and taxes

2.1. Measures relating to social security payment deadlines (URSSAF)

  • Postponement of all or part of the contributions occurring on 15 March 2020, for up to three (3) months, without any penalty being applied

Practical details:

  • Case 1: If you have already deposited your déclaration sociale nominative (DSN) for February 2020, there are two alternatives to change your payment:
  • Case 2: If you pay your contributions without DSN, you can adjust the amount of your bank transfer or not make a transfer at all.
  • Alternatively, it is also possible to reschedule the payment of contributions.

Practical details:

  • Log-in to your client area on: urssaf.fr
  • Report your situation « Nouveau message » / « Une formalité déclarative » / « Déclarer une situation exceptionnelle »
  • By phone: 3957
  • Postponement or agreement of a deadline is also possible for supplementary pension contributions. To do this, URSSAF advises that you should contact your supplementary pension institution.
  • For Independent professionals:
    • The monthly due date of 20 March will not be deducted. The amount of this due date will be smoothed on subsequent due dates (April to December);
    • Possibility to request payment terms, including by advance payment. There will be no late payment surcharge or penalty;
    • Possible adjustment of their contribution schedule to take into account a drop in their income, by re-estimating their income without waiting for the annual declaration;
    • Intervention of the social action for the partial or total payment of their contributions or for the allocation of exceptional financial support.

Practical details:

  • For craftsman and tradesman:

  • For liberal profession:

    • Log-in to your client area on: urssaf.fr and send a message on « Une formalité déclarative » > « Déclarer une situation exceptionnelle »
      • By phone: 3957 or 08.06.80.42.09 for medical practitioners and paramedics.

To be noted:
Further details will be provided by URSSAF subsequently for the April contributions.

Sources:
https://www.urssaf.fr/portail/home/actualites/toute-lactualite-employeur/mesures-exceptionnelles-pour-les.html
https://www.acoss.fr/home/journalistes/communiques-de-presse/ListeCommuniquesPresse/les-reseaux-des-urssaf-et-des-se.html

2.2. Measures relating to deadlines for payment term of tax due dates
  • Possibility to request a postponement of the payment of the next instalments to the SIE (with regard to corporate income tax, CFE, CVAE, property tax, taxes on salaries) without penalties.
  • If the postponement is not sufficient, tax rebates may be decided on a case-by-case basis (individual examination).
  • To date, no measures concerning a possible postponement of payment for the VAT, however, the deadline for declaring VAT will be extended under simplified arrangements - the conditions of which will be announced shortly.
  • No deadlines or postponements have yet been announced by the Government regarding income tax.

Practical details:

Practical details:

  • Log-in to your client area on https://cfspart.impots.gouv.fr/LoginAccess?op=c&url=aHR0cHM6Ly9jZnNwYXJ0LmltcG90cy5nb3V2LmZyLw , section « Gérer mon prélèvement à la source »: any intervention before the 22nd of the month will be taken into account for the following month.
  • For monthly contracts for payment of the CFE or property tax, it is possible to suspend it in their professional space on impot.gouv.fr or by contacting the Service Deduction Center: the remaining amount will be deducted from the balance, without penalty.

Sources:
https://www.impots.gouv.fr/portail/actualite/coronavirus-covid-19-mesures-exceptionnelles-de-delais-ou-de-remise-pour-accompagner-les
https://www.acoss.fr/home/journalistes/communiques-de-presse/ListeCommuniquesPresse/les-reseaux-des-urssaf-et-des-se.html

3. Measures taken by the French Government relating to bank measures

  • Implementation of fast-track procedure for credit appraisal procedures for tight cash flow situations within five (5) days, with special attention to emergency situations;
  • Postponement to six (6) months of credit repayments for companies;
  • Removal of penalties and additional costs of postponement and credit extensions for companies;
  • Relaying government measures: in the context of exchanges with clients, communication and explanation of public support measures (deferral of social or fiscal deadlines, public guarantee mechanism such as Bpifrance, etc.);
  • Support from the State and the Banque de France (credit mediation) to negotiate with your bank a rescheduling of bank loans;
  • Soliciting the maintenance or obtaining of cash lines with the support of the Banque de France, which will act as guarantor for any cash loans that companies may need.

To be noted: these measures will be granted by the bank after an individual examination of the situation.

Sources:
http://fbf.fr/fr/files/BMQP34/CP%20FBF%2015%20mars%202020%20-%20Coronavirus%20mobilisation%20totale%20des%20banques%20françaises.pdf

https://les-aides.fr/zoom/aZdm/coronavirus-des-mesures-d-accompagnement-pour-les-entreprises-impactees.html

4. Measures taken by Bpifrance

To be noted: At this date, companies in difficulty are excluded from these measures. The measures taken by Bpifrance are for VSEs, SMEs and mid-cap companies.

  • Suspension of the payment of loan due date (principal and interest) granted by Bpifrance, since 16 March 2020, for a period of six (6) months with no charge.
  • Opening of eligibility to SMEs or mid-cap company, more than 25% owned by venture capital companies.
  • Guarantee 90% of the bank lines of credit that companies may need:
    • For loans of three (3) to seven (7) years granted by private banks, and the waiting period is reduced to six (6) months;
    • Overdrafts confirmed for a period of twelve (12) to eighteen (18) months by the company's bank, and the waiting period is reduced to four (4) months;
    • Bpifrance guarantee now accessible to mid-cap companies.
  • Direct support to corporate treasury by:
    • Unguaranteed loans of three (3) to five (5) years from €10.000 to €10 million for SMEs and several tens of millions of euros for mid-cap companies, with a significant postponement of capital repayment;
    • Mobilization of all invoices accompanied by a cash credit of 30% of the volumes mobilized.

For further details:

http://cpmereunion.re/medias/static/files/RT%20CORONAVIRUS%20%20EXTERNE%20%2015%20mars.pdf
https://www.occitane.banquepopulaire.fr/portailinternet/Editorial/Informations/Documents/Garantie-Ligne-Cr%C3%A9dit-Confirm%C3%A9-COVID19.pdf

Practical details:

Sources :
Attachment n°2 of this email
https://www.bpifrance.fr/A-la-une/Actualites/Coronavirus-6-mesures-pour-les-entreprises-annoncees-par-Bpifrance-49117
https://presse.bpifrance.fr/coronavirus-bpifrance-amplifie-son-soutien-aux-entreprises-affectees-par-les-consequences-economiques-de-lepidemie-et-active-de-nouvelles-mesures-durgencesnbsp/

5. Measures taken by the French Government relating to the implementation of a Solidarity Fund

  • A Solidarity Fund will be implemented, intended for companies whose activities are closing down for sanitary reasons (or a drop-in turnover of -70%). This Fund will be exclusively dedicated to businesses with a turnover of less than €1 million (including microentreprises).
  • A lump sum of €1.500 will be released immediately and the remainder will be considered on a case-by-case basis. The estimated cost of this Fund, which should benefit 400.000 companies, is €1 billion.

Sources:

Announcement of the French Minister of Economy and Finance on 16 March 2020 and https://www.economie.gouv.fr/files/files/PDF/2020/Coronavirus-MINEFI-10032020.pdf

6. Measures taken by the French Government relating to procurement contracts (marchés publics) and private law contracts

6.1. Concerning procurement contracts (marchés publics)

  • The State and local authorities recognize COVID-19 as a case of force majeure, for their public contracts. Consequently, for all State and local authority public contracts, the delay in the provision of the service will not lead to the application of penalties for delays.

6.2. Concerning private law contracts

  • For private law contracts, recognition of the case of force majeure is under consideration by the Government. However, the Minister of Finance and Economy asks the principals not to request the reimbursement of the deposit for event orders cancelled because of the virus.

Consideration:

6.3. Other points

Sources:
https://www.netpme.fr/actualite/coronavirus-tpe-pme-bercy-muscle-sa-reponse-economique/?amp
https://www.economie.gouv.fr/coronavirus-soutien-entreprises#
https://www.tresor.economie.gouv.fr/Institutionnel/Niveau2/Pages/7485f4f4-c65c-4666-9d3f-3de82bafbe70/files/b96828e6-9ebe-4c05-8b65-c5758dd3ce79

7. Measures taken by the French Government relating to payment of rents

  • Lessors are called upon to grant facilities or even temporary freezes on the payment of rent for VSEs and SMEs. The Ministry of Economy and Finance has specified that lessors of shopping centres should announce the possibility of postponing the payment of rent.

Sources:

Minutes of the conference call of 16 March 2020 between the Minister of Economy and Finance, the Minister for Action and Public Accounts, the Minister for Labour and the State Secretary to the Minister for Europe and Foreign Affairs: https://xrm.eudonet.com/XRM/at?tok=7B444368&cs=SEZCpsM48ji3x1KSJdYwgVMnbOhUwAd8gb7I61lA_pO_T3E8xYVoqPbFtpuj7N1m&p=26qteH2RHB4P8QJjSyClcIuL_jJYfoWBaCCLkMFP3fIM9FfjBZHIkweX33e4-oMSdEDEvDI1lqs%3d

8. Measures taken by the French Government relating to companies in difficulty

To be noted: Currently, all courts are closed. All proceedings related to enforcement, safeguard proceedings (procédure de sauvegarde), receivership proceeding (redressement judiciaire) and judicial liquidation (liquidation judiciaire) are deprioritised, except in exceptional cases. However, the courts have set up digital exchanges in order to allow the opening of confidential preventive proceeding, such as the appointment of a mandataire ad hoc or the opening of a conciliation proceeding.

8.1. Measures for safeguard or recovery plans currently being implemented

  • Judicial receivers and creditors’ representatives wish to enter into consultation with the Commercial Courts in order to minimise the impact on companies and adapt the current repayment schedules.

Sources:

Reflections of judicial receivers in the framework of the think tanks of the Association pour le Retournement des Entreprises (AER)

8.2. Measures taken by the Association pour la Gestion du régime d’assurance des créances des Salaires – AGS (Redundancy Fund)

  • Creditors’ representatives are exempt from having to obtain the insolvency judge’s signature before sending a request for advance payments – a subsequent regularisation will be done;
  • Exceptionally, the salary debt statements are exempt from the signature by the employee representative;
  • Granting of payment terms:
    • For companies submitting a draft recovery or safeguard plan: extension from twenty-four (24) to thirty (30) months of the deadlines for reimbursement of the AGS's claims outside of the plan;
    • For companies already benefiting from a payment schedule, a decision is currently being voted on to suspend the monthly due dates from March to the end of June 2020 and to postpone them to the end of the schedule.
  • Regarding severance indemnities, a decision is currently being voted on to allow the provisional implementation of the guarantee, regardless of whether the applicable legal deadlines have been exceeded, provided that the AGS’ claims retain their priority ranking;
  • Regarding the cap on salaries due after the opening of insolvency proceedings:
    • The principle: the AGS guarantee, applicable to salaries owed during the observation period in the event of a conversion to judicial liquidation and during the 15 or 21 days following the opening of the judicial liquidation or the end of the temporary maintenance of activity), is limited in amount and duration to 45 days.
    • Currently: a deliberation is underway within the AGS to authorize, exceptionally and during this period of crisis, an extensive interpretation of the applicable legal provisions so as not to block payments related to the ongoing insolvency proceedings. To this end, two hypotheses are conceivable:
      (i) Either the notification of redundancy is given notwithstanding a subsequent risk of the employee contesting the legality of the redundancy before the Labour Court (Conseil des Prud’hommes); or
      (ii) Creditors representative decides to postpone the redundancy procedure in order to strictly comply with the legal provisions, with a risk of exceeding the 45-day deadline.

Sources:
Reports of the judicial receivers following the questioning of the AGS and https://www.ags-garantie-salaires.org/files/ags-theme/ags/2020/cp/CP%20120320%20-%20COVID-19%20-%20le%20Régime%20de%20Garantie%20des%20Salaires%20AGS%20mobilisé.pdf

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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