Companies employing low-wage workers in France may be eligible for a subsidy of €4000 for each new hire.
Labour costs are perceived as high in France, and employers have been finding it increasingly difficult to compete with low-wage countries. In order to help French employers hire low-wage workers, a new law published on 25 January 2016 is intended to provide employers with a €4000 subsidy for each new hire earning up to 1.3 times the minimum wage.
The law published by the French Government applies the following grant conditions.
Any company employing less than 250 staff can apply for this subsidy.
The subsidy is paid to the employer for each new employee whose employment begins between 18 January 2016 and December 31 2016.The subsidy applies if the new hire's starting salary is up to 1.3 times the minimum wage, known as SMIC. The gross SMIC in 2016 is €9.67 per hour, which equates to €1466.65 gross per month for a full-time employee working 35 hours per week. The maximum eligible wage is therefore 1466.65 x 1.3 = €1906.64 gross per month for full-time, 35 hours-based employees.
Part-time employees whose hourly wage is up to 1.3 x 9.67 = €12.57 per hour are also eligible, and the grant is prorated based on their working hours.Both permanent contracts and fixed-term contracts are eligible if they last for an initial period of at least six months.
- Important Note: Lock-in eligibility in case of salary increase
If an employee is hired at an eligible salary between 18 January 2016 and 31 December 2016 and subsequently receives a salary increase, the employer will continue to receive the subsidy.
The subsidy amount is €4000 for each eligible worker. It is split into quarterly payments of €500 spanning over a 24 month period.In case of part-time work, the grant is prorated: €2000 for a ½ time employee for example.
Where a contract ends before the 24 month period, the total subsidy is prorated. Unpaid leaves will also reduce the grant proportionately.
How do I claim the subsidy?
An initial application form must be sent to the government agency "ASP" within six months of the hire, and a certificate of worked hours then needs to be sent on a quarterly basis.
- Do not confuse this new plan with the 1st employee subsidy plan
A company that has already benefited from the 1st employee subsidy plan (still available at the time of writing) when hiring their first worker can now also claim this new subsidy for eligible employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.