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Subsidies for youth employment in the French ‘recovery plan’: what you need to know

Written by
Capstan Avocats, the law firm setting the benchmark for labour law in France.
As part of the economic recovery plan, a new aid has come into force to encourage employers to hire young people on permanent or fixed-term contracts or on work-study contracts. How can employers benefit from it? How much is the aid? This article explains.

Youth employment aid

How much is the aid?

The amount of aid is a maximum of EUR 4000 over one year for a young full-time employee. This amount is prorated according to the percentage of time worked by the employee and the actual duration of the employment contract.

For which companies?

The aid is available to all companies, whatever their sector of activity or size.

What are the conditions?

To benefit from this aid, employers must meet the following cumulative conditions:

  • Recruit a young person under the age of 26 between 1 August 2020 and 31 May 2021 (contract renewals starting before this period are not eligible).
  • Conclude a permanent contract, a temporary contract or a fixed-term contract with the young person for a period of at least three months.
  • Not have made an economic redundancy in the same position since 1 January 2020.
  • The employee’s pay must be less than or equal to 1.6 minimum wage (SMIC).
How can employers benefit from this aid?

Within 4 months of hiring an eligible employee, you must send your application to the Agence de services et de paiement (ASP).

The aid will be paid by the ASP, on a quarterly basis, for a maximum period of one year.

Can this aid be combined with other State aid?

No. It is not possible to combine this new aid with any other State aid linked to integration, access or return to employment for the employee concerned.

If you place your employee in partial activity or long-term partial activity, you will not be able to receive the aid for the periods concerned either.

Apprenticeship contract aid

Financial assistance is also available for employers who hire young people on apprenticeship contracts. This aid is paid for the first year of the contract and cannot be combined with the aid for hiring a young person, above.

How much is the aid?

The amount of aid varies according to the age of the apprentice:

  • EUR 5,000 for an apprentice under the age of 18
  • EUR 8,000 for an apprentice over 18.
For which companies?

All companies with fewer than 250 employees can benefit from this aid, without conditions.

Companies with 250 employees or more can benefit from the aid subject to conditions relating to the percentage of professional integration and work-study contracts in their organisation (see here for full details, in French).

What are the conditions?

The aid applies to apprenticeship contracts concluded between 1 July 2020 and 31 December 2021 for the preparation of a vocational diploma or qualification.

How can employers benefit from this aid?

The aid is paid monthly, starting from the first month and as soon as the Nominative Social Declaration (DSN) has been received and checked by the Agence de services et de paiement (ASP).

How does this new aid for apprenticeship fit in with the previous one-off aid for hiring apprentices?

The new aid for employers of apprentices replaces the one-off aid for the first year of the apprenticeship contract.

After the first year of the contract, eligible companies will be able to benefit from the one-off grant again until the end of the contract.

Exceptional assistance for employers hiring an employee on a ‘professionalisation’ contract’

This aid supports companies that hire an employee under 30 years old on a ‘professionalisation’ contract (that is, a contract on which the employee combines working and studying for a professional qualification) between 1 July 2020 and 31 December 2021 studying for a diploma up to Master’s level. It is paid for the first 12 months of the contract.

The amount of this aid and its payment terms are the same as those of the exceptional aid for hiring under an apprenticeship contract.

The ‘experimental’ professionalisation contracts provided for in VI of Article 28 of the law of 5 September 2018 are also eligible for aid (for details see here, in French).