Authorities’ plan for ex-post verification of short-time working.

Having learned the lessons of the economic and financial crisis of 2008-2009, the government has made extensive use of the short-time working scheme to limit the impacts of the current economic crisis on employment and ensure that companies still have their employees when the recovery comes. 1.24 million short-time working requests have been submitted: 12.4 million employees, or 60% of French employees, are currently on short-time working. The cost to the state now stands at €25bn.

In view of this unprecedented financial investment, the government judged that the time had come to begin inspections by establishing a large-scale ex-post plan in two circulars dated 5 and 14 May 2020. This inspection plan is on a scale worthy of the investment.

1. Objectives of the inspection plan

The inspection has a primary and a secondary objective

The main objective is to combat fraud. The authorities have drawn up a list of the most common types of fraud:

• the declaration of a fictitious employee;
• employees on short-time working continue to work, particularly from home;
• employees on sick leave receive a short-time working allowance in addition to their benefits;
• companies placing employees on short-time working and subcontracting or using temporary workers to temporarily take on the workload normally assigned to the employees;
• employers declare more short-time working hours than actually exist;
• employers declare hourly rates higher than actual rates;
• the allowance paid to the employee by the employer is less than the legal amount.

The secondary objective is to adjust compensation claims: the establishment of the new short-time working scheme and the influx of companies that have never used it before led to errors in compensation claims, leading either to an increase or a reduction in the amounts paid to companies.

Different types of inspection

The plan includes three types of inspection:

• detection and cross-referencing of administrative data via checks embedded in information systems (APART, i.e. the short-time working IT application; SERAPIS; RTCC);
• documentary check, i.e. examining the file and the documents necessary for the investigations;
• on-site check, allowing in-depth inspection of a case.

These inspections will take place:

• primarily, on short-time working applications and compensation claims, i.e. after the event;
• secondarily, during processing of short-time working applications, i.e. before the event.

Targets of the inspection plan

Particular attention will be paid to:

• companies that have submitted compensation claims based on a high hourly rate;
• sectors which are heavy users of short-time working, such as construction and public works, administrative services, business support and advice;
• companies whose workforce is made up of a majority of managers more likely to be able to work from home.

Sanctions

Several actions may be taken at the end of the inspection in the event that any irregularities are identified:

• withdrawal of the administrative authorisation decision, pursuant to Article L.242-1 of the Code of Relations between the Public and the Authorities (CRPA), within four months when authorisation of the short-time working application is found to be unlawful;
• withdrawal of the administrative compensation decision, pursuant to Article L.242-2 of the CRPA when the conditions set out for granting short-time working have not been met;
• adjustment of compensation claims paid, either favourably or unfavourably for the company, either voluntarily on the part of the company if the right to error is invoked as provided for in Article L.123-1 of the CRPA, or by means of compulsory repayment proceedings initiated by the Direccte and implemented by the Service and Payment Agency (ASP – Agence de Services et de Paiement).

2. Organisation of the inspection plan

Coordination of the inspection plan

The inspection plan will be coordinated on two levels:

• a documentary check, involving agents responsible for short-time working;
• an additional check, when a file examined as part of the documentary check appears to be part of a complex fraud case requiring the involvement of investigative powers exceeding those of the agents from the short-time working agencies.

Agents likely to be involved

The inspection plan is likely to involve four main categories of agents:

• ASP agents;
• Direccte agents responsible for short-time working;
• Labour Inspectorate agents, who have jurisdiction to establish fraud or misrepresentation offences;
• other inspection bodies such as regional inspection units responsible for combating illegal work (URACTIs), URSSAF inspectors in the context of combating social security contribution fraud and, at national level, the national watch, support and inspection group (GNVAC).

Governance 

Governance of the inspection plan will be carried out:

• at national level, by an ad hoc steering committee under the responsibility of the general delegation for employment and vocational training (DGEFP);
• at regional level, by an ad hoc steering body also including Direccte and the ASP regional directorate;
• at departmental level, by an operational steering body including the various agencies involved.

Although this inspection plan is naturally legitimate, let us hope that its implementation does not compromise the very positive image of short-time working, which is currently the French economy's main lifeline.

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