Paid Leave and Sick Leave: New Rules from the Law of April 22, 2024

Law No. 2024-364 of April 22, 2024, concerning various adjustments to European Union law in matters of economy, finance, ecological transition, criminal law, social law, and agriculture (known as the “DDADUE” law), has profoundly modified the rules regarding the acquisition of paid leave during periods of sick leave. This long-awaited reform finally brings French law into compliance with European Directive 2003/88/EC and the case law of the Court of Justice of the European Union (CJEU). Below is an overview of the new provisions and their practical implications.

Context: Compliance with European Law

Article 7 of Directive 2003/88/EC of November 4, 2003, concerning certain aspects of the organization of working time, guarantees every worker a right to at least 4 weeks of paid annual leave. The CJEU has consistently ruled since the Schultz-Hoff judgment of January 20, 2009 (C-350/06) that this right cannot be conditional on actual work performance: a worker on sick leave continues to acquire vacation rights.

However, the former Article L3141-5 of the Labour Code allowed the assimilation of periods of absence due to non-occupational illness to effective working time only for a continuous duration of up to one year, and only for occupational illnesses and work-related accidents. For non-occupational illness, no such assimilation was provided: an employee on ordinary sick leave simply did not acquire any paid leave.

By two landmark decisions on September 13, 2023 (No. 22-17.340 and No. 22-17.638), the Court of Cassation made a historic turnaround by rejecting the provisions of the Labour Code that were contrary to European law, acknowledging that employees on sick leave must acquire vacation rights. The law of April 22, 2024, has legally recognized this solution.

Acquisition of Paid Leave During Non-Occupational Sick Leave

The new article L3141-5-1 of the Labour Code, introduced by the law of April 22, 2024, now states that periods of absence due to non-occupational illness or accidents are to be treated as periods of effective work for the purpose of determining the duration of leave. However, this assimilation is capped at 2 working days of leave per month of absence, which amounts to 24 working days (4 weeks) per year.

This cap of 2 days per month (as opposed to 2.5 days under general law) corresponds to the minimum guaranteed by the European directive, namely 4 weeks of leave per year. The legislator has chosen not to fully align the rights of employees on non-occupational sick leave with those of active employees, who acquire 2.5 working days per month.

In summary: An employee absent for the entire year due to non-occupational illness acquires 24 working days of leave (4 weeks), compared to 30 working days (5 weeks) for an employee who worked all year. The 5th week of leave is not accrued during ordinary sick leave.

Preservation of Full Rights for Work-Related Accidents/Occupational Diseases

For absences resulting from a work-related accident or occupational disease, the law of April 22, 2024, amended Article L3141-5 of the Labour Code to eliminate the previous one-year limit. From now on, periods of absence for work-related accidents or occupational diseases are assimilated to effective working time without a duration limit, and the employee acquires all of their leave rights, which is 2.5 working days per month (30 days per year, corresponding to the 5 legal weeks).

This evolution is significant: under the former regime, an employee on sick leave due to a work-related accident for more than one year would cease to acquire paid leave. This is no longer the case.

Mechanism for Carrying Over Unused Leave

The law of April 22, 2024, introduced a new Article L3141-19-1 of the Labour Code, establishing a right to carry over paid leave accrued but not taken due to sick leave. This mechanism works as follows:

When the employee cannot take their leave due to their sick leave, the accrued leave is carried over. The employer must inform the employee within one month of their return to work by any means that provides proof of the date:

• The number of days of leave they have available
• The date by which these days must be taken

The employee then has a period of 15 months from this notification to take their carried-over leave. After this period, any unused leave is definitively lost, provided the employer has fulfilled their obligation to inform. If the employer fails to inform the employee, the 15-month period does not start, and the leave remains indefinitely carry-over.

In the event of continued sick leave beyond the acquisition period, the accrued leave is automatically carried over. The carry-over period of 15 months begins at the end of the acquisition period in which the leave was accrued. If the sick leave extends beyond this 15-month period, the unused leave is lost.

Essential Employer Obligation: The employer’s information to the employee about their leave rights and carry-over timelines is crucial. In the absence of this information, the employee retains their rights to the carried-over leave indefinitely. Therefore, it is in the employer’s best interest to formalize this notification in writing (registered letter, hand delivery against receipt, email with acknowledgment of receipt).

Retroactivity of the Law: Rights Acquired Since December 2009

One of the most remarkable aspects of the law of April 22, 2024, is its partially retroactive nature. Article 37 of the law states that the new provisions concerning the acquisition of leave during non-occupational sick leave apply retroactively to sick leave periods after December 1, 2009.

This date corresponds to the entry into force of the Lisbon Treaty, which endowed the Charter of Fundamental Rights of the European Union (of which Article 31 enshrines the right to paid annual leave) with legally binding force.

In practice, employees who have been deprived of paid leave during non-occupational sick leave between December 1, 2009, and the entry into force of the law can claim the unpaid leave. However, this right is subject to several limitations:

• A 2-year limitation period: any claim must be made within 2 years from the law’s entry into force (until April 24, 2026)
• The cap of 2 days per month: the claim is limited to 2 working days of leave for each month of non-occupational sick leave
• The 15-month carry-over period: retroactively acquired leave not taken within 15 months following the end of the acquisition period is lost

Practical Obligations of the Employer

The law of April 22, 2024, imposes several concrete obligations on employers:

• Update payroll software: leave counters must now incorporate acquisition during non-occupational sick leaves (2 days/month) and work-related accidents/occupational diseases without a duration limit
• Inform returning employees: within one month of return, inform the employee of the number of available leave days and the deadline for using them
• Manage retroactive claims: handle employees’ claims for the period prior to the law by verifying sick leave periods and calculating theoretically accrued rights
• Financial provisioning: create provisions for leave acquired during sick leave and for potential retroactive claims

Summary Table of Leave Rights

To clarify the new rules, here is a summary of leave rights based on the employee’s situation:

• Active Employee: 2.5 working days per month, totaling 30 days (5 weeks) per year
• Employee on Non-Occupational Sick Leave: 2 working days per month, totaling 24 days (4 weeks) per year
• Employee on Work-Related Accident/Occupational Disease: 2.5 working days per month, without duration limit, totaling 30 days (5 weeks) per year
• Employee on Maternity/Paternity Leave: 2.5 working days per month (full assimilation, unchanged)

Outstanding Questions and Necessary Vigilance

Despite the clarification provided by the law of April 22, 2024, several questions remain under discussion:

• The compliance of the 2-day cap: some commentators question the compatibility of the cap of 2 working days per month for non-occupational illness with the principle of equal treatment
• The interaction with collective agreements: certain agreements provide for more favorable provisions regarding paid leave during illness, which continue to apply
• The calculation of paid leave indemnity: the method (salary maintenance or one-tenth) may raise difficulties for periods of sick leave

The law of April 22, 2024, constitutes a major evolution in the law of paid leave. Employers must adapt their practices and management tools. Given the complexity of the new rules and the risk of retroactive claims, it is strongly recommended to seek the assistance of a specialized employment law attorney.