Paid Leave and Sick Leave: What the Reform Means for Your Company in France
Law No. 2024-364 of 22 April 2024 put an end to an anomaly in French law by aligning it with European case law. From now on, an employee on sick leave continues to accrue paid leave, even where the sick leave is not work-related. For employers, this reform entails concrete changes in managing leave balances, informing employees and handling retroactivity.
What the Law Says: The New Accrual Principle
Before this law, only work-related absences (workplace accident, occupational illness) gave rise to paid leave accrual, capped at one year. Ordinary sick leave gave rise to no rights at all. This distinction was found to be contrary to European Directive 2003/88/EC by the Court of Justice of the European Union, and subsequently by the French Cour de cassation (Supreme Court) in its rulings of 13 September 2023.
The law of 22 April 2024 introduces a dual accrual regime:
For non-work-related sick leave: the employee accrues 2 working days (jours ouvrables) of paid leave per month of absence, i.e. 24 working days per year (4 weeks). This is less than the usual 2.5 days (30 working days, i.e. 5 weeks) accrued during periods of actual work.
For work-related sick leave: the employee accrues 2.5 working days per month, with no time limit (the one-year cap is abolished). The employee therefore accrues the same rights as if working.
Retroactive Effect: How to Manage It?
The most sensitive aspect of this reform is its retroactive application. The law provides that employees may claim paid leave not accrued in respect of sick-leave periods going back as far as 1 December 2009. However, this right is subject to a two-year time bar (délai de forclusion, a strict limitation period) running from the entry into force of the law, i.e. until 23 April 2026.
In practical terms, your current and former employees have until 23 April 2026 to claim paid leave in respect of past sick leave. After that date, the right is time-barred.
Worked Example
An employee was on ordinary sick leave for 8 months in 2022. Under the old regime, they accrued no paid leave during that period. With retroactivity, they can claim 8 x 2 = 16 working days of paid leave. If still employed, these days are added to their leave balance. If they have left the company, they may request a compensatory indemnity (indemnité compensatrice).
The Obligation to Inform the Employee
The law imposes a reinforced information obligation on the employer. Within one month following the employee’s return after a sick leave, you must inform them by any means providing a certain date:
– Of the number of leave days available to them;
– Of the deadline by which these leave days may be taken;
– This period for taking leave is 15 months from the date of the information.
If you fail to provide this information, the leave carry-over period does not start to run. The employee then retains the benefit of these days indefinitely, which can create a problematic accumulation. Set up a standard letter or an automatic email upon return from sick leave.
Carry-Over of Leave: A New 15-Month Period
Where an employee has been unable to take their paid leave because of sick leave, that leave is carried over. The law sets a carry-over period of 15 months from the date on which the employee is informed of their rights. This period replaces the former case-law rules, which could lead to unlimited carry-over.
If the sick leave lasts more than one year, the 15-month carry-over period begins to run at the end of the accrual period during which the leave was accumulated. For example, for leave accrued between 1 June 2025 and 31 May 2026, the carry-over expires on 31 August 2027 (15 months after 31 May 2026), provided the employee has been informed.
Financial Impact for the Employer: How to Make Provisions?
This reform has a real cost for employers, particularly because of retroactivity. Provisioning must take several parameters into account:
For current employees: identify all sick-leave periods since 1 December 2009 and calculate the leave days theoretically accrued. Multiply by the employee’s current daily rate. This is your maximum exposure.
For former employees: the risk relates to a compensatory indemnity for paid leave. It is harder to quantify because it depends on the number of former employees who will file a claim before 23 April 2026.
In practice, not all companies will be exposed in the same way. Sectors with high absenteeism rates (industry, healthcare, large retail) will be proportionally more affected than service sectors with few long absences.
5 Concrete Actions to Achieve Compliance
1. Update your payroll software to incorporate the new accrual rules (2 days/month for ordinary sick leave, 2.5 days/month for work-related accidents/illness with no time limit).
2. Create a standard information letter to send to the employee within one month following their return from sick leave. This letter must state the number of days accrued and the deadline for taking them.
3. Audit your leave balances to identify employees who have had sick leave since 2009 and calculate any retroactive entitlement.
4. Make provisions for the cost in your accounts, distinguishing the certain cost (current employees) from the potential cost (former employees).
5. Brief your managers on the new rules so they can plan return-from-sick-leave holidays without disrupting their teams.
The DAIRIA tip: The date of 23 April 2026 is a hard cut-off for retroactivity. Review your workforce now. DAIRIA helps you identify the employees concerned, calculate the days owed and generate information letters that comply with the law.