What is the purpose of the wage guarantee plan?

The wage guarantee scheme (AGS) was created on the initiative of employers to show their solidarity and commitment. It intervenes in particular to ensure the payment of remunerations at the level of companies in the midst of collective proceedings such as safeguard, recovery or judicial liquidation. However, the role of the AGS also extends to employees. More information in this article.

Support for companies in distress

The main role of the AGS is to help companies in the midst of collective proceedings to pay the salaries of their employees. One should also not forget the different sums to be allocated in case of termination of an employee's activity. These include notice and various indemnities... in short, all the sums promised by the employment contract established by the company.

In order for companies to achieve payment of all amounts due to their employees, the AGS advances the necessary funds. In addition to this, it provides the necessary advice to help companies cope with this crisis situation. This association also monitors the situation of companies in the course of proceedings - some of them may, in fact, pass under a new leader. It should be noted that the French Labor Code imposes a ceiling on the amounts that the AGS can advance. This depends heavily on the contributions paid by the companies before the collective procedure. These contributions are mandatory for each member of the scheme.

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In order to benefit from thefinancial assistance companies are required to provide formal proof of insufficient funds to the AGS. They are also required to provide a statement of wage claim. Approximately 5 days after this date, the requested amount will be released for distribution to employees.

AGS support allows companies to protect their jobs and promote the economic viability of these companies. From a national perspective, this would have a positive impact on the local economy.

Payment insurance for employees

The AGS is the assurance for employees who are unemployed to receive the amount they are legally due. This guarantee creates a secure veil for employees, even when times are tough. It is the guarantee in case of conventional rupture

It must be specified that obtaining a contract of employment gives the right to the salary guarantee scheme. Those who are not covered include self-employed workers or those who are paid by results. There are also shareholders who hold less than 20 % of the company's shares.

The AGS therefore enables employees to receive the amounts they are due to receive before or during the insolvency proceedings. The amount is determined when the said procedure is officially initiated. In addition to their salariesIn addition, employees will also receive compensation for the termination of the employment contract, related solely to the cause mentioned above.

The AGS also allows employees to receive amounts related to seniority, profit-sharing and early retirement. In the same way, the indemnities related to work accidents and retirement are also guaranteed.

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Scope of application of the AGS

All private employers are subject to the AGS. For example :

  • The merchants
  • The craftsmen
  • Semi-private companies
  • Temporary employment agencies

The law guarantees the following claims:

  • All salaries of employees and apprentices
  • Compensation for breach of contract or dismissal

The application process for an advance

In case of receivership or liquidation, the company's creditors have to declare their claims. The employees will not have to do these formalities.

The appointed representative then verifies the employees' claims and submits the amounts due to the bankruptcy judge for validation.

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