Sick leave: subrogation, salary maintenance and SSA benefits — who pays what?

Quick answer. An employee with at least one year's seniority receives an employer top-up equal to 90 % of gross pay for 30 days, then two-thirds, after a 7-day employer waiting period (Code du travail articles L1226-1 and D1226-1). Social Security simultaneously pays daily indemnities (IJSS in French) at 50 % of daily reference earnings, capped at €41.95/day in June 2026. With « subrogation », the employer receives the Social Security indemnities directly and pays the employee the full maintenance.

In France, sick leave is never the employee's burden alone. Two systems operate in parallel:

1. Salary maintenance by the employer: a legal obligation (Code du travail articles L1226-1 et seq.), often topped up by more generous collective bargaining terms.
2. Social Security daily indemnities (IJSS): paid by the health insurance scheme after a 3-day waiting period, calculated at 50 % of daily reference earnings.

Subrogation is a fiscal and social mechanism whereby the employer receives Social Security payments directly instead of the employee, provided the employer maintains a salary at least equal to those indemnities. This framework must be understood clearly to avoid payroll errors.

Under articles L1226-1 and D1226-1 of the Code du travail, the employer must pay a complementary indemnity equal to 90 % of gross pay for the first 30 days of justified absence, then two-thirds (66.66 %) for the next 30 days. A collective agreement may raise this rate to 100 %, but that is a contractual benefit on top of the statutory minimum.

Qualifying conditions for employer maintenance#

1. Minimum one year's seniority in the company
2. Medical justification within 48 hours (medical certificate submitted to both employer and primary health insurance fund)
3. Absence covered by Social Security (medical treatment in France, EU member state or Switzerland)
4. No work during the period (absence of work is essential; any work voids the protection)

Seniority-based extension#

Each of the two periods (90 % then 66.66 %) extends by 10 days per full 5-year band of seniority beyond the required year, with neither period exceeding 90 days (article D1226-1).

Field case (anonymised): A 25-person consultancy maintained salary for 35 days instead of 30 for an employee with 6 years' seniority, mistakenly applying their collective-agreement duration instead of the statutory scale. When Social Security indemnities arrived, they discovered the 5-day overpayment. The employee refused reimbursement, claiming tacit consent. Lesson: document the exact statutory scale (D1226-1) in the employee's file, and separate what the law requires from what the collective agreement adds.

A commonly misunderstood point: the employer's salary maintenance obligation does not begin until day 8 of absence, because of a 7-day statutory waiting period (confirmed in article D1226-1 of the Code du travail).

Timeline for the first 15 days of sick leave:

1. Days 1–3: Social Security waiting period (no benefits). Employer may provide partial pay under collective agreement, but no legal obligation.
2. Days 4–7: employer maintenance waiting period. Social Security accumulates entitlements but pays retroactively from day 4 onwards. No mandatory employer payment yet.
3. Day 8 onwards: statutory employer maintenance begins (or earlier if collective agreement is more generous). Social Security indemnities are retroactively credited from day 4 onwards.

Important: Social Security indemnities are always paid in arrears (retroactively), often 2–3 weeks after DSN payroll declaration. The employer must finance the shortfall during this lag.

The health insurance fund pays daily indemnities at 50 % of daily reference earnings (GJB in French).

The daily reference earnings are obtained by adding the last 3 gross monthly salaries before the leave and dividing the total by 91.25. The daily indemnity equals 50 % of that figure.

Example. For an employee whose last 3 gross salaries are €2,400 each, the total is €7,200. The reference earnings come to €7,200 / 91.25 = €78.90, so the daily indemnity is €78.90 × 50 % = €39.45.

IJSS cap in 2026#

Since 1 April 2025, the reference salary used to calculate sick-leave indemnities is capped at 1.4 × the minimum wage (SMIC) (down from 1.8 × SMIC). In practice, the monthly gross salary taken into account cannot exceed €2,522.52 for leave prescribed in June 2026 (SMIC in force on 1 May 2026) or €2,613.83 for leave prescribed from 1 July 2026 (SMIC uprated on 1 June 2026).

This produces a maximum daily indemnity of €41.95 for leave prescribed in June 2026, rising to €42.97 for leave prescribed from 1 July 2026 (source: ameli.fr). Any employee whose reference earnings would yield a higher indemnity is brought back to this ceiling.

Subrogation is a mechanism where the employer receives Social Security indemnities directly, instead of the employee.

Subrogation conditions#

1. The employer must maintain a salary at least equal to the Social Security indemnity amount (otherwise subrogation has no benefit to Social Security).
2. The DSN payroll declaration must signal the subrogation choice to the URSSAF (explicit declaration of subrogation on the relevant payroll).
3. The employer must justify to Social Security that salary maintenance is actually occurring (payslips, proof of payment).

Employer benefit#

The statutory maintenance equals 90 % of gross pay: the Social Security indemnities form part of it, and the employer only pays the top-up (90 % of gross − indemnities). For a €2,400 gross salary and a €39.45 daily indemnity, the employer's top-up is the amount needed to reach 90 % of the usual salary.

Subrogation does not change the employer's net cost of the absence; it only changes the cash-flow route. With subrogation, the employer pays the employee the full maintenance (90 % of gross) and receives the Social Security indemnities directly; without it, the employee collects the indemnities and the employer pays only the top-up. The final cost to the company is identical either way — subrogation simply spares the employee the wait for Social Security payments.

Scenario: employee on an open-ended contract with 4 years' seniority, gross monthly salary of €2,400, non-occupational sick leave from 3 to 20 June 2026 (18 calendar days).

Key figures:

• GJB = (€2,400 + €2,400 + €2,400) / 91.25 = €78.90 → daily indemnity = €78.90 × 50 % = €39.45 (below the €41.95 ceiling, so uncapped).
• Social Security waiting period: 3 days (no indemnity for days 1 to 3).
• Statutory employer waiting period: 7 days (statutory maintenance begins only on day 8, unless a more favourable collective agreement applies).
• Applicable statutory maintenance: 90 % of gross (the employee has fewer than 6 years' seniority).

The three phases:

On this leave, Social Security pays indemnities from day 4 (€39.45/day) and the employer only owes a statutory top-up from day 8. A collective agreement may, however, remove the employer waiting period and raise maintenance to 100 % — this statutory-versus-contractual comparison must be checked before drafting the payslip.

Note: whenever a collective agreement provides more favourable maintenance (reduced waiting period, 100 % rate, longer duration), it prevails. Subrogation itself remains a simple cash-flow option declared in the DSN.

1. Confusing Social Security and employer waiting periods#

Many payrolls forget days 4–7 of employer maintenance. If the employee falls ill on Monday, the employer need not pay until the following Monday (day 8), even though Social Security indemnities start accruing on day 4. This gap must be documented in DSN and payroll.

2. Applying a collective agreement without checking the law#

A collective agreement may provide better maintenance (e.g. 100 % for 60 days outright). But if silent, law L1226-1 applies in full: no shortcuts.

3. Forgetting to increase maintenance with seniority#

A 10-year employee is entitled to 50 days at 90 % and 50 days at two-thirds, not 30 and 30. This is a classic trap: the payroll software may fail to auto-recalculate.

4. Failing to declare subrogation in the DSN#

An employer wishing to recover Social Security indemnities must declare this explicitly on payroll. Otherwise, indemnities are paid to the employee, and the employer cannot claim them retroactively.

5. Including sick leave in paid-leave accrual#

A day of sick leave does not count as a working day, so it does not add to annual leave entitlement (except under more generous collective terms). But it must not be deducted from remaining leave either.

Recently, a mid-sized consulting firm sought our help after a multi-year URSSAF enforcement notice. The problem: the employer maintained salaries during sick leave but did not declare received Social Security indemnities as subrogated (employer-received) payments. URSSAF treated the situation as if the employer was double-financing (both salary maintenance and IJSS), inflating the contribution base. Once subrogation was correctly declared and supported by payslips, the enforcement notice evaporated: IJSS indemnities are a receivable for the employer against Social Security, not an additional payroll cost.

This is why subrogation is not just administrative convenience; it is a real cost-reduction tool for absence management. It must be:

1. Declared proactively and in writing on DSN payroll
2. Supported by proof of salary maintenance (payslips)
3. Tracked in accounts (Social Security reimburses after 3–4 weeks)

Hayot Expertise advice. The moment an employee submits a medical certificate, immediately verify seniority and estimate the Social Security indemnity. Document the subrogation decision (or decision not to subrogate) in payroll and communicate it to your payroll software before month-end. A poorly managed sick leave in June will still weigh on your accounts three months later — get it right from day one.