As the cost of work stoppages continues to rise, the authorities are examining ways to reduce Social Security costs. Among the options considered, a modification of the ceiling of compensation paid to employees on sick leave.
Faced with the continued increase in Social Security expenditure, the government plans to reduce compensation for sick leave. This measure is part of a broader plan to reduce the deficit, by transferring part of the costs to employers and insurers.
A revision of the ceiling to alleviate public finances
Currently, people on sick leave receive 50% of their daily salary from the fourth day of sick leave, with a ceiling set at 1.8 times the minimum wage (i.e. approximately 3,180 euros per month).
The government wants to lower this ceiling to 1.4 SMIC, thus reducing the maximum amount paid by Health Insurance. This revision would save around 600 million euros per year, according to estimates relayed by Les Echos.
Although this measure does not completely eliminate the Social Security deficit, it would reduce public finances. However, the financial burden would be transferred to employers and insurers, in particular via welfare contracts which often supplement Social Security benefits for the highest paid employees.
Impact on employers and employees
The lowering of the compensation ceiling could have significant consequences for companies, which will have to compensate for the reduction in daily allowances paid by Social Security.
According to Health Insurance, work stoppages cost 14 billion euros in 2022, an increase of 5% compared to the previous year. This additional cost could be borne by companies through the increase in insurance premiums and welfare contracts.
Employees with low incomes or those who do not benefit from supplementary insurance contracts would be less directly affected by this measure. On the other hand, those whose employers do not cover the entire loss of income could see their purchasing power impacted. Small businesses, often less well equipped to assume these costs, could also be more affected.
Extension of the waiting period, an avenue studied
In parallel with the reduction in compensation, the government is exploring extending the waiting period, currently three days, to seven days. This period during which no compensation is paid would make it possible to achieve approximately 950 million euros in additional savings.
However, this proposal is more controversial. The extension of the waiting period could further penalize the most vulnerable employees, particularly those without additional salary during this period.
Mixed reactions
The reform proposals provoke contrasting reactions. On the union side, the concern is mainly about the repercussions for the most precarious employees, while employers’ organizations insist on the need to better regulate short-term sick leave. Medef particularly supports reinforced control of short stoppages, which represent nearly 60% of stoppages declared each year, to avoid abuse.
Although the planned reforms could help reduce the Social Security deficit, they risk shifting the burden to businesses and widening inequalities between workers, while raising questions about the organization of work and the health of employees.
