Unemployment: the allowance of cross-border workers should be reduced

The measure was feared by the more than 445,000 French people who work in one of the countries bordering France, including nearly 231,500 in Switzerland. She is about to be adopted permanently. Cross-border workers who work in Switzerland, Luxembourg, Germany and Belgium should see the amount of their unemployment compensation reduced from next year.

The social partners held their last round of negotiations on unemployment insurance in Paris on Thursday. Discussions began several days ago. The Barnier government has entrusted them with the task of finding 400 million euros in additional savings per year from 2025 (compared to the agreement concluded in November 2023).

These negotiations take place in a particular context. France’s finances are in a critical situation: the public deficit is widening and the debt is increasing. The State must drastically reduce its spending.

Reduction coefficient

Among the avenues mentioned, the social partners agreed on the implementation of a new model for calculating unemployment benefit for cross-border workers. This plans to apply a reducing coefficient to take into account the difference in standard of living between the country of employment of the unemployed cross-border worker and France.

The idea had already been proposed by some economists (read below). The goal is to reduce the amount of their unemployment compensation to relieve theUnédic.

Relieve Unédic

Cross-border workers weigh heavily in the coffers of the association responsible for managing unemployment insurance in France. This is the consequence of European regulations: when they work, cross-border workers pay contributions in their country of employment, but in the event of unemployment, it is their country of residence which compensates them.

A financial compensation system exists between States: this provides that the former country of employment pays between three and five months of unemployment benefits to the country of residence, but the amounts received by the second may be insufficient. This is the case for France.

And for good reason: the number of unemployed cross-border workers in France is increasing, their duration of compensation is longer than that of other beneficiaries, and the amount of their benefits is also higher, because it is calculated on the basis of their last salaries received abroad, generally higher than in France, in Switzerland for example.

A “crazy money”

Thus, these workers are very expensive for Unédic. In a recent report, the organization calculates that in 2023, it paid 1 billion euros in compensation to the 77,000 unemployed cross-border workers previously working in the four main neighboring employment countries of Switzerland, Germany, Luxembourg and Belgium. But in the opposite direction, he only received 200 million euros in reimbursement from them.

Result: the additional cost for Unédic reaches 803 million euros in 2023. Cumulatively between 2011 and 2023, it amounts to 9 billion euros. A “crazy money”, to use the famous expression of the President of the Republic Emmanuel Macron about social assistance.

Cross-border workers penalized

At this point, not all unions are in favor of the new agreement. The text must still be definitively approved by their respective authorities. If validated by the central offices, it would come into force from 1^is January 2025.

According to our information, we do not know whether cross-border workers who are already unemployed will be affected. Or if only those who lose their jobs after January 1 will be.

We also do not know the details of the new calculation method and the coefficient proposed by the negotiators. According to some unions, the reduction could be significant. In a joint press release, the French CGT, Luxembourg OGBL and Swiss Unia and SGB USS unions estimate that with a coefficient system, “the average daily allowance could fall by 48% for a person who has worked in Switzerland”, for example.

Illegal measure?

Already, associations defending border workers are threatening to go to court, reports “Le Dauphiné Libéré”. It is not certain that such a measure, which can be considered discriminatory, is legal, as the French Constitution guarantees equality between citizens. Our colleague points out that, in the 70s and 80s, similar devices had already been considered. But justice then ruled in favor of the border workers.

On the BFM/RMC website, cross-border workers confide that they are therefore considering settling in Switzerland, so as not to be penalized in the event of unemployment.

Coefficient: a little music that plays

The idea of ​​a reducing coefficient for unemployed cross-border workers in France is not new.

On March 22, in a column published in “Les Échos”the economist Bruno Coquet et Jean-François Foucardconfederal secretary of the CFE-CGC executives union, proposed to “integrate into the reference salary formula a ratio between the French average salary level and that of the country or border zone where the lost job was paid” . According to calculations, this reform would save “at least 500 million (editor’s note: euros) per year of inefficient spending at Unédic.

In November 2022, another economist, Philippe Askenazyhe proposed, in a column published in “Le Monde”to modify the calculation of unemployment benefit for cross-border workers by moving “from a conversion of salaries received abroad at the market exchange rate to a purchasing power parity conversion”. And to quantify this idea: “In the case of Switzerland, the benefits paid to cross-border workers would drop by around 40%, or around 200 million euros less paid by the French regime.”

Fabrice Breithaupt is a journalist and editorial secretary. He deals with Franco-Swiss cross-border issues, but also real estate, employment and training. He has been a PR journalist since 1995 (radio, then written press).More info

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