Duration of compensation, opening of rights… What the unemployment insurance reform will change

Duration of compensation, opening of rights… What the unemployment insurance reform will change
Duration of compensation, opening of rights… What the unemployment insurance reform will change

With full employment in his sights, Gabriel Attal confirmed this Sunday, May 26, a tightening of unemployment insurance rules. The reform is due to come into force on December 1 and generate 3.6 billion euros in savings.

The government is tightening the screws. In an interview with La Tribune on Sunday, Gabriel Attal confirmed a further tightening of unemployment insurance rules with the aim of “moving towards full employment” and “valuing work even more”.

“If we do not reform unemployment insurance today, we risk stalling on the road to full employment. This reform is therefore the fuel that will allow us to create ever more work in our country,” assured the Prime Minister.

This new reform will be the subject of a decree on July 1 for entry into force scheduled for December 1. According to the government, this text will generate 3.6 billion euros in savings and will enable 90,000 additional people to be employed. Overview of the main measures.

• Work 8 months over a period of 20 months to open rights

Currently, to qualify for rights, you must have worked six months during the last 24 months, which constitutes the affiliation reference period. From December 1, you will need to have worked eight months over a reference period of only 20 months.

Unédic, which did not evaluate the impact of the hypothesis presented by the government, calculated that if this affiliation criterion had been raised to 12 months, the saving would have been 2.3 billion. Reducing the reference period from 24 to 18 months would have made it possible to achieve savings of between 5.1 billion and 7.5 billion euros.

• The duration of compensation reduced to 15 months

The maximum duration of compensation will be reduced from 18 to 15 months for those under 57 “under current conditions”, that is to say if the unemployment rate continues to evolve within a range between 6.5% 9% of the working population.

• Compensation more reserved for those aged 57 and over

Currently employees aged 53 and 54 can be compensated for up to 22.5 months, and those aged 55 and over for up to 27 months. The first level will disappear and the benefit of longer compensation will be reserved for unemployed people aged 57 and over.

Gabriel Attal also said he wanted “the proposal from the social partners to create a senior permanent contract to be studied” and will ask the Minister of Labor Catherine Vautrin “to launch negotiations after the summer, for a text of law by the end of the year”.

• A senior employment bonus

In order to encourage unemployed seniors to return to work, the government is creating a “senior employment bonus” to support the resumption of employment: it will make it possible to supplement for one year a salary lower than the previous one. This supplement paid by unemployment insurance will make it possible to compensate for the shortfall in salaries up to 3,000 euros.

The cost of this measure would be offset by a capping of the system for maintaining the rights of unemployed people close to retirement, noted François Hommeril, of the CFE-CGC, pointing out that this would penalize executives.

• 5 or 6 days less compensation

Instead of being calculated based on the number of days in the month (between 28 and 31), the allowance paid should in the future be the same every month for an unemployed person who has not worked during the period, on a 30 day basis. This will cause unemployed people who have not worked for an entire year to lose five or six days of compensation.

• A further tightening if the unemployment rate falls below 6.5%

Under the principle of “countercyclicality”, which has applied since February 2023, the duration of unemployment benefits is reduced by 25% when the unemployment rate remains below 9%. This rate is currently 7.5%.

This modulation will be reinforced if the unemployment rate falls below 6.5%, which would generate around 3 billion euros in additional savings. The duration of compensation for unemployed people under 57 would then be reduced by 40%, to a maximum of 12 months.

• An extended bonus-malus on short contracts?

Emmanuel Macron’s campaign promise in 2017, the bonus-malus is a system hotly contested by employers which aims to fight against the abuse of short contracts. It currently concerns companies with 11 employees and more than seven sectors that consume a lot of short contracts (such as accommodation and catering or transport and warehousing).

This involves modulating the employer’s unemployment insurance contribution – 4.05% of the payroll – upwards (malus) or downwards (bonus), depending on “the separation rate” of companies, compared to the median rate in their sector. Gabriel Attal announced that he was instructing Catherine Vautrin “to lead a consultation to identify the sectors which will be intended to enter this system and at what pace”.

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