How does compensation work for cross-border workers who find themselves unemployed?
In Luxembourg, as elsewhere in Europe, the rule is simple, and it is clearly indicated on the Adem website: “As a cross-border worker, in the event of loss of your job in Luxembourg for reasons beyond your control, you can , under certain conditions, benefit from financial assistance in your country of residence to compensate for the absence of your main source of income.
If you are a cross-border worker in Luxembourg, you contribute to the country’s unemployment insurance. But if you lose your job, you will register for unemployment in your country of residence to receive your compensation. “The legislation of your country of residence will determine the percentage of compensation that will be paid to you, as well as the duration of payment,” explains Adem.
For a French cross-border worker who has worked at least six months in Luxembourg over the last two years, it is therefore France Travail (formerly Pôle Emploi) that you should turn to and register. “The rights that he opens up in France in this way are identical to those that he would have obtained by working in France,” specifies Unédic, the organization responsible for unemployment insurance in France. The calculation of allowances will be based on salaries received in Luxembourg. Please note that this approach does not prevent you from also registering with Adem as a supplement, to look for a job in Luxembourg in particular.
How many former Luxembourg workers benefit from this “border right” in France?
According to Unédic, which uses figures from INSEE for 2020, there are 445,000 cross-border workers in France. Nearly half carry out professional activity in Switzerland; 22% in Luxembourg, or 95,800 people. Note that this figure now easily exceeds 100,000. In the case of Switzerland and Luxembourg, there is no need to draw a picture: the attractiveness of the country – first and foremost the salaries compared to France – plays a major role.
But more than their number, it is their increase over a decade that is noteworthy. 445,000 cross-border workers in France is “+26% compared to 2011, when there were 353,000. This increase is mainly driven by workers who work in Switzerland (+55,000 between 2011 and 2020) or in Luxembourg (+27,000 between 2011 and 2020),” underlines Unédic.
Concerning cross-border workers who receive unemployment in France, there are, again according to Unédic, a total of 77,000 in 2023. This is 50% more than in 2011. Among them, some 17,000 beneficiaries worked in Luxembourg; there were 11,000 in 2011.
Do we know how much these cross-border beneficiaries receive?
Yes, and this is still thanks to Unédic figures dating from the end of 2023. Let us first point out that the average amount for all beneficiaries compensated by the French unemployment insurance system is 1,265 euros gross per month.
But, you will have understood, as this allowance is calculated according to the salary received in the country where one worked, it is higher for Luxembourg cross-border workers. They thus receive, on average, 1,781 euros per month. This monthly allowance was between 1,400 and 1,500 euros in 2011 and has therefore increased, partly due to inflation.
The available data allows us to go into the details of compensation, and to note significant disparities between “French” and “Luxembourg border” recipients. Thus, we learn that almost a third of beneficiaries who worked in Luxembourg receive between 1,000 and 1,499 euros, and almost a quarter between 1,500 and 1,999 euros. Whereas in France, the most provided range of compensation is that of 500 to 999 euros (34% of beneficiaries).
Why is compensation for cross-border workers from Unédic a problem?
All these figures provided by Unédic come from a report, published at the beginning of October. Soberly titled “Compensation for cross-border workers through unemployment insurance”, this report, in fact, calls into question a completely unbalanced financial situation.
“Each year, the compensation system for cross-border recipients represents an additional cost of around 800 million euros per year for the unemployment insurance system,” summarizes Unédic. And this for two reasons. On the one hand, as we said previously, the number of cross-border workers eligible for unemployment benefits has continued to increase in recent years. But, above all, it is the method of financing the system which fuels criticism of Unédic.
In fact, cross-border workers do not contribute to the unemployment insurance of their country of residence. However, there is a compensation system established at European level: the border state where the person worked – Luxembourg in this case – reimburses between three and five months of unemployment benefits, depending on the situation, upon State of residence. But “in fact, the duration of compensation for cross-border beneficiaries residing in France far exceeds the maximum five months reimbursed by the country of employment,” specifies Unédic.
Hence the overall additional cost of 800 million euros per year mentioned by Unédic. In the particular case of Luxembourg, this additional cost amounted to 137 million euros in 2023.
Are solutions possible?
Still according to Unédic, yes, but the procedures drag on. Since 2016 precisely, with “Negotiations on the revision of the European coordination regulation” which have not succeeded at the level of the European Commission.
The proposal made “aims to confer the burden of compensation on the Member State having received the contributions when the cross-border worker has worked there for at least twelve months and to have it borne by the State of residence in other cases. As a result, the current reimbursement procedure would be eliminated,” explains Unédic. For Switzerland, which is not part of the EU, the same provisions would then have to be adopted by a joint committee.
The French organization is careful not to criticize border states, for whom the current compensation system is advantageous. Unédic rather targets Europe: “The renewal of European institutions makes the continuation of negotiations between the Council and the European Parliament uncertain”.
“Every year spent is a year gained”
For Georges Gondon, president of the Frontaliers Luxembourg association, it is necessary to evolve on the subject, which is part of a more global framework according to him, “whether it is this question of unemployment benefits, but also teleworking or even taxation”. “Today, in the Grand Duchy, cross-border work is no longer an adjustment variable. It has become a structural element. It is essential, essential, part of the economic landscape.”
But for the president of Frontaliers Luxembourg, there are unfortunately many blocking points at the moment. He notes two: “First there is the fact of dragging it out. We also see this in other issues, for example that of family allowances for blended families: each year spent is a year gained. And then there is also the phenomenon of each State withdrawing into itself. Previously, we were moving towards “more Europe”. Today, more and more, in the name of national sovereignty, States want to decide for themselves.”
