against’was a compromise found at the last minute. Social partners arrived on Friday, November 10 at unemployment insurance contract. Discussions on defining new rules for jobseeker’s compensation began on 22 September, and the current agreement expires on 31 December. The government took a back seat.
Within days, the negotiations ran into a November 15 deadline set by Élisabeth Borne. If this deadline is not met, the Prime Minister threatened that her government will determine the terms of the compensation itself.
In the outline letter sent by 1this one In August of last year, she presented demands on the new unemployment insurance system to the social partners, calling for a “significant reduction of the debt”. This should be determined at 55 billion euros at the end of 2023. The contract foresees 815 million euros of additional spending and 1.5 billion less income.
The negotiators met the deadline. Employers – Medef, CPME and U2P – and trade unions – CFDT, CFTC and FO – now have until November 17 to get their bodies to approve the text. CGT and CFE-CGC have already announced that they will not sign it. If the procedure is successful, these new rules will come into force from 1this one January 2024. Here are the key points.
- Less strict conditions for receiving compensation
New entrants to the labor market must, in order to apply for unemployment insurance, have worked for at least six months in the last twenty-four months. This minimum has been six months so far. The minimum period during which these newcomers will be paid is set at five months, compared to the current six. As for the new entrants, seasonal workers must work for five months to receive compensation, and their minimum duration of compensation will also be five months.
- More favorable daily wage calculation
The formula for the daily wage amount will be more generous. As a reminder, the amount of compensation is calculated based on the daily reference salary (SJR). However, from 1this one October 2021, this SJR is defined according to the average monthly income that an unemployed person has achieved in the last twenty-four or thirty-six months. Which means that days not worked reduce the SJR, and thus the amount of compensation.
The agreement stipulates that these non-working days are not taken into account beyond a certain upper limit in the calculation of SJR. From now on, for 100 days worked in the reference period, only a maximum of 75 additional unworked days can be retained.
- The benefit reduction will affect fewer unemployed people
It entered into force on 1this one July 2021, mechanism of digression reduced compensation by 30% from the seventh month for certain unemployed persons: under 57 years of age and whose daily reference wage exceeds 156.68 euros per day (or 4,857.81 euros per month). In all cases, the compensation cannot be less than EUR 91.02 gross per day. Under the agreement, you will now have to be under 55 to be covered by the degression: 55 and 56-year-olds are now exempt.
- The monthly payment of the compensation passes for a period of thirty days
The compensation paid will be identical each month on a thirty day basis, regardless of the actual number of days that month includes. Thus, users will lose one day of compensation every month of thirty-one days, but will gain one day in February, and even two if it is a leap year. During the whole year, therefore, the unemployed will lose five days of compensation, and six in the case of a leap year. According to employers’ calculations, this measure would bring Unédic 950 million in four years.
- New rules for seniors later
The agreement refers the provisions concerning the allowance for the elderly to dedicated negotiations, which are expected to start soon. But the amount of savings to be achieved is already stated: 440 million euros in the period 2024-2027.
- Fewer short contracts subject to bonus-malus
The goal of bonus Malus is to avoid excessive recourse by companies to short-term labor contracts. An employer whose company makes a lot of use of these contracts compared to the average of its sector will have to pay a higher contribution to unemployment insurance. So far, all contract terminations have been covered: permanent contract, fixed-term contract, temporary work. According to the agreement, this will only affect the end of a contract that lasts less than a month. This was a measure demanded by the employers.
- Reduced employer contributions
The employer’s contribution to unemployment insurance will be reduced from 4.05% to 4% of the gross salary by abolishing the temporary extraordinary contribution that was introduced in 2017. This will lead to a drop in income of 1.5 billion euros. during four years for the unemployment insurance system.