Unemployment insurance: a new law for October?

President Emmanuel Macron spoke about it during his campaign, he reiterated his remarks on July 14, confirming his desire to go further on the issue of unemployment insurance reform. He wishes to continue the work begun during his first five-year term, for the Head of State, this is one of the levers to be activated to regain full employment. Discussions should be held at the start of the school year.

The government wants to find solutions that will help restore full employment. Some reforms have been passed, but for the executive, this is not enough. The Minister of Labor Olivier Dussopt wants to follow the example of Canada and propose an evolving framework based on the country’s labor market and economic situation.

The latest unemployment insurance reform was passed by decree in 2019 and came into force only in 2021, due to the covid pandemic. Here are the changes that have been applied:

  • To be compensated, it is now necessary tohave worked at least 6 months or 910 hours over a period of 24 months (or 36 months for employees aged 53 or over);
  • Setting up a new employer certificate following the modification of the allowance calculation system. The duration and amount of the allowance have indeed been modified;
  • The degressive unemployment benefits for high earners (beyond 4500 euros gross per month) from the 7th month of compensation.

From November 2022, an assessment will be made to see if these changes have had an impact on unemployment figures, and if new reforms need to be put in place.

Go further with the bonus-malus system for companies

In order to lead a fight against short and precarious contracts, the government in place wishes to establish a bonus-malus system. Consequently, the unemployment insurance contributions of companies in certain sectors will be likely to vary according to the number of former employees registering with Pôle emploi.

The amount of the unemployment insurance contribution from companies to Pôle emploi will mainly change according to two criteria over an established reference period:

  • The number of employment contract terminations you have completed;
  • The number of registrations at Pôle Emploi by former employees.​​​​​​​
These two criteria determine a separation rate specific to the company. The contribution rate may thus vary between 3 and 5% (instead of the current 4.05%).
This applicable rate will then be calculated based on the median separation rate of the sector of activity.

  • If the company is above the latter, it will have to pay a penalty on its unemployment contributions.
  • If it is located below the latter, it will benefit from a bonus, ie a reduction in its contributions.

The government’s ambition is to extend the unemployment insurance reforms until the end of 2023. Indeed, it wishes to carry out a precise evaluation of these reforms while applying a bonus-malus system.

An evolving framework

The Minister of Labor Olivier Dussopt wants to follow the example of Canada and propose an evolving framework based on the country’s labor market and economic situation. The Minister of Labor wants to tighten the rules of compensation when the economy is doing well.

This is how he said:

There is an urgency: that the unemployment insurance reform, decided in 2019 and implemented in 2021 due to covid-19, sees its rules extended. They expire on November 1, 2022

For the Minister of Labour, it is also necessary to work on the duration of compensation, as well as on the decreasing nature of the latter.

The anger of the unions

The latest unemployment insurance reform was implemented less than a year ago.

Therefore, its effects have not yet been evaluated. Moreover, with inflation and the precarious situations experienced by some of our fellow citizens, a new reform could impact their daily lives, which are often already weakened.

A reform project planned for the month of October

The Minister of Labor Olivier Dussopt wishes to start a consultation with the trade unions and the employers’ organizations. This discussion is scheduled for the start of the 2022 academic year, and aims to present a reform project in October 2022. It will establish a framework concerning the criteria to be put in place for a possible evolution of unemployment insurance, depending on the economic situation of the country and the unemployment rate.

To learn more about the news, read our article on the revaluation of unemployment benefits

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