UNEMPLOYMENT INSURANCE. The Minister of Labor Olivier Dussopt announced the start of a consultation with the social partners in ten days, to find an agreement on the compensation of job seekers.
[Updated September 21, 2022 at 9:30 a.m.] Will an agreement finally be reached between the government and the social partners? For the time being, nothing is less certain in view of the more than marked disagreements between the two parties concerning the reform of unemployment insurance. The Ministry of Labor will send a consultation letter to employers and unions on the rules of compensation. This consultation could start in ten days if we are to believe the words of the Minister of Labor, Olivier Dussopt. The latter, accompanied by the Minister Delegate for Vocational Education and Training Carole Grandjean, received the social partners on Tuesday, September 13. The next debates promise to be heated, in particular with the trade unions. 13 of them have already published a press release in total disagreement with the executive’s proposals.
The government’s plan aims to extend the rules currently in force for unemployment insurance, enacted during Emmanuel Macron’s first five-year term and which had not failed to arouse controversy. These measures come to an end on October 31, 2022 and must be extended until 2023. Today, the government considers unemployment insurance to be too little incentive to return to work and plans to further tighten the conditions of compensation in going further than in 2019. As a reminder, the change in the calculation of the allowance, the bonus malus on short contracts and the degression of allowances are reforms already in place, they were part of the first part of the 2019 reform , mostly in force since 2021.
In 2022, the objective is to move up a gear based on my Canadian model, thanks to two main proposals. Against the advice of the unions, the executive now wants to modulate the conditions of compensation for the unemployed according to the economic situation, we are talking here about countercyclicality. In other words: when everything is going well, the rules would be tougher, when things are going badly, they would be relaxed. For now, two options hold the rope. First, change the duration of compensation for the unemployed (currently 24 months) and/or the number of months worked and compulsory over the last 24 to open the right to the allowance. Second option, gradually reduce the amount of compensation. Playing the famous 24 months seems like the most likely option at the moment. The Minister of Labor Olivier Dussopt still regrets an unemployment rate that is too high at 7%, and a great difficulty for employers to recruit. The new 2022 reform also provides for an overhaul of the validation of acquired experience (VAE).
With the 2022 unemployment insurance reform project, the government seems to want to go a little further than during the previous reform. Labor Minister Olivier Dussopt insisted that consultation with the unions absolutely had to take place in order to find a majority agreement. The next exchanges promise to be stormy and complex. In addition to the extension of the current compensation rules, the executive is considering several important new features:
Several provisions of the reform have already been implemented in 2021.
The bonus malus on short contracts
The objective of the bonus-malus is to encourage companies to extend the duration of employment contracts and avoid excessive recourse to short contracts. The bonus-malus consists of modulating the unemployment insurance contribution rate, which is currently 4.05%, upwards (malus), or downwards (bonus), depending on the separation rate of the companies concerned.
Change in the calculation of the allowance
Since October 1, 2021, the calculation of unemployment benefit has changed: the daily reference wage, which serves as the basis for the latter, is assessed by dividing the wages received during the last 24 months, by all the days whether worked or not. In order to prevent precarious workers alternating between short contracts and periods of inactivity from being affected, the Minister has corrected this measure, by introducing a floor. The latter will guarantee a minimum allocation. The number of days not worked taken into account in this calculation will also be limited to a maximum of 13 days not worked out of 30.
The degressivity of unemployment benefits
This new feature was introduced in 2021 for high earners. In detail, employees under the age of 57, whose salary exceeds 4,500 euros gross per month, will see their compensation reduced by 30% from the seventh month. The degression is expected, at the earliest, from June 2022 for people who opened their rights to unemployment from December 1. “Since July 1, 2021, the degressiveness of the allowance (-30%) applicable to employees under the age of 57 with a previous income of more than €4,500 gross per month takes effect from the 9th month, i.e. say after 8 months of compensation”, indicates the public service site. “The degression will take place from March 2022 for people who opened their right to unemployment on July 1, 2021. The 6-month count at the end of which the degressivity applies had been suspended between March 1, 2020 and June 30 2021, or 487 days in total. He started filming again from July 1, 2021.”
Since December 1, 2021, the compensation rules have changed concerning the minimum duration of affiliation and the degressiveness of the allowance. To establish the amount of the return to work allowance, Pôle emploi takes your former salary into account. The ARE must be equal to the higher amount between these two formulas, explains Pôle emploi on its site:
As an indication, the SRJ corresponded until the reform of October 1, 2021 to the annual reference salary divided by the number of days worked over the last twelve months, which precede the last day worked. “The maximum number of days worked retained over the reference period is 261 days”, could we read on the public service site. “The calculation of the SJR is obtained as follows: SJR = reference salary / (number of days worked x 1.4)”.
From now on, for new job seekers, the calculation will be made over the last 24 months by dividing the wages received during this period by the number of days spent, whether they were worked or not. A ceiling of 75% will be applied for days not worked.
The amount of the return to work allowance is strictly regulated: it must be between 57 and 75% of the daily reference salary. The amount cannot be less than 29.38 euros per day. An amount that should be qualified, since this amount corresponds to the situation of a person working full time, recalls Unédic on its website.
“After part-time work, the calculation of your allowance follows the same rules as for a full-time job, but it takes into account your particular working time”, indicates Unédic on its dedicated page. “For this, Pôle Emploi uses a part-time coefficient. This coefficient is equal to your number of weekly working hours, divided by the legal (35 hours) or conventional weekly schedule applied in your former company”.
To receive the ARE, you must be involuntarily deprived of employment. You must justify, at the end date of the employment contract, a minimum period of work. The public service website provides you with a simulator to try to find out the amount of your ARE according to your situation, click here. The ARE payment can be combined with other earned income. The payment of the ARE ceases if you find a salaried professional activity. The compensation conditions are not the same before or from November 1, 2019 and depending on your age.
The amount of allowances paid to jobseekers increased on July 1, 2022. A decision taken following a Unédic board meeting on Thursday, June 30. Regarding unemployment benefit, the increase should concern 2.1 million recipients. Are you a beneficiary of the ARE (return to work allowance)? You will pocket 30.42 euros per day, compared to 29.56 euros previously (for the minimum allowance). The fixed part of the ARE increases slightly from 12.12 euros per day to 12.47 euros per day.
You have lost your job and you want to know if you meet the conditions, do not panic. Bear in mind that civil servants and private sector employees can benefit from the ARE under the same conditions. But what are these? We summarize the rules in force:
Unemployment insurance, also called social guarantee of the company manager (GSC) covers the manager or corporate officer in the event of involuntary loss of his job. Whether you manage an SA, SARL, or EURL, you are never safe from a revocation of mandate for various reasons, emanating from your partners or shareholders. It may or may not be justified, but above all it can cause you to lose your job. Generally, it is a question of a non-renewal of the mandate. In this case, the company does not cease its activity. The director’s mandate can also be revoked early.
