UNEMPLOYMENT INSURANCE. This Tuesday, October 11, 2022, the deputies adopted the unemployment insurance reform at first reading. We take stock of what could change for job seekers if the text is finally adopted.
[Updated on October 11, 2022 at 8:18 p.m.] On Tuesday, October 11, 2022, the deputies adopted, at first reading, the reform of unemployment insurance. With 303 votes in favor, the first reform of Emmanuel Macron’s second five-year term was able to count on the vote of the members of the presidential majority and the elected Les Républicains. The support of the latter was expected, after their amendment concerning job abandonment had been adopted on October 5th. From now on, the text will therefore have to be examined by the Senate.
This bill, if adopted definitively, should profoundly change the conditions necessary to receive unemployment insurance. Firstly, the government may, by decree, extend the unemployment benefit rules until December 31, 2023. Otherwise, job seekers could no longer be compensated from November 1, 2022. In addition, the text provides that the executive may, by decree once again, modify the conditions of compensation for the unemployed. In this sense, the Minister of Labour, Olivier Dussopt, has repeatedly recalled the methods that the government wishes to implement: “When things are going very well, the rules must be incentivising, and, when things are less well, they need to be more protective,” reports Le Monde.
Another measure has caused much ink to flow since it was added, by amendment, on Wednesday, October 5th. That of the “presumption of resignation”. The objective of the measure voted is to limit the recourse of employees to the practice of job abandonment “when they wish their employment relationship to cease, while being compensated by unemployment insurance”. “This provision would not apply to employees who leave their position for health or safety reasons”, state the amendments. Under current law, a dismissal for abandonment of position constitutes a dismissal for fault and does not deprive the dismissed of his right to benefit from unemployment insurance.
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:
The text of this new unemployment insurance reform is an extension of several provisions already put in place in 2021 at the end of Emmanuel Macron’s first five-year term.
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 allocation). 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.
