Home » Business » Unemployment insurance: 25% reduction in the duration of compensation from February 1

Unemployment insurance: 25% reduction in the duration of compensation from February 1

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( AFP / PHILIPPE LOPEZ )

The unemployment insurance reform comes into force on Wednesday February 1, it will not apply in Overseas France and certain populations are excluded such as intermittent performers, fishermen or dockers.

Objective of the reform, which comes into force on Wednesday February 1:

modulate the conditions of unemployment insurance

according to the situation of the labor market, in order to have rules “more encouraging to the resumption of employment”. The executive justifies it by the recruitment difficulties of companies, and makes it a first stone of its strategy for

reach full employment in 2027,

ie an unemployment rate of around 5% (against 7.3% currently).

The text provides

a decrease of 25%

the duration of compensation for all job seekers who open rights from 1 February. It will not apply in Overseas and

certain populations are excluded

like the intermittents du spectacle, the sailors-fishermen or the dockers. An unemployed person who would have been entitled, for example, to 12 months of compensation under the current system will not

straighter than at nine months.

Seniors drop from a maximum of 36 months to 27.

A minimum floor of six months will be preserved. The first impacts are therefore expected from August 1st. For job seekers who will see their benefit period reduced, a

“end of rights supplement”

(an extension of the duration) is provided for in the event of a deterioration in the labor market, if unemployment exceeds 9% or if it increases by 0.8 points or more over a quarter.

Towards 100 to 150,000 additional job returns this year?

The government hopes

100 to 150,000 additional job returns

in 2023 thanks to the reform. These arguments are

strongly rejected by the unions.

The latter are all the more dissatisfied as Unédic, a joint body which manages the unemployment insurance scheme, recently drew up an initial assessment of the previous unemployment insurance reform, launched in 2019 and fully entering into force at the end of 2021. This reform has tightened the conditions of compensation for job seekers, in particular those who alternate periods of work and inactivity. According to Unédic, it resulted in

a decrease of 16% on average in daily allowances

for affected unemployed.

The government is due to send the social partners an orientation document at the beginning of February so that they can work on a

new governance of the regime.

The trade unions and employers’ organizations are in favor of this negotiation to clarify the responsibilities of the State and the social partners.

Unemployment insurance is managed by the social partners who manage Unédic. But since the 2018 law, their margins of negotiation are restricted by a

“framing letter”

of the government which sets objectives (particularly savings) to be achieved. Some macronists plead in particular for the Parliament to be associated.

France Labor

For the elected Renaissance official Marc Ferracci, “governance must allow

a new balance

between social partners, State and Parliament, in order to respect a principle of political responsibility. Today, the social partners are not held responsible for unemployment, even though they have leverage to act because the rules of unemployment insurance have

an impact on unemployment and precariousness.

Those who are held accountable are the government and the parliamentary majority.”

Once this new governance has been adopted, the social partners will – as usual – have to negotiate

a new compensation plan

which will be in force from 2024. Which would coincide with the

creation of France Travail

to better coordinate the actors intervening on employment. The government has already made it known that the question of

modulation according to the economic situation

“will have to be incorporated” into these discussions.

In the explosive context of the pension reform, the executive announced the

temporary withdrawal

of a controversial part of his project which provided for a possible reduction in the duration of compensation by 40% if unemployment falls below 6%. But, warned the Prime Minister,

“we will put this subject back in the consultation

on the future rules of unemployment insurance”, Elisabeth Borne considering that it is “the good rule of compensation”.

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