It is an unappreciated gift that the unions received from the Ministry of Labor just before Christmas. The draft decree on the reform of unemployment insurance, which is to come into force on February 1, wants to toughen more than expected the conditions of compensation for the unemployed in the event of full employment.
As announced, the text presented to the National Commission for Collective Bargaining, Employment and Vocational Training does provide for the establishment of a system “countercyclical”reducing unemployment benefits as the labor market tends towards full employment.
In order to encourage the unemployed to turn to unfilled jobs, it provides for a 25% reduction in the duration of compensation for all job seekers who will open rights to unemployment insurance from from February 1 in mainland France.
Hardening of the rules in the event of full employment
But what is new is that it also plans to reduce this duration of compensation by 40% if the unemployment rate, currently at 7.3%, were to drop below 6%.
The unions, like the CFDT, say they have discovered this provision. This organization denounces « a new arbitration once again in favor of the most fragile”.
The Minister of Labor Olivier Dussopt had not however ruled out, when presenting his reform on November 21, “a second tightening of the rules if we were to achieve full employment expected at the end of 2023”.
The track studied then was a 60% reduction in the duration of compensation if unemployment fell below 5%, the level below which we generally speak of full employment.
“End of rights supplement” if unemployment starts to rise again
The trade unions are called upon to give an opinion on this text, but which is only advisory. These provisions are presented while, according to an internal document from Unédic, the organization managing unemployment insurance, the previous reform of unemployment insurance, which came into force at the end of 2021, led to an average reduction of 16 % of unemployment benefit.
This drop, caused by a new method of calculating the reference salary of job seekers, was intended by the government to encourage them to find work more quickly. In return, the duration of compensation had been extended.
It is this duration which must be shortened within the framework of the new reform. It also provides that the unemployed will be able to receive a “supplement at the end of rights” if the labor market were to deteriorate (i.e. if the unemployment rate rose above 9% or increased by 0 .8 points or more over a quarter).
The text of the decree presented to the social partners also provides that certain trades, such as intermittent entertainers, fishermen or dockers, are excluded from the reform.
Extension of the “bonus-malus” on precarious contracts
Finally, it extends until August 31, 2023 the “bonus-malus” system on the social security contributions of seven major sectors (hotels and restaurants, transport and warehouses, etc.) particularly consumers of precarious contracts.
This system provides for a modulation of employers’ contributions to unemployment insurance. They are normally at the rate of 4.05%. This provision provides that they can increase to 5.05% if the number of breaches of precarious contracts by a company is too much higher than the average for its sector.
According to another study by Unédic, this system, which entered into force in September 2022 and which would have concerned nearly 18,000 companies, would “globally financially neutral”with 206 million euros in additional contributions paid because of the malus, against 195 million not paid because of the bonus.