It is always necessary to follow the development of regulatory measures to the end: the final version sometimes reserves a few surprises. This has just been demonstrated with the draft executive order on the reform of the unemployment insurance, which was sent on Friday 23 December to the social partners. Revealed by the specialized press agency AEF, the text introduces a new scenario consisting of reducing the duration of compensation by 40% when unemployment falls below 6%.
The employee unions are furious, both because of the content and the method: they assure that the government had not spoken to them in advance about this addition, which makes it possible to tighten the regulations for job seekers a little more.
The draft decree in question is linked to the law on “the functioning of the labor market”, which was published on Thursday, Official newspaper. The text plans to modulate the number of days a jobseeker receives an allowance, depending on the economic situation. This idea of ”countercyclicality” corresponds to a campaign promise of Emmanuel Macron.
Valid only until 31 December 2023
Today, someone who is unable to work can be covered for a maximum of 24 months if they are under 53, 30 months if they are 53 or 54, and 36 months for others. From 1eh February 2023, every unemployed person will be covered by a “reduction coefficient” of 0.75, which will have the effect of reducing the duration of the compensation by 25%. Example: A person who would have been entitled to 12 months of benefits under the current system will be supported for nine months.
This graduation takes into account the state of health of the labor market. In order to assess this, the executive board has chosen the unemployment rate as an indicator: if it is below 9%, as is the case today – at 7.3% – the reduction coefficient applies. If the situation worsens, with unemployment above 9% or up by 0.8 points over a quarter, the duration of benefits will return to today’s level.
These rules will only remain in force until 31 December 2023. Until then, employers and employee unions must negotiate new ones within a collective agreement framework. However, the mechanism of countercyclicality must be maintained, as specified by Labor Minister Olivier Dussopt during a press conference he held on 21 November. He added that it would be during these discussions “possible to consider” additional scenarios, or even “to make things even harder” whose“the goal of full employment, with 5% unemployment, has been reached”. But he did not give further details.
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