Unemployment insurance: a reform in three points

Suspended during the health and social crisis, the unemployment insurance reform finally came into force from July 1, for the most part. However, certain provisions of this reform have been postponed by the Council of State, pending an improvement in the economic situation linked to the health crisis.

The bonus-malus comes into force for companies using short contracts

The bonus-malus consists of modulating the unemployment insurance contribution rate (employer’s contribution) currently 4.05%, depending on the separation rate of the companies concerned.

The 7 sectors that consume the most short contracts with more than 11 employees are the following:

– Manufacture of foodstuffs, beverages and tobacco products;

– Production and distribution of water, sanitation, waste management and depollution;

– Other specialized, scientific and technical activities;

– Accommodation and catering ;

– Transport and storage;

– Manufacture of rubber and plastic products as well as other non-metallic mineral products;

– Woodworking, paper and printing industries.

These sectors were identified by measuring, during the period between January 1, 2017 and December 31, 2019, their average separation rate, an indicator which corresponds to the number of terminations of employment contracts or temporary assignments of registration with Pôle Emploi in relation to the workforce of the company. All these sectors have a rate above 150%.

Consequence of the Bonus-Malus:

– If these companies have used short contracts more than the median of other companies in their sector: they will have to pay an additional contribution of up to 5.05%;

– If, conversely, they have offered more durable contracts: they will benefit from a reduction in their contribution within the limit of 3%.

Date of application: September 1, 2022. The rate will be calculated based on the end of the contract or interim assignments observed between July 1, 2021 and June 30, 2022.

Exception for the 1st year: the companies most affected by the crisis (sector S1 such as cafés-hotels-restaurants) will not see their rate modulated for the first period.

The rules for calculating unemployment benefit are modified

The minimum membership period will increase from 4 to 6 months

It is provided that job seekers must have worked at least 6 months (i.e. 130 days or 910 hours) in the last 24 months (last 36 months for those over 53) preceding the end of the contract to open rights to unemployment compensation.

Given the consequences of the health crisis on the labor market, the minimum period of membership necessary to open or recharge a right to unemployment insurance benefit remains set at 4 months (instead of the 6 months initially envisaged) and this, until a lasting improvement in the employment situation is observed.

To date, jobseekers must therefore have worked 88 days or 610 hours (i.e. 4 months of activity) during the last 24 months preceding the end of the contract (last 36 months for employees aged 53 and over) . This minimum duration may have been completed several times (with several employment contracts).

Due to the health crisis, these periods of 24 and 36 months are exceptionally extended by the number of days between March 1 and May 31, 2020 (1st health crisis period) and between October 30, 2020 and April 30, 2021 ( 2nd health crisis period) which are included in the initial membership reference period of 24 or 36 months.

The calculation of the reference salary becomes less favorable

From July 1, 2021, unemployment benefits are calculated on the average monthly income from work and not only on the days worked as before. These new rules apply to employees whose last end of employment contract occurred on or after July 1, 2021.

The SJR (reference daily salary) is calculated as follows: remuneration for the last 24 months (36 for employees aged 53 or over) / number of calendar days (i.e. days worked and days not worked) during this period.

The daily reference salary will thus reflect the average salary received over the period between the start of the first contract and the end of the last contract in the last 24 months. Consequently, in the event of continuous work in the reference period, the amount of the SJR will remain the same. On the other hand, if the reference period includes periods not worked, the SJR will be reduced.

The decree of March 30 introduces a floor that limits the drop in the SJR to a maximum of 43% compared to the calculation method of the 2017 agreement.

The duration of compensation is extended

The minimum compensation period should be increased to 182 days (against 122 days before the reform).

The count of days compensated has been suspended since March 2020 and will be reset to 0 for all beneficiaries on July 1, 2021.

The allowance will be decreasing from 4500 euros of gross average salary

It will concern job seekers who are under 57 and who receive a daily allowance exceeding 85.18 euros (ie a previous monthly salary of more than 4,500 euros gross on average).

After seven months of compensation paid at the full rate, the jobseekers concerned will receive an allowance reduced by 30% from the 8th month.

The count of days compensated before application of the degressivity will be reduced to 6 months when the clawback clauses are fulfilled.

This allowance may not be less than 85.18 euros.

It is therefore important, for the seven sectors concerned by the application of a bonus-malus, to think about improving their human resources strategy. Favoring long contracts will allow them to benefit from a bonus for their unemployment insurance contributions.

As for employees, in the long term, when the economic situation has returned to “better fortunes”, the reduction in their allowances may be offset by the extension of the duration of compensation.

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