“a ruthless reform” for Laurent Berger

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Unemployment Insurance: "ruthless reform" for Laurent Berger

UNEMPLOYMENT INSURANCE. The unemployment insurance reform will make it possible to reduce the duration of benefit for beneficiaries by 25% if the unemployment rate remains below 9%. A measure opposed by the unions.

[Mise à jour du jeudi 24 novembre 2022 à 13h36] Referring to the reform of unemployment insurance, CFDT Secretary General Laurent Berger denounced an “absurd budgetary” measure, which consists of “saving 4 billion euros from the unemployment insurance system”. The former of the CFDT particularly lamented the reform’s impact on “job seekers in training”, believing that the latter “will see their compensation fall as they struggle to increase their skills to find a job” . According to the leader of the CFDT, the reform “will have no effect on employment”. Minister of Labor Olivier Dussopt hopes for “100,000 to 150,000 additional returnees to work” by 2023 thanks to this reform.

These statements come as the reform was approved in mid-November by parliament. In particular, the text provides for aauthorize the government to modulate by decree the duration of unemployment benefits. Specific, if the unemployment rate is below 9% or if it falls for three consecutive quarters, a reduction coefficient is applied to the duration of the benefit, reducing it by 25%. This situation corresponds to what the Secretary of Labor calls the “green period”. Conversely, if the number of job seekers rises above 9%, it means that the country is entering a “red period”. In this specific case, the coefficient can be increased and the duration of the reimbursement is therefore extended.

Unemployment insurance and compensation, how does it work?

The unemployment insurance reform, led since 2019, has undergone numerous changes in 2021 and 2022. At the initiative of the government, the text provides for compensation for the self-employed and resigning workers, provided that the latter undergo retraining or set up a business.

To be eligible for unemployment insurance, you must have worked for at least 6 months during a period of 24 months prior to the end of the last contract. Currently, the duration of the remuneration is applied according to the following principle: one day worked yields one day of remuneration. The maximum period during which a jobseeker can receive benefits is 24 months for persons under 53 years of age, 30 months for persons aged 53-54 and 36 months for persons over 55 years of age.

A reduced compensation period in 2023?

This is one of the foundations of the new unemployment insurance reform. The bill authorizes the government to change by decree the duration of unemployment benefits, depending on whether the employment situation is “green” or “red”. In detail, the “green period” corresponds to an unemployment rate of less than 9%. The “red period”, meanwhile, corresponds to an unemployment rate of more than or equal to 9%.

For example, in 2023, the duration of unemployment insurance compensation will no longer be fixed, but flexible. A reduction coefficient of 0.75 will be applied when the labor market situation is considered “green”. Conversely, no coefficient is applied during the “red” period.

The coefficient of 0.75 corresponds to a 25% decrease in unemployment insurance entitlements. Here are some examples of the impact this measure will have:

  • A jobseeker who would have benefited from 24 months of unemployment under the old rules will see his rights reduced to 18 months.
  • A jobseeker who would have benefited from 20 months of unemployment under the old rules will see his rights reduced to 15 months.
  • A jobseeker who would have been unemployed for 10 months under the old rules will see his rights reduced to 8 months.

Note, however, that theThe unemployed must receive benefits for at least 6 monthsregardless of the applied coefficient.

The Minister of Labour, Olivier Dussopt, indicated that the criterion for assessing the health of the labor market in France will be the unemployment rate as defined by the ILO. The reform will only affect people whose contracts have been terminated after 1 February 2023. The modulation planned by the government will be introduced by decree, initially until the end of 2023. Others excluded from the new system: intermittent artists, fishermen, dock workers and residents of overseas departments.

Unemployment insurance reform: what will change for my employment contract?

Deputies and senators initially opposed the text of the unemployment insurance reform, but eventually found a compromise at a joint committee on Nov. 9. A hardening of the text was imposed in particular by right-wing senators. The measure provided for in the final text of the reform depriving employees of unemployment benefits who twice refuse to convert their fixed-term contract or their temporary assignment into an indefinite-term contract. To apply this measure Olivier Dussopt, confirmed that employers will be responsible for notifying Pôle Emploi of these denials. Indeed, the Minister of Labor explained that “Pôle Emploi cannot know today if an employee has previously been refused a job with a permanent contract, which is why it is necessary to reorganize the reporting and information transmission system”. To the tenant of rue de Grenelle to specify that a simple device will be installed to avoid administrative overload for company managers.

No unemployment benefit after leaving the job?

From now on workers who quit their jobs will no longer be beneficiaries of unemployment insurance. Until now, employers initiated dismissal procedures against employees who voluntarily left their position without resigning. However, the new reform stipulates that a relinquishing the position is now considered a “presumed resignation”, as a result of which you are not entitled to unemployment benefits. The person whose abandonment would be due to legitimate reasons (eg if his health or safety would be endangered) will be able to seize the prud’hommes.

The judges then have one month to decide whether or not to overturn the presumption of acquiescence. on his side, the employer must set a time limit after which the employee must justify his absence or resume his duties. Otherwise it is tantamount to dismissal. The employer is obliged to inform the employee of the known deadline by personally delivered registered letter.

Towards an extension of the bonus-malus for employers?

This system, which has been applied since September 1, 2022 in industries that regularly use short-term contracts, will be extended until August 31, 2024. In concrete terms: the measure consists of modulating employer contributions to unemployment insurance according to employers’ use of short-term contracts. Those who misuse it pay a fine (up to 5.05% of contributions, up from 4.05% in normal times), while those who play the game benefit from a bonus (reduced contributions to 3%).

The amount of unemployment benefit is calculated from the reference daily wage (SJR). The latter is obtained by adding up all the salaries that the employee has received during the 24 months prior to the end of his last employment contract (36 months for beneficiaries aged 53 and older). Subsequently, this amount must be divided by the number of days corresponding to the duration of the compensation, ie the days worked and the periods of inactivity, during which reduced pay was received (sick leave, parental leave, maternity, partial activity). The quotient resulting from this formula is the daily reference wage (SJR).

The daily allowance of the WW corresponds to 57% of the SJR. The result may not be less than EUR 30.42 gross per day (minimum allocation) and not more than EUR 256.96 gross per day (maximum allocation). Finally, Pôle Emploi multiplies the amount of the daily allowance by the number of days in the month. This final calculation indicates the compensation that the jobseeker will receive each month. For high salaries, a degressivity may apply to the amount of the allowance, with a reduction of 30% after 8 months of compensation.

Private unemployment insurance, for whom?

Private unemployment insurance is an insurance policy that makes it possible to absorb the drop in income due to the loss of work. It is intended for business executives as the main insurance, who do not benefit from support from Pôle Emploi. It may also concern employees who want help in addition to traditional unemployment insurance.

Affiliation to unemployment insurance

Unemployment insurance is compulsory for all private sector employees and financed by them in the form of payroll taxes. All private employers must join unemployment insurance. Solidarity, the allowance makes it possible to support ex-employees with low incomes, who are privileged compared to those who received a high salary, as best as possible.

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