How France is changing its unemployment benefits system

The French government began implementing reforms to unemployment benefits in July, but certain measures were delayed until October because of the pandemic. Here's what has already changed, and what will change in the future.

“In France, you must earn a better living by working than by staying at home, which is currently not always the case,” President Emmanuel Macron said in a televised address on July 12th, during which he laid out his post-Covid economic recovery plan.

During his speech, he announced that changes to unemployment benefits would be “fully implemented” from October 1st. Elements of the reform had already come into effect on July 1st, but France’s Council of State had suspended additional changes to the way benefits are calculated.

Two main elements of the reform were implemented in July.

The first is a bonus system for businesses in industries which use an excessive number of short-term contracts. Businesses will be monitored over the course of 12 months; at the end of that period, those which resorted to short-term contracts more than the industry average will see unemployment insurance contributions rise by up to 1 percent of their payroll, while those offering more long-term contracts will have to contribute less.

This will apply to 21,000 businesses of 11 or more employees. However, companies such as hotels, cafés and restaurants, which have been hard hit by the health crisis, will not be included until next year.

The second measure affects those under the age of 57 who were earning more than €4,500 gross per month before they became unemployed. 

Unemployment benefits in France are paid as a percentage of your previous salary, not a flat rate, so people who were previously high earners get more.

Now those in the under 57 and €4,500 per month category will see their benefits fall by up to 30 percent after eight months of claiming unemployment allowance.




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