The Minister of Labor, Catherine Vautrin, has been engaging in discussions with union and employer representatives to present the proposed reforms to the unemployment insurance system. A decree is set to be implemented between July 1st and December 1st, with the aim of creating 90,000 jobs and saving 3.6 billion euros annually. However, the proposed changes have been met with criticism from social partners, with some calling it the worst reform in the history of the system.
The government plans to make it harder for job seekers to qualify for benefits, with a focus on extending the period of eligibility. Currently, individuals must have worked six out of the past 24 months to receive benefits, but this may change to eight out of the past 20 months. This change is expected to impact young people and those in precarious employment situations such as temporary workers and seasonal employees. Additionally, the “countercyclical” mechanism introduced in a law from December 2022 may be further refined to adjust benefit duration based on the economic climate, with additional reductions in benefits if the unemployment rate falls below a certain threshold.
The leaked details of the reform suggest a significant overhaul of the unemployment insurance system, with the potential for up to a third of beneficiaries being affected. The changes have raised concerns among social partners and workers, with some expressing strong opposition to the proposed measures. The government aims to tighten the eligibility criteria and reduce the duration of benefits in certain circumstances, in an effort to incentivize job seekers to find work more quickly and reduce overall expenditures on unemployment benefits.
The reform also includes adjustments to the “bonus-malus” system for companies, which penalizes those with high turnover rates by increasing their contributions to the unemployment insurance fund. The government seeks to expand this system to hold more employers accountable for contributing to the unemployment insurance system and to encourage more stable employment practices. The changes are part of a broader strategy to address the challenges facing the labor market and to ensure the sustainability of the unemployment insurance system in the long term.
The final decisions on the reform are set to be announced by the Prime Minister, Gabriel Attal, with the decree expected to be implemented gradually over the coming months. Despite ongoing discussions with social partners, it appears that the government is committed to moving forward with the proposed changes to the unemployment insurance system. The reform is a key initiative of the government’s agenda to address the economic challenges facing France and to strengthen the social safety net for workers.
