France : New rules on unemployment benefits (convention d'assurance chômage)

On 14 April 2017 the latest unemployment insurance agreement (convention d'assurance chômage) was agreed by trade unions and employers' organisations and entered into for a period of 3 years.

The provisions of this agreement come progressively into force from 1 October 2017 and will be applicable for a period of 3 years under the supervision of a steering committee. The key modifications are described below.

What will change for companies?

• There will be a slight increase of the employer's contribution – to 4.05% (from 4%).
• There is a reduction of the surtax on fixed-term contracts of three months or less, except for fixed term contracts that are specific for certain economic sector (contrat à durée déerminée d'usage) where the surtax is maintained for a period of 18 months.
• The contribution exoneration which applies for the employment of an employee aged under 26 years old (for a period of 3 to 4 months depending on the size of the Company) is abolished.

These provisions are all applicable from 1 October 2017.

What will change for employees?

Modifications applying to employees are applicable from 1 November 2017.

• Conditions to be affiliated to the unemployment insurance
  • To be entitled to unemployment benefits a person must justify that he/she has worked at least 88 days (instead of the current minimum of 122 days) or 610 hours (which is the same as the current minimum). This will allow people employed under short term contracts to more easily access unemployment benefits.
  • Specific rules for temporary workers (intérimaires) are abolished.
• Modification of the method of calculation of unemployment benefits
  • For employees whose employment contracts terminate from 1 November 2017, the daily reference salary is calculated according to the following method: salary of reference/number of days worked under the period of reference for the calculation. Only the actual worked days count, regardless of the length of the employment contract; weekends and bank holidays are excluded.
  • This method of calculation is intended to ensure better equity between jobseekers.
• Deferred compensation
  • The method of calculation and the conditions of the deferral period for payment of the benefits (where employees have received enhanced termination payments) are modified. The current cap of 180 days will be lowered to 150 days.
  • For persons who are made redundant, the cap is 75 days.
• Rules applicable to older employees
  • Currently, older employees (aged 50 and over) have a right to unemployment benefits up to a period of 36 months (instead of 24 for other unemployed people). From 1 November 2017, progressive rules will apply, in particular to encourage older employees to undertake training:
    • between age 50 and 52, the maximum period for which it is possible to receive unemployment benefits will be 24 months. If the person chooses to use his personal training savings account (compte personnel de formation) this can be credited with additional hours, capped at 500 hours, if needed to fulfil the training project.
    • between age 53 and 54, the maximum period for which it is possible to receive unemployment benefits will be 30 months with the same possibilities regarding training.
    • from age 55, the maximum period under which it is possible to receive unemployment benefits will remain 36 months.