The French Social Security System V - Unemployment insurance

2018

The unemployment insurance scheme is the product of a negotiated agreement between the two sides of industry (national and multi-industry employers' and employees' organizations).

The government then approves the agreement if it is pursuant to applicable law. This approval makes the agreement officially enforceable.

The Unemployment insurance system applies to metropolitan France, the overseas Departments, Saint Pierre and Miquelon, Saint Barthelemy, Saint Martin, and Monaco. It does not apply to Mayotte, which has its own system.

Organizational structure

The public employment service is organized around two bodies: the bipartite body UNEDIC (National Professional Union for Employment in Industry and Trade), which will continue to perform its task of administering the unemployment insurance scheme and organizing the benefits payment system, and the service for jobseekers ("Pôle emploi").

Pôle emploi brings all employment services under a single body, with a single point of contact for registering, counseling, training, placing and paying benefits to jobseekers.

Financing

The unemployment insurance scheme is financed through contributions paid on earnings: subject to the limit of 4 times the monthly social security ceiling (€13,244 in 2018).

Since 1st January 2011, unemployment insurance and AGS contributions due by employers for their employees have been collected by the URSSAF and by the CGSS in the overseas departments on Unédic's behalf.

Applicability

The scheme is applicable to all employees of companies in geographical areas covered by the agreement.

Benefits

The amount and duration of benefit payments depend upon the period during which the claimant has contributed to the scheme and total contributions paid.

Entitlement

To qualify for unemployment benefit (Return to employment benefit or ARE), the claimant must satisfy the following conditions:

  • have involuntarily lost their job (termination by the employer, the end of a fixed-term employment contract or an assignment contract, termination by mutual agreement or resignation for a valid reason),
  • be physically fit for work,
  • be registered as a jobseeker with "Pôle emploi" and comply with a personal return-to-work plan,
  • be actively seeking employment,
  • be able to document at least 88 days or 610 hours (4 months) of work over the previous 28 months, or in the last 36 months for jobseekers aged 53 and over, before becoming unemployed,
  • be below the legal minimum retirement age (62 for those born on January 1st, 1955 or later) or the qualifying age for a full pension(between 65 and 67 depending on year of birth),
  • accept "reasonable" job offers (sanctions apply if a jobseeker refuses more than two such offers),
  • reside in the geographical area covered by the Unemployment insurance program: Metropolitan France, overseas departments (except for Mayotte), Saint-Pierre-et-Miquelon, Saint-Barthélemy, Saint-Martin, and Monaco.

Replacement income

The return-to-work allowance ("Aide au retour à l'emploi"/ ARE) guarantees replacement income to eligible employees who have been involuntarily deprived of a job.

“ARE” rates are calculated partly on the basis of a daily reference wage (SJR). The reference wage is based on gross earnings subject to contributions during the 12 calendar months prior to the last day of paid work (calculation reference period/ “PRC”) up to a limit of 4 times the monthly social security ceiling (€13,244). It is calculated as follows:

*The weighting factor of 1.4, or 7/5, is used to convert the number of days worked to calendar days.

SJR = Reference salary/ Number of days worked during the calculation reference period X 1.4*)

The daily ARE rate is equal to the highest of the following amounts:

  • 40.4% of the SJR + a set amount (€11.92)
  • 57% of the SJR

This amount cannot be below €29.06 or exceed 75% of the SJR.

Effective date and length of award

Payment begins on the day following the waiting period and any deferred compensation period(s).

  • The waiting period is 7 days long. It applies to all unemployment insurance compensation and is in addition to any:
  • Deferral for "paid vacation", calculated based on the "paid leave" compensation that is paid at the end of the employment contract,
  • "Specific" deferral, calculated based on "non-statutory" (higher than the legal minimum) termination compensation which is paid when an employment contract is terminated. This deferral is for a maximum of 150 days, 75 days when the employee has been laid off for economic reasons).

The duration of benefit payments is based on the principle of "a day of work equals a day of compensation". The days of work that count toward eligibility are multiplied by 1.4 in order to determine the payment period.

Payment cannot be made for under 122 days or more than:

  • 730 days (24 months) for persons under age 53,
  • 913 days (30 months) for persons between the ages of 53 and 55,
  • Or 1094 days (36 months) for persons ages 55 and above (age is calculated as of the date the employment contract was terminated).

Return-to-work incentive measures

The May 14, 2014, agreement on unemployment compensation set forth measures that encourage jobseekers to return to work, even on a short-term contract. They are applicable from October 1st 2014. The agreement of April 14, 2017, the majority of the provisions of which are applicable as from November 1st, 2017, preserves these measures.

Roll-over entitlements

This program allows a jobseeker who is receiving unemployment benefits to take one or more jobs and perform a total of 150 hours or more of work without losing the entitlements s/he had acquired at the time of his/her first application for benefits. This means that the jobseeker can add the new entitlements earned from a short period of employment onto the entitlements that had not been used when employment was resumed.

Ability to choose between old and new entitlements

Under certain conditions, and as an alternative to roll-over benefits, individuals can choose to receive the benefit to which they are entitled based on their latest period of employment without having to first use up their unused entitlements from a previous period of unemployment. This opportunity can arise when a jobseeker receiving benefits begins a new job that is better paid than the one that entitled him/her to the initial benefits. If the jobseeker uses this ability to choose, s/he permanently gives up any remaining benefits resulting from a previous ARE entitlement in order to draw new entitlements at a higher rate.

For more information, visit the UNEDIC website.

Earning a salary while receiving unemployment benefits

It is possible to receive return-to-work (ARE) benefits at a partial rate on top of earned income, with no consideration for the number of hours worked.

Benefits paid if a salary is being earned at the same time are calculated as follows:

  • Benefits that would be due without employment – 70% of the gross monthly salary earned from the new employment.

However, this amount is capped: it must not exceed your daily reference salary (“salaire journalier de reference”/ SJR).

More information is available on the UNEDIC website.