The French Social Security System V - Unemployment insurance

France's 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, and training, placing and paying benefits to jobseekers.

* As of January 1st, 2024, Pôle emploi is renamed France Travail.

Financing

The unemployment insurance scheme is financed through contributions paid on earnings: subject to the limit of 4 times the monthly social security ceiling (€14,664 in 2023). As from January 1st, 2019, only employers contribute into the employment insurance scheme. Employee's contributions have been ended, except for short-term contract workers in the entertainment industry (intermittents du spectacle), salaried workers in Monaco, and some expatriate employees. The State also pays into the employment insurance scheme to substitute for the employee's contribution, which has been eliminated.

Unemployment contributions are paid to the competent collections agency as determined by the workers' local authority: Urssaf in metropolitan France and the general social security fund (CGSS) in France's overseas departments.

However, Pôle emploi services collects unemployment insurance contributions for expats employed outside the European Union and for short-term contract workers in the entertainment industry (“intermittents du spectacle”)

Applicability

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

Benefits

Eligibility requirements

To qualify for unemployment benefits (Return to employment benefit /”ARE”), the claimant must meet the following 7 requirements:

• Be registered as a jobseeker.
• Not to have reached the age and number of quarters required for a full-rate pension or not qualify for early retirement.
• Effective December 1st, 2021: Have worked at least 6 months (i.e. 130 days or 910 hours) over the previous 24 months (over the previous 36 months for those at least 53 years of age on the date of their most recent employment contract). This requirement can be met with one or more contracts under one or more employers.
• Be involuntarily unemployed. However, applicants who have resigned from their job for certain legitimate reasons (e.g. to accompany a spouse) can qualify for unemployment benefits. In addition, effective November 1st, 2019, employees who resign can draw unemployment benefits if they submit a genuine, substantive career change plan. The plan must consist either of creating or taking over a business, or of completing a training program. Benefits, which are calculated on the basis of previous wages, can only be granted to applicants with at least 5 years of consecutive salaried employment and who requested career counseling through the official “CEP” (“conseil en évolution professionnelle”) program prior to their resignation. The applicant must also have had their career change plan approved by a regional committee and is required to register with the French unemployment authority “Pôle emploi” within a 6-month period following approval of their plan. For more information.
• Be physically fit for work.
• Be engaged in a substantive ongoing search for employment: have drawn up a personal employment plan (“projet personnalisé d'accès à l'emploi”) with the French unemployment authority “Pôle emploi”.
• Reside in the geographical area covered by France's unemployment insurance program.

Unemployment benefits can be stopped if claimants fail to meet their obligations by:

• being unable to document their job searches,
• rejecting a reasonable job offer on 2 occasions,
• missing required appointments scheduled by Pôle emploi,
• refusing to enter a training program, etc.

Benefits can be stopped for a period of 1 to 4 months, depending on the type of violation. Payments can be permanently stopped if the claimant declares false information.

Return-to-work allowance (“ARE”) rates

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 benchmark daily wage (SJR). Since October 1st, 2021, the benchmark wage has been based on gross earnings subject to contributions during the 24 months (36 months for people aged 53 and over) prior to the end of the employment contract. It is calculated as follows:

*The days not worked taken into account are capped at 75% of the number of days worked.

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

• 40.4% of the SJR + a set amount (€12.95)
• 57% of the SJR.

This amount cannot be below €31.59 (amount valid from July 1st, 2023) or exceed 75% of the SJR.

A degressive benefit

Effective July 1st, 2021, jobseekers under the age of 57 with an unemployment benefit award of more than €91.02* per day (based on a prior gross monthly wage of at least 4,500 €) draw 30% less from the 9th month of payment. However, benefits cannot be reduced to less than €91.02* per day.

For people whose employment contract ended on or after 1st December 2021, the sliding scale applies from the 7th month of compensation.

* Amount valid from July 1st, 2023.

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 compensation period has corresponded to the reference period taken into account in calculating the SJR, being the number of calendar days between the first day of the first contract and the last day of the last contract identified in the past 24 months, or the past 36 months for people aged 53 and over.

On February 1st 2023, a system took effect for adjustment of the compensation period according to the situation of the job market. For beneficiaries whose employment contract (or date of institution of the redundancy procedure) ends from 1st February 2023, the compensation period is reduced by 25%. This corresponds to the application of a coefficient for reduction of the compensation period equal to 0.75.

However:

• some periods (illness, maternity, occupational accident, training, some periods during the Covid-19 public health crisis, etc.) not covered by an employment contract are deducted from the number of calendar days counted between the two relevant dates;
• the days not worked (periods between contracts) are capped at 75% of the days worked.

In all cases, the compensation period may not exceed:

• 548 days (18 months) for people under the age of 53 on the end date of their employment contract;
• 685 days (22.5 months) for people aged 53 or 54 on the end date of their employment contract;
• 822 days (27 months) for people aged 55 or over on the end date of their employment contract.

In case of adverse economic climate, job seekers at the end of their entitlements (if they have fewer than 30 days of allowances left) will be able to benefit from an end of entitlement supplement. This supplement shall be a maximum of:
• 182 days for people under the age of 53, thus raising the maximum compensation
period to 730 days;
• 228 days for people aged 53 or 54, thus raising the maximum compensation period to 913 days;
• 273 days for people aged 55 or over, thus raising the maximum compensation period to 1,095 days.

The compensation period may not be less than 6 months, or 182 calendar days. The
application of the 0.75 coefficient cannot relate to a compensation period below 182 days.

Maintenance of entitlements until retirement at full rate

Beneficiaries aged 62 can have their entitlements extended until they claim their full-rate pension, under certain conditions. The compensation ceases at the age of retirement at full rate, and no later than between 65 and 67 years, age on which a full-rate pension is awarded, regardless of the number of quarters.

These conditions are as follows:

• compensated at the age of 62;
• compensated for at least one year;
• unable to claim a full-rate pension;
• have been affiliated to the unemployment insurance scheme for 12 years, including
one year continuously or 2 years discontinuously over the past 5 years;
• have at least 100 quarters validated by the pension insurance.

Return-to-work incentive measures

Roll-over entitlements

This program allows a jobseeker who is drawing unemployment benefits to take one or more jobs while accruing new entitlements and postponing the cutoff date for the existing entitlements they have not yet used.

To accrue new unemployment entitlements, the applicant must have worked at least 910 hours or 130 days (i.e. approximately 6 months) since their last unemployment benefits claim. This can have been through either a single or several periods of employment, whatever the duration and type of contract signed for each job (open-ended, fixed-term, or interim). These jobs must have ended before the applicant's benefit entitlement was exhausted.

If the applicant's last employment contract ended prior to November 1st, 2019, they are required to have worked at least 150 hours (1 month) in order to requalify for entitlements.

Employment termination date	Minimum period of employment in order to requalify for entitlements
Prior to November 1st, 2019	150 hours (1 month)
Between November 1st, 2019 and July 31, 2020	910 hours (6 months)
Between August 1st, 2020 and November 30, 2021	610 hours (4 months)
From December 1st, 2021	910 hours (6 months)

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.

Earning a salary while drawing 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 the claimant's benchmark daily wage (“salaire journalier de reference”/ SJR).