Unemployment insurance. Private employees contribute to unemployment insurance. This allows them to receive an allowance in the event of a job loss. The government is considering a new reform.
Unemployment insurance is an allowance paid to private sector employees who have lost their jobs. The right to compensation is calculated on the basis of the previous salary of the unemployed person. Unemployment insurance plays two roles: it helps the financially unemployed manage their job loss, by maintaining their purchasing power and living conditions. It also offers a solution to get back to work through personal support. The allowance is paid during periods of training, business creation or retraining.
Unemployment insurance reform: what is changing for the unemployed?
Unemployment insurance reform has been underway since 2019, but new changes are applicable in 2021 and 2022. Here are the four main points of unemployment insurance reform:
- new allotment account;
- Reducing unemployment benefits (deterioration) for people with high incomes;
- Reward for unemployment contribution;
- Change the minimum working time to obtain unemployment insurance.
This reform provides compensation for the self-employed and the resigned employees of the retraining project, under certain conditions. The minimum working period for unemployment benefit increases from 4 months to 6 months of work in the 24 months preceding the end of the last decade.
New fix in 2022?
TheThe CEO explained in the summer of 2022 a “quick return to employment” for the long-term unemployed, as the Minister of Labor, Olivier Dusupt, noted in columns for Le Parisien. He emphasized that there is an urgent need: that the unemployment insurance reform, which was passed in 2019 and implemented in 2021 due to Covid, see the extension of its rules. And it expires on November 1, 2022, we want to extend it, to allow this reform to continue to have its positive effects and to think about the next step.”
The Minister also wishes to amend the unemployment insurance compensation rules, taking into account the economic situation, similar to what has been established in Canada. There are several methods on the table:
- Change the duration of compensation for job seekers
- Gradually reduce the amount of compensation
“These criteria will be discussed in the framework of the consultation, emphasizes Olivier Dusupt, stressing that no method has been identified. As for the transition from a good state to a deteriorating state, it must be a topic. This assessment will pass either through the criteria, such as a number of chapters sequentially with an improvement in employment, or by a committee that gives us an opinion.” At the end of the questions to the government in the Senate, the minister repeated his remarks on Wednesday 27 July 2022.
Unemployment insurance and compensation
Unemployment insurance or ARE (assistance allowance to return to work) is calculated on the income of the last 12 months, taking into account the days worked. The unemployment insurance reform provides for new calculation rules, setting the average monthly income including working days and periods of inactivity. For higher salaries, a depreciation may be applied to the amount of the allowance, with a 30% reduction after 8 months of compensation.
private unemployment insurance
Private unemployment insurance is insurance that makes it possible to compensate for a decrease in income after a job loss. It targets business leaders as a major guarantee, and the latter does not benefit from the help of Pôle Emploi. It can also relate to employees who want help in addition to traditional unemployment insurance.
Join the unemployment insurance system
Unemployment insurance is mandatory for all private sector workers and is financed by them in the form of salary deductions. All private sector employers must join the unemployment insurance system. Solidarity, the allowance makes it possible to provide the best support to former employees of low income, who prefer those who benefited from a high salary.