The government intends to modulate the duration of the unemployment benefit based on the unemployment rate in France. During a meeting at the Ministry of Labor on Monday morning, Minister Olivier Dussopt informed employers’ and trade union organizations of “the arbitrations adopted” after a consultation that began in October.
The mechanism chosen by the executive is a modulation according to the unemployment rate. If it is below 9% or if it falls for three consecutive quarters, the country will be in the “green period” and the duration of the rights will be reduced by 25% with a minimum floor of 6 months. If the unemployment rate exceeds 9% or rises 0.8% in a quarter, the country enters the “red period” and entitlements are reset to 100%.
This new unemployment insurance reform is inspired by the Canadian system, whose main parameters vary according to the economic situation of the country. “Our compensation rules must take into account the situation of the labor market, as Canada does, for example,” he had taken Olivier Dussopt as a model in an interview with the Parisian at the end of July.
The regional unemployment rate is taken into account in Canada
In Canada, unemployment insurance (“employment insurance”) is based on a modulation of both the duration and the potential amount of compensation paid to job applicants. The number of hours worked required to qualify for benefits depends on the regional unemployment rate applicable to the claimant. The higher the unemployment rate, the lower the number of hours worked required during the reference period.
The duration of the compensation, which varies from 14 to 45 weeks, also depends on the regional unemployment rate in addition to the number of hours worked during the reference period. Thus, the higher the unemployment rate, the longer the duration of compensation. Regarding the calculation of the allocation, the level of the unemployment rate observed at the regional level plays a more marginal role.
The system is complex. It is a matter of taking more or less into account the possible differences in the salary level that the worker who is unemployed receives each week. The lower the unemployment rate, the less the job seeker benefits from having been especially well paid during certain weeks during the period considered for calculating his allowances.
Up to 20 additional weeks of compensation in the United States
In France, “we will not touch the amounts of the compensation, since at 57% of the last salary they are in the European average, only the duration of the compensation will vary,” Labor Minister Olivier Dussopt promised this Sunday during the Grand Rendez-vous Europe 1-CNews-Les Echos. Nor is the regional approach likely to be taken into account in the French model.
In the United States, the duration of unemployment compensation also varies depending on the economic conditions of the country. The duration and amount of the compensation as well as the contribution rates applicable in their respective territories are determined by the federal states. Unemployment insurance is thus made up of 53 different schemes in the United States.
In most federal states, the period of compensation is a maximum of 26 weeks. But when the unemployment rate reaches a certain threshold, an automatic rights extension scheme kicks in. The duration of the compensation is then extended for an additional 13 weeks and 20 weeks in certain cases.
Source: BFM TV
