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Improving employment and compensation conditions The government has taken a strong stance on tougher compensation conditions to facilitate a quick return to work and to crack down on companies that rely heavily on short-term contracts. With the aim of saving around 3 billion euros and generating job opportunities for more than 250,000 people, the government has implemented significant changes.

Reform access to unemployment insurance: limit short-term contracts and set up a bonus/malus system

One of the main changes concerns the conditions of access to unemployment insurance. To qualify, individuals must have contributed at least 6 months in the past 2 years and have worked at least 6 months to extend their benefit period by an equivalent amount. This revision directly targets the prevalence of short-term contracts. In order to limit their use, the government has introduced a bonus/penalty system which applies to sectors known to exploit such contracts, such as hotels and hotels.

Impact on managers: reduction in remuneration and incentive for active re-employment

Sanctions will be introduced to discourage companies from abusing short-term contracts. In addition, for senior executives looking for work, their remuneration will be reduced by 30% from the 7th month of compensation, with a few exceptions for people aged over 57 and those who earned less than 4,500 euros. This measure may come as a surprise, because it mainly affects executives who contribute significantly to the unemployment insurance fund.

The main objective of the government with these strict measures is to incentivize companies to provide more stable and long-term employment opportunities. By discouraging the misuse of short-term contracts and imposing penalties, the aim is to create a more sustainable labor market. In addition, the reduction in the remuneration of executives after a certain period aims to encourage them to actively seek re-employment and to limit the use of unemployment benefits.

These reforms reflect the government’s commitment to improving the effectiveness and efficiency of the labor market. By tightening the conditions for compensation and promoting a rapid return to employment, the government is seeking to strike a balance between supporting people in need and promoting a dynamic and sustainable economy.

Learn more about unemployment reform .

DAMY Law Firm