Short contracts: bonus-malus does not influence employers' practices

With the introduction of the bonus-malus system designed to combat precarious employment, the first adjustments to unemployment contributions will be made in September 2022, but employers who resort to short contracts are ignoring the alternatives promoted by the government. The CPME (Confederation of Small and Medium-sized Enterprises) and other observers believe that we can expect a slowdown in the number of contractual terminations. Read more.

Introduction of a bonus-malus system to combat precarious employment

In 2021, the government has announced the launch of a bonus-malus scheme to limit job insecurity by encouraging employers to extend the duration of employment contracts and avoid massive recourse to short contracts. The bonus-malus system consists of adjusting the unemployment insurance contribution rate (currently 4.05%) upwards or downwards according to the separation rate. The separation rate is determined in relation to the number of terminations of employment or temporary employment contracts followed by the registration of the former employee with Pôle Emploi.

In other words, the more a company reduces its separation rate by making efforts to reduce the number of registrations with Pôle Emploi, the less it will pay in unemployment insurance contributions. To avoid having to resort to very short contracts or repeated temporary assignments, employers have every interest in extending the duration of employment contracts and reducing the number of fixed-term contract terminations, temporary assignment terminations, redundancies and "ruptures conventionnelles". Several other tools are available to them, such as employer groups and the CDI intérimaire.

The first application of the bonus-malus will take place in September 2022, taking into account a separation rate calculated over the period from July 1, 2021 to June 30, 2022.

20,000 companies affected initially

The bonus-malus scheme will initially target 7 business sectors. These are those with a separation rate of over 150% prior to the health crisis. Of these, only companies with more than 11 employees will be concerned. In all, from September onwards, some 20,000 companies will benefit from this new system.

For the moment, in the absence of statistics, the Ministry of Labor is unable to estimate the dissuasive effects of this measure. The CPME, for its part, maintains that the alternatives proposed by the government, namely the grouping of employers and the temporary CDI, have not influenced employers' practices. The organization explains this by the fact that the bonus-malus system does not apply to all companies. Moreover, the labor market has evolved since the observation period began on July 1, 2021.

" SMEs will only really take action when they see their new contribution rate," reports Eric Chevée, CPME vice-president in charge of social affairs, to Les Echos newspaper.

As part of a recent internal commission, and after interviewing several member federations, Eric Chevée noted that companies are beginning to refuse to accept conventional severance packages, as they are taken into account when calculating the separation rate. " This adds another element of tension," he explains.