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French Government introduces a bill to fund employment contracts for social enterprises – February 2016

The French Government has introduced a bill providing funding to pay for full-time employment contracts for French Social Enterprises.

By ESELA Posted 23/02/2016

A bill entitled “Collectivités territoriales : territoires zéro chômage de longue durée” (the “Zero Unemployment Bill”) was introduced in the National Assembly on 15 July 2015 by deputy Laurent Grandguillaume. The bill has passed the first reading in both the National Assembly and the Senate and is currently being debated in the Senate (as of February 18th). The bill will mostly likely be published in March 2016 and will enter into force in September 2016.

The Zero Unemployment Bill was proposed in order to reduce the unemployment rate in France. Indeed, as of October 2015, 2.4 million French people have been out of work for more than one year and more than 6,127,200 million French people are unemployed (in the metropolitan area). The government found that it was more expensive for the government to pay unemployment wages than to hire an unemployed person at minimum wage. The money previously used to finance long-term unemployment through social security and unemployment wages (RSA, SSA and subsidized contracts) will be redirected to pay for the employee’s remuneration. According to calculations by Laurent Grandguillaume, the implementation of the Zero Unemployment Bill would allow the government to save 15,000 euros per year per unemployed person.

If the bill is passed, French local governments will fund long-term employment contract (“CDI”) at minimum wage for employees of social enterprises (‘Social and Solidarity Economy Enterprises’). The money required will be centralized in a “territorial experimentation funds to combat long-term unemployment”. The state, regional and local councils will provide money for the fund, which will be managed by a local committee of elected officials and actors in social and solidarity economy.

The Zero Unemployment bill will first be tested on a dozen local governments for a period of five years. After this trial period, if the bill proves successful, it will be extended nationwide. At present, five territories have volunteered to implement the program: Pipriac (Ile et Vilaine), Grand Mauleon (Deux-Sèvres), Colombey-les-Belles (Meurthe et Moselle) and Jouques (Bouches du Rhône). Each of these territories have nearly 2,000 long-term unemployed people.

To find out more information about the bill, please visit the following website: http://www.assemblee-nationale.fr/14/ta/ta0679.asp

 Alissa Pelatan

Board Member, ESELA

Partner, AMP AVOCAT

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