© AFP
A new proposal tabled in France's National Assembly this autumn aims to reform the way unemployment benefits are paid to cross-border workers, which could eventually require Luxembourg to cover the costs for its foreign employees.
Under current EU rules, jobseekers are compensated by the country where they live, not where they last worked. This means, for instance, that French cross-border workers who lose their jobs in Luxembourg receive unemployment benefits from France, even though their social security contributions were paid in Luxembourg.
That system, designed decades ago when cross-border work was limited, no longer reflects today's labour market, especially in the case of Luxembourg.
In early October, Isabelle Rauch, an MP from the Moselle region representing the Horizons party, submitted a European resolution proposal to the National Assembly to modernise the framework for both unemployment and dependency-related benefits. The plan revives an EU-level idea discussed about ten years ago but later shelved: allowing benefits to be paid by the country of employment rather than the country of residence, provided the person worked there for at least 12 months.
In practice, a French cross-border worker employed in Luxembourg would no longer register with France Travail but instead with Luxembourg's employment agency, Adem, and would receive benefits under Luxembourg's rules. The same would apply to, for example, a French worker in Switzerland or a Polish worker in Germany.
Rauch told RTL that the goal is to update the system for the entire European Union, stressing that Luxembourg was not being singled out. She said it was only logical for the country where social contributions are paid to be the one that provides unemployment and dependency benefits.
The existing mechanism for financial transfers between member states would remain in place for workers who are only partially compensated by their last country of employment, but Rauch suggested that this arrangement should be strengthened. She also proposed harmonising how the reference salary is calculated so that periods of employment across several countries can be fairly taken into account.
France faces heavy losses under the current system
The proposal comes at a time when the French government is eager to reduce public spending. The current arrangement is costly for France: a cross-border worker employed in Luxembourg pays into Luxembourg's social system but, if they lose their job, receives benefits from France's National Interprofessional Union for Employment in Industry and Commerce (Unédic).
Luxembourg only reimburses the equivalent of three months' unemployment payments, thanks to a special exemption, which Rauch considers unfair. Her proposal describes such an imbalance as unsustainable and calls for a financial "rebalancing" between member states.
Between 2011 and 2023, France is estimated to have lost around €9 billion covering unemployment benefits for cross-border workers employed in Luxembourg, Switzerland, Belgium, and Italy. Employers and unions from France had once reached an agreement to reduce unemployment entitlements for cross-border workers to lower the cost, but the government ultimately decided against implementing it.
If adopted, Rauch's resolution could be examined by the European Affairs Committee, then forwarded to the government and eventually to the European Commission. However, she acknowledged that France's current political gridlock might slow progress. Still, she insisted that France has no intention of letting the issue fade away.
Isabelle Rauch, députée de la Moselle (Horizons) a déposé la proposition de résolution européenne pour revoir l'indemnisation du chômage dans l'UE. / © Telmo Pinto/NurPhoto) (Photo by Telmo Pinto / NurPhoto / NurPhoto via AFP
© AFP
