French News in English
May 2000, Monthly, Issue
No. 37, 50 Francs
boost employment and productivity
Different schemes to help you
save on labour cost and to provide training
The French employment security
system is far more elaborate than it appears at first
sight. It is not just a system of providing an
unemployment dole to those who cannot find employment.
It is also a system of subsidies to ensure that
employers do employ those whose marginal productivity
is not as high as the French minimum wage, but is
nevertheless greater than the employer's marginal
cost. For this, there is either a need to reduce the
marginal cost to employers or to increase the marginal
productivity of certain unemployed. Employment
Subsidies are provided to achieve the former, and
Subsidised Training is provided to achieve the latter.
About 900,000 contracts for subsidies are signed every
year. According to the Ministry of Employment and
Solidarity, about 1.5 million of the 13.8 million
employed in the non-farm private sector benefit from
some form of employment aid. In 1998, 34% of
enterprises used the Adaptation Contracts, 23% used
Apprentices and 17% used Qualification Contracts.
Some of the schemes for boosting
employment are indicated in the table below.
|Exoneration of social security in urban and
rural revitalisation zones.
||To help develop these zones, help is given to
recruit people working there.
||Exoneration of employers' social security
contributions, welfare and work-accident
insurances associated with a salary up to 1.5
times the SMIC, for one year.
||Recruit for at least a year.
Exoneration of social security in Tax-Free
|To help these underdeveloped zones.
||Exoneration of employers' social security,
welfare and work-accident insurances
contributions associated with a salary up to 1.5
times the SMIC, for one year.
||Recruit for at least a year.
|Hiring the first employee
||Encourage people to hire others.
||Exoneration of the employers' social security
contribution (up to the SMIC).
||24 months for a permanent employment, 18
months for a fixed term contract
|Aid to shift to part-time work
||To avoid dismissing people for economic
reasons, the employer shifts them to part-time
||The employer provides a supplement to the
employee for shifting to part-time work. The
State finances 20% to 80% of this supplement.
|Reduction of social security charges on low
||To encourage use of unskilled persons, earning
less than 180% of SMIC.
||A regressive reduction of employers' social
||Now reserved for those who have adopted a
|Contract for a mixed employment policy
||Employment of women
||The State provides subsidies for modifying
equipment, training and the salary during the
|Consolidated Employment Contract
||Those having difficulty in finding a job*
Unemployed for more than a year* Older than 50
years*Younger than25 years*Handicapped
||Help is provided to the employee to construct
his goals and projects. He can work for at least
30 hours a week on up to five consecutive
one-year contracts or on a permanent contract.
||Limited to Localities, public bodies, non
profit associations. The State and the private
sector are excluded.
|Solidarity Employment Contracts
||People facing difficulties in finding
employment *18 to 25 year olds*Over 50 years*Long
term unemployed*Those on minimum social welfare.
20 to 35 hours per week of work, paid at the
SMIC, for a duration of 3 to 12 months.
||Those on the ASS can accumulate their dole
with the remuneration of the contract. The
employers get a subsidy from the State for the
salary and for the training provided.
||Limited to Localities, public bodies, non
profit associations. The State and the private
sector are excluded
|Employment Initiative Contract
||People facing difficulties in finding
*16 to 25 year olds. *Over 50 years old *Long-term
unemployed. *Disabled people less than 30 years
|The employee can get training of 200 to 400
hours. Subsidy of FF 1000 or FF 2000 per month.
Exoneration of some social security charges for
the employer for employing those over 50 year
||Permanent of Fixed period contracts of 12 to
24 months for at least 16 hours per week
|People facing difficulties in finding
employment *Youth less than 26 years not having
worked before. *Those over 26 years *Those
unemployed for over a year
||Salary is 30% to 75% of SMIC, depending on age
of the employee. The employer may also be waived
social security charges and be reimbursed part
of the training. Subsidy of FF 5000 or FF 7000
if employee has CAP or BEP (diplomas)
||6 to 24 months contract, renewable once. The
employee is to be provided training for 25% of
|Insertion of disabled workers
||To help the disabled to find work.
||The employer is provided a bonus of FF 15,000.
||The employee has to be recruited for at least
|Aid for Disabled Workers
||Financing all or part of the additional
equipment necessitated by the handicap of the
||Young people less than 26 years. To get
||200 hours of training is provided to the young
person, paid by the State. The employer has to
pay only 80% of the conventional wage.
||Contract of 6 to 12 months, renewable once.
||Young people less than 25 years.
||The employer pays 25% to 78% of the SMIC,
depending on the age. There is a waiver of
employers' and employees' charges : the extent (all
charges or only social security) depends on
number of employees: up to 10 or more than 10)
||The employer has to train the employee for at
least 400 hours per year.
||16 to 25 year olds, without any qualifications
are provided training and a job to orient them.
||The employer pays 30% to 65% of SMIC depending
on age of employee. He may also be exempted from
social security and welfare charges and be
reimbursed for the training.
||Maximum of 6 or 9 months, depending on the
|Youth Employment contracts
||*18 to 25 year olds.
*26-30 years olds if they are not entitled to
*Disabled people less than 30 years old.
|The State provides a subsidy to the employer
of FF 93,840 for a full-time job.
||Public sector organisations and associations
enter into 60 months contracts with young people,
with a trial period of a month or two. Options
exist for terminating the contract at the end of
|The Employment Replacement Allowance :
||Helps people take early retirement (before the
age of sixty) and the enterprise to replace them
with young people
||The retiring employee is provided 65% of his
salary till the age of 65.
||The employer has to replace the retiring
employee with a young person
|The special allowance convention of the
FNE-Premature retirement or Discharge
||Over 57 year old, having worked for at least a
year in the enterprise...and many other
||The employee gets a preretirement salary of
65% of his last salary till the age of 65.
|Progressive early retirement agreement
||For people 55-65 years, it helps them accept
||The employer has to recruit unemployed people.
|Reclassification Cells Convention
||For enterprises wishing to participate in the
reclassification training of their ex-employees
dismissed for economic difficulties.
|Adaptation training Convention
||People who may get dismissed if they don't get
reclassification training: either on-the-job
(adaptation) or outside (training).
||The State finances training initiatives of
more than 120 hours outside the enterprise: a
part of the training cost and the salary of the
employees during the absence
||The employer has to keep the employee for at
least a year thereafter.
|Training to get into an enterprise
||To allow the unemployed to access the job and
to make-up deficiencies between training and
||The employees are free for the employer as
they are considered to be under training and are
paid an allowance either by ASSEDIC or by the
||40 to 750 hours of training.
|Collective training for insertion and
Accession to Employment
||To help people having difficulty in finding
||The job-seeker has to be at least 26 years old
and unemployed for at least 12 of the previous
||40 to 1200 hours of training.
|Individual Training for insertion and
Accession to Employment.
||Individual training to help people having
difficulty in finding work
||The Unemployment agency helps you find the
right training adapted to your needs.
||40 to 430 hours of training.
Law to limit
accumulation of political mandates
- A pay-hike for salaries of
most French Members of Parliament (MP)
Politics is also a source of
employment. French efforts to boost employment are
therefore examining this field too. There are over
500,000 political elective posts, although many of
these posts are in small villages and are merely
nominative and do not constitute real employment.
However, the same person may hold many important
posts, further accentuating the unemployment of some
and increased wealth of others. One estimate of
multiple mandates puts the figure at 9,000 cases.
The table below gives an idea of the
situation concerning French MPs.
|President of the General Council
|President of the Regional Council
|Member of European Parliament
* Situation on 28 April 1998, 2 seats vacant
** Situation on 19 may 1998, 2 seats vacant.
Source: Report 909 to the National Assembly.
More that half of French MPs are mayors. While only
a small percentage occupy other executive positions
(President), three-fourths are councilors in
municipalities. Only 13% hold no other post. For
deputies (lower-house), 10% held no other mandate, 52%
held one mandate, 38% held two mandates. A negligible
percentage (only three persons) had three mandates.
The situation is the same for Presidents of Regional
Councils. There are only a few who hold no other local
In other advanced democracies, this phenomenon is
not so marked. Some legally prohibit the accumulation
of some political mandates. This legal prohibition may
be contained in the Constitution (Belgium, Spain and
Italy) or may be imposed by a law (Greece, Portugal).
In others, it is the custom that ensures that a few
greedy politicians don't try to stick their fingers in
every pie. In Sweden, Finland, Denmark, Ireland, the
UK, the USA and Germany, there is no legal
prohibition, but few politicians accumulate different
functions (80 out of the 659 English MPS had another
local mandate, similar situations prevail in Spain and
Italy). In the USA, the practice of checking conflict
of interest before validating a Congressman's
election, and State laws prohibiting local mandates to
American Congressmen, ensure the same result. In
Germany, some Länder prohibit local mandates to EU
MPs. But usually, it is the ceiling on or suppression
of the local remuneration, in case of multiple
mandates, that serves as a severe disincentive to
cumulating mandates in England and Germany. This
remuneration sanction is also found to apply to
Spanish Senators who are not affected by the
The most important reason for the high accumulation
of political mandates in France, increasing
drastically during the 5th Republic (1958 onwards), is
the extremely centralised nature of French politics
and administration. This means that local politicians
are more effective if they are present in the Assembly
or in the Senate, even as opposition members. This is
a vicious circle because with the accumulation of
mandates, the decentralisation project loses
Another reason is that the French political parties
have grouped around notable personalities, rather than
having a strong citizen base. Just as recent
illustrations, take Chevènement or Pasqua, who have
been able to sustain parties due to their individual
importance. As a result, the parties have not been
strong enough to refuse the notables the right to all
they want to acquire.
To these two reasons can be added the mode of
elections to the French Parliament based on individual
majority scrutiny for each arrondissement. This system
favours the creation of individual celebrities. To
have a good return on the party's investment, it is
obvious that the party would like to run the
"built-up" contestants in many races. And it
is not possible to avoid this individual scrutiny
system, because it is the price one has to pay so that
the central parties can keep the extremists
(especially nationalists) out of Parliament, and out
of any real influence.
Yet another reason is that with the power of the
executive government, the MPs of the majority feel
that they have no real say once the government has
been designated. Their vote is taken for granted on
party lines. The opposition MPs know they can't defeat
a motion. So, why come to Parliament, where they don't
have any real power? The same individuals therefore
derive far more satisfaction from their local mandates
and are reluctant to lose them.
Since the mandate of mayor is either unpaid or pays
very little, this local official needs another
activity to support him. To take advantage of synergy
in his investment, it is obvious that he stand for
election at other levels too. Besides which, by
spreading his eggs, if he is defeated in one arena, he
has a safety-net to fall back upon.
For some time now, French political scientists have
been questioning the wisdom of having a few
all-powerful politicians. The problems created are
Effectively, the interests of a region and that of
a nation may clash. What is good for Brittany may not
be good for France as a whole. What is good for Europe
may not necessarily be the best situation for France.
The clash of interests is often avoided in federal
countries where the competencies of the different
levels are clearly indicated, but in unitary States
like France, to avoid conflicts of interest, it is
necessary that a person represent just one region. At
least, a representative to French Parliament should
not represent other major regions. This is especially
true if the system of public finance and equalisation
payments is to be made more objective.
Another defect is the erosion of the balance of
power between the different functions. In the French
administrative system, there is a State (Executive)
control of the local elected representatives through
the Prefects. But if the local elected representative
is also in the national government or Parliament, he
assumes more importance than the local Prefect.
Besides the clash of interests, the work of a
Parliamentary representative is considered onerous
enough to be a full-time occupation, and is well paid.
As a result, MPs should not be squandering their
energies or time on other activities. What is
happening at present is that the MPs are so busy
regulating one of their many interests, that the
debates in the Parliament are held before an empty
Moreover, instead of a few people hogging all the
positions, others must be given a chance. Besides
stimulating new blood and new ideas, this would help
to reduce the unemployment of those wanting a
political career and help to end the oligarchic
control of a few. The latter has also led to an
alienation of the general public towards the clique of
a few politicians, manifested by the drop in voter
turn-out in elections, and laying the base for the
Nationalist accusation that the more central parties
in government and opposition are all a gang of ENArchs
(from the Ecole Nationale d'Administration), colluding
together to keep power in the hands of a few. The
accumulation of political mandates is therefore seen
as fodder for the populist National Front.
Since the elected representative, and especially
the elected local executive don't have the time to
carry out their responsibilities, they delegate
enormously to their bureaucrats. All this has led to
the technocrats slowly replacing the elected
representative in terms of prestige, speech and power.
If perpetuated, slowly, the perceived need for the
elected politician will also be less. Too many
mandates kill the mandate!
Since 1985, a mandate to the French Parliament is
inconsistent with more than one of the following
functions: representative to the European Parliament,
regional councilor (or to Corsica), general councilor
(department, or of Paris), Mayor of a commune of more
than 20,000 inhabitants or adjoint to a mayor of a
commune with more than 100,000 inhabitants. This means
that a French Member of Parliament (MP) could
represent only one other major geographical region.
The laws of 1985 were a first step in limiting the
extent of accumulation by each person. However, as we
have seen, most politicians have still managed to
accumulate what they could. In fact, it is estimated
that merely 300 positions were released owing to this
law. Also, there was no clarity why certain things
were prohibited and not others. For example, why an MP
should be allowed to be a Mayor of a city of less than
20,000 inhabitants. Why should the position of
regional councilor be considered to clash with that of
department councilor but not with municipal councilor
What was proposed last year is that a French MP
should not be a representative to the EU parliament,
and in the regional and departmental assemblies, he
should not be the executive CEO. The bill therefore
proposed that the French MP could neither be President
of the Regional Council (including Corsica) or of the
General Council nor a Mayor. However, after all the
discussions in the two houses, the law that was
finally passed only retained the exclusion to the EU
Parliament. This means that French MPs can continue to
be Mayors. This is why Jack Lang, the new Minister for
Education, is trying to retain his position as Mayor
But even elected non-executive positions were
brought down to the limit of one other position. So,
as far as being a member of local Councils (Conseiller
Regional or Conseiller Général or Conseiller
Municipal) is considered, one membership would be
permitted, as at present. All references to population
size were taken out in the initial proposal, but
finally municipalities with a population of less than
3,500 inhabitants were excluded. This means that a
French MP can have three mandates if one of them is
Municipal Councilor to a city with less than 3500
A French MP who is elected to the European
Parliament would have to resign from the French seat.
This would discourage the practice of using famous
French politicians to head the EU election lists,
where, once the election is over, the leaders resign
from the EU parliament and let others take the place.
Now, the French MP would be warned that he would lose
his seat in the French Parliament if he obtains a seat
in the EU Parliament. In the case of a person becoming
a MP, if he already has two other local mandates, he
would have to abandon one explicitly, failing which
the most recent mandate would lapse.
What is shocking is that the legislation was
supposed to raise the pay of Mayors so that there
would be no need for people to be MPs and Mayors. This
would then help digest the proposed simultaneous
abolition of accumulating the local executive position
with a highly paid position of national MP. However,
the Parliament, specifically the Senate which has a
veto power over organic laws, insisted on letting the
MP keep one additional position. At the same time it
voted in the pay increase. What this means is that the
MPs have given themselves a nice pay-hike, because
half of them are Mayors, and most of the others have
at least one executive position. A French MP has a
basic salary of FF 30616 (1994 figures).
The following table indicates the increase in the
salaries of Mayors:
|Since 2000 law
||2 512 F
|500 to 999
||3 755 F
|1000 to 3499
||6 847 F
|3500 to 9999
||9 498 F
|10,000 to 19,999
||12 149 F
|20,000 to 49,999
||14 358 F
|50 000 to 99,999
||16 567 F
|100,000 to 200,000
||19 880 F
|> 200 000
||20 984 F
||25 100 F
||15% higher, 166.75
Source for columns two and three: in J.F.
Lachaume, L'administration communale, 2ème ed. LGDJ,
Column 4 from the new law, Column 5 assumes same
base of FF 22089: this would have gone up.
This advantage, contained in the organic law,
concerns only French MPs. In the ordinary law, which
the French MPs pass, but which governs the situation
of all others (European MPs, local representatives and
local executives), the French Parliament has retained
the distinction between functions and mandates. As a
result, a European deputy cannot be Mayor or President
of a Regional or General Council, and therefore cannot
have two remunerations! Similarly, two local executive
positions are incompatible. A French MP can therefore
have three mandates (one being that of a mayor of a
small town), but only two executive functions.
In short, through a complicated piece of legal
jugglery, and after months of political acting and
debates, the French MPs have not only voted in a
pay-hike for themselves, they have excluded all others
from this pay-hike. Admittedly, those who are elected
to just one function, the Mayors, benefit also.
According to Bernard Roman, the reporter to the
Assembly National for these two laws, this fait
accompli is the result of certain legal procedures.
Since the Senate did not pronounce on the Second Law
(the ordinary law), the Assembly had to vote it in
just as it had in the previous version, although the
Senate had modified the first law (the organic law)!
But there was a choice! The government could have
dropped both the laws and then restarted the whole
procedure, not being sure of an outcome with a
mischievous opposition in the Senate. Nevertheless,
the result of all this impotence is that MPs gain,
instead of sacrificing.
1. Bernard Roman: Reports to the National Assembly
No.909, No.2134 and No. 2234