French Employers, Unions Agree to Tighten Jobless Benefit Rules

French employer groups and three unions agreed to stricter rules for claiming unemployment benefits as part of President Francois Hollande’s effort to reduce the budget deficit and joblessness.

Employees’ rights to benefits won’t be reduced if they accept a new job, boosting incentives to work, according to the terms of the agreement, which the Medef lobby published today. Employees who receive large severance packages will have to wait 180 days before receiving public benefits instead of 75.

The package will save about 400 million euros ($552 million) annually, though it will still leave the system running a deficit, according to Agence France-Presse. The employers and unions agreed to meet again in six months to seek further savings.

“This first step is a signal of goodwill that encourages us,” Medef, France’s biggest business lobby, said today in an e-mailed statement. The agreement was reached “despite significant differences,” Medef said.

The changes agreed today won’t increase social charges levied on employers. Actors and musicians, who receive some of the most generous benefits, will see payouts capped and contributions to the system increased.

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