Economic transition and innovation

Unemployment benefits for cross-border workers – Unédic report

October 2024

Each year, the compensation system for cross-border workers represents an additional cost of around 800 M€ for the French unemployment insurance scheme. Unemployment insurance is not designed to pay out annuities”, warns Jean-Eudes Tesson, President of Unédic. The organization that manages French unemployment insurance is calling for a renegotiation of agreements with neighbouring countries.

In its latest report, published in October, Unédic takes stock of this compensation system and the profile of beneficiaries. It states that “since 2011, the bill has amounted to… 9 billion euros”. In 2023, 77,000 people were receiving unemployment benefits in France with a “cross-border” status. That’s 50% more than in 2011.

“It’s not good for employment, because French companies on the border can’t find workers. And it’s not good for local residents, because the presence of cross-border workers, who have greater purchasing power even when unemployed, increases the cost of living and property prices, particularly in Haute-Savoie,” adds the president of the unemployment insurance management body. Source: “Indemnisation chômage des travailleurs frontaliers : le ‘ ras-le-bol ’ de l’Unédic”, DNA, 03/10/2024

Cross-border workers on the French border

A cross-border worker is “a person who carries out his or her professional activity in a State other than his or her State of residence, to which he or she returns in principle every day or at least once a week”: cross-border workers mainly work in Switzerland (48%), Luxembourg (22%), and to a lesser extent in Germany (11%), Belgium (10%) or Monaco (7%). Very few go to Spain (1%) and Italy (<1%), says the report. Their numbers will rise steadily between 2006 and 2020: 445,000 in France in 2020, compared to 353,000 in 2011. The report goes on to say that this increase is mainly due to the proximity of economically more attractive countries: “the average wage per capita is higher in border countries, particularly Switzerland and Luxembourg. What’s more, in the 4 main border countries, the unemployment rate is much lower than in France (7.3% annual average): 3% in Germany, 4.1% in Switzerland, 5.2% in Luxembourg and 5.5% in Belgium”.

In practice, partial reimbursements

“Before 2010, there were no reimbursements between member countries of the European Economic Area (EEA). Since May 1st, 2010, in application of Regulation (EC) no. 883/2004, the border state reimburses unemployment benefits to the state of residence for up to 3 months. This reimbursement period can be extended to 5 months if the cross-border worker has worked in the border state for more than 12 months in the last 24 months.

Since April 1st, 2012, Switzerland has applied the reimbursement rules set out in Regulation (EC) no. 883/2004, even though it is not part of the EU. In practice, the length of time cross-border workers residing in France receive benefits far exceeds the maximum 5 months reimbursed by the country of employment. Every year, this results in additional costs for Unédic.

i.e. a significant difference between benefit expenditures and reimbursements, which are lower (see Part 4)12. A plan to revise European regulation 883/2004 on the coordination of social security systems and its implementing regulation has not yet been completed. Extract from the Report, page 6.