The new unemployment insurance reform, adopted on 17 November by the Danish Parliament
was elaborated on Monday to the social partners. This bill gives the government the opportunity to change certain rules in accordance with the labor market situation“green” or “red”, by decree.
Compensation duration reduced by 25% from 1 February
From 1 February 2023 is the duration of the compensation of the unemployed who register for Pole emploi will be modulated based on unemployment. Two cases will be possible.
• If the unemployment rate is below 9% or if it has been falling for three consecutive quarters and does not experience an increase of more than 0.8 points: the context will be “green” and the duration of the compensation will be reduced by 25% with a minimum floor of six months, the unions said after a meeting of the Ministry of Labor where they criticized a reform “completely unacceptable”. It is clear that the amount of the allowance does not change, but it is paid for a shorter period.
For example, an unemployed person who is entitled to 12 months’ compensation in the current system will only be entitled to 9 months. A senior entitled to 36 months loses 9.
• If unemployment exceeds 9% or rises by 0.8 points over a quarter : the context will be “red” and the compensation duration will return to the current level. Today, this duration is calculated according to the following principle: one working day, one compensated day, with a maximum of 24 months for people under 53, 30 months for people aged 53-54 and 36 months for people 55 and over.
The first effects of the reform are expected from 1 August.
The government has provided a few exceptions: the overseas territories will not be affected by this modulation, neither the entertainment workers, the fishermen, the dock workers nor the expatriates.
No changes to membership conditions
The conditions for connection to the social security fund system – to have worked six months over a reference period of 24 months to be eligible – does not change, however. Same for compensation level.
Employers’ satisfaction, unions’ anger
The government, which has set itself the goal of full employment, i.e. to bring unemployment down to 5%, hopes to fulfill difficulties in recruiting companies with this reform. The Labor Minister, Olivier Dussopt, aims “100,000 to 150,000 return to employment” further in 2023.”We want to keep one of the most generous systems in Europe”, he defended at a press conference.
The employers’ organizations welcome the implementation of the reform, which meets their request. The trade unions, on the other hand, say they are outraged. “Everyone is seeing their rights decline,” wrote Michel Beaugas (FO) after a final meeting in the Ministry of Labour. Seniors “will pay the most”from 36 months to 27, Denis Gravouil (CGT) insisted, fearing they would switch to the RSA.