Tax the CSD, the solution to the labor law? – The Obs

The subject discreetly invited to the debate on Bill Myriam El Khomri against which between 220,000 and 500,000 people took to the streets Wednesday, March 9th. “It is asked, what is on the table, this part of the social partners,” said Minister of Labour casually.

Is this the solution to the explosive issue of law job ? Taxation of CDD has been proposed by the unions there for years. She resurfaced every trading on unemployment insurance. The idea is regularly advanced to the National Assembly: “The taxation of CDD, I would say: finally!” breath Pierre Laurent, national secretary of the Communist Party. The amendments to the left have until recently been rejected by the Ministers of Labour and Economy. The government, which fears a new CPE, would he have the intention of making it a bargaining chip? Jean-Marie Le Guen, State Secretary for Relations with Parliament, innocently slipped Wednesday that the measure “was part of the discussions,” but said Thursday morning that nothing was decided.

A CFDT, one feels it coming. In parallel with the reform of labor law, employers and unions are preparing a new redesign of unemployment insurance, which they manage jointly. “If the government hopes to use this proposal to move the capping of severance payments to the Labour Court, the answer is no,” says clearly to “Obs” Véronique Descacq, number 2 of the CFDT. Why, indeed, give a measure scarecrow, while the taxation of CDD seems to be growing consensus?

A cornerstone of flexicurity

The taxation of CSD is one of the missing links of flexicurity to the French. Inspired by Scandinavian experiences, but now German, Spanish and Italian, that flexicurity is based, as the name suggests, on two principles:

• Flexibility , which through facilitation of the breach of contract of indefinite duration (CDI) and negotiations on working time and wages at the enterprise level. It is reflected in particular in the draft law by El Khomri a cap on severance payments to industrial tribunals and by relaxing in the law of the economic redundancy criteria.
• securing the route of employee of ensuring continuity of rights acquired by employees in companies (mutual, unemployment benefits, training) and to accompany the employee between contracts (via a reform of the public employment service). This component, already advanced in the act of securing the employment of Michel Sapin, deserves to be deepened in the draft law Khomri El

Read – & gt. Editorial: A labor reform to rework …

However, if employers actually do so by making greater use of CDI at CSD in times of economic recovery, it seems that we should also encourage them. Denmark has implemented a bonus-malus system based on the number of CSD. In Spain, the Rajoy government has reduced the share of employer social security contributions for IDUs. And in Italy, the “jobs act” of Matteo Renzi was accompanied by premium reductions.

In France, the government has already lowered the cost indiscriminately work for CDI and CDD via Pact responsibility. Differentiation could be done either through new cuts on CDI, either through higher taxation of CSD. “E n return for additional taxation, i s would be wise to reform the law of dismissal, to make the outcome more predictable,” summarizes the economist Marc Ferracci, near Emmanuel Macron in an interview to “Obs.” The latter option seems, indeed, more consistent with the level of deficits in social systems

Marc Ferracci. “The law does not weaken El Khomri CDI”

the concentrated precariousness

in practice, the implementation of a CDD-taxation is complicated. It has already been introduced in small doses in 2013: the employer contribution to unemployment insurance increased from 4% to 7% for contracts of less than three months. But with relative success. “She brings almost nothing,” Véronique Descacq plague the CFDT. And for good reason: were spared some of this overtaxation CDD (use replacement) and the interim. Which consequently, have increased.

Is it possible to do better? The low yields of this surcharge are related to the distribution of precarious employment in France. For if 87% of new hires in the year are short-term contracts, it is the number of contracts signed, not many people. In fact, nearly 90% of employees on permanent contracts. And if more and more of CDD or temporary contracts signed in France, it is because – almost – the same people sign more contracts often becoming shorter. Half of CSD are signed in the sectors can resort to use CSD, due to their specificity

How overtax

• First solution.?: extend taxation to more short contracts

the opportunity to overtax short contracts in professions such as hotels and restaurants is discussed.

“we can talk about the taxation of contracts” extra “- we are not closed to negotiations provided that it is among professionals – but not seasonal or for contracts exceeding 30 days,” explains Thierry Grégoire, delegate social Affairs of the Union of trades and hospitality industries, already risen against the government.

But by bidding the price of coffee or night in a double room, it does is not sure that extending the surcharge to trades by definition precarious pushes principals to hire on permanent contracts. See sector by sector.

• The alternative would be to increase the rate of the surcharge already implemented

It would be an incentive to hire on permanent contracts, a measure designed to blur the boundaries between precarious and sustainable employment. In other words, an attempt to meet the main objective of the labor law – at least as it has been recently redefined: fight against the duality of the labor market How effectively.? Only experience will tell how precarious contracts will be effectively converted into CDI.

It is unlikely however that such a measure has an impact on the short-term unemployment. As overtaxing rarely encourages hiring. Also, for the decline in unemployment will have to await the return of activity. Hoping that flexicurity to the French was well thought out.

Donald Hebert