Under the current rules, anyone under the age of 53 can claim a maximum two years of compensation after losing their job, while the over-55s are eligible for three years.
By reducing the time by a quarter from February 2023, Labour Minister Olivier Dussopt said Monday he hoped that 100,000 150,000 people would return to the labour market earlier than expected next year.
“We’re keeping one of the most generous systems in Europe,” he added in a comment designed to reassure workers worried about their rights being eroded.
The new regime was made possible by a law passed by parliament last week that gave the government powers to change the unemployment system by decree, depending on the state of the labour market.
The idea proposed by President Emmanuel Macron is that benefits would be available for longer during economic downturns and restricted during times of labour shortages.
Despite high inflation and the impact of the war in Ukraine, France’s unemployment rate has fallen steadily to 7.3 percent amid complaints from many employers that they are unable to find people willing to fill vacancies.
The head of the Medef business association, Hubert Mongon, hailed the change as “going in the right direction” in encouraging people back to work.
All of France’s trade unions have opposed the changes, which are part of centrist President Emmanuel Macron’s pro-business agenda designed to reduce the country’s chronic high unemployment and high levels of public spending.
Macron made reaching full employment — which would mean bringing the unemployment rate down to around 5.0 percent — one of the pledges of his successful bid for a second term in presidential elections in May.
The unemployment system changes drew support from the rightwing Republicans opposition party which helped pass the legislation last week, a rare moment of compromise in the divided and hung National Assembly.
Macron has been under pressure to give impetus to his second term, which was severely undermined when his allies failed to win a majority in parliamentary elections in June that saw major gains for the far-right and hard-left.
The previously supportive centre-right Le Point magazine questioned this week if Macron was a “Zombie President” in a front page article.