France Raises Mutual-Termination Levy to 40%, Cuts Jobless Benefits by Up to 6.5 Months
Updated
Updated · globalworkplaceinsider.com · Jun 16
France Raises Mutual-Termination Levy to 40%, Cuts Jobless Benefits by Up to 6.5 Months
1 articles · Updated · globalworkplaceinsider.com · Jun 16
Summary
From Jan. 1, 2026, France lifted the employer social contribution on mutual-termination indemnities to 40% from 30%, making negotiated exits more expensive for companies.
From Sept. 1, 2026, workers leaving under those agreements will get shorter unemployment coverage: 15 months instead of 18 for under-55s, and 20.5 months instead of up to 27 for older employees.
The government is targeting a channel used in more than 500,000 cases in 2024 that accounted for 26% of unemployment-benefit and related public-spending costs.
The overhaul aims to curb perceived misuse and push faster returns to work, though the mechanism may remain attractive because it is simpler and more flexible than dismissal or resignation.
A key risk is that employees seek higher severance to offset lost benefits, testing whether employers still prefer negotiated exits despite the higher cost.