Finding a job is an obstacle course for seniors over 50. To tackle unemployment among this segment of the population, A new proposal has been put on the table : Retirement penalty system.
But what does this actually entail? Will it be adopted? Answers in this article.
Seniors and low employment rates
The world of work evolves over time. But, for many years, many seniors have had difficulty accessing traditional job networks. They also face discrimination from businesses. This is because some companies target a very specific category. The digital sector, for example, leans more towards Generation Z. In respect of occupations requiring physical effort, Companies are concerned about sick leave for the elderly.
It is important to remember that the employment rate of seniors in France is around 57% compared to the European average of 62%. These figures are much lower than Germany with 73% and 77% for Sweden in 2023. In France, inactive seniors receive financial support from the government, which further accentuates dropout from the market.
Functioning and impact of bonus-malus system
As part of the fight against senior unemployment, MP Renaissance reverted to the bonus-malus system introduced in 2021 which has shown great effectiveness. As a reminder, The system includes penalizing companies that abuse short contracts. The principle is as follows: if the employer exceeds the authorized contract termination rate, he will be forced to pay higher unemployment insurance contributions. On the contrary, good students benefit from bonuses.
According to Mark Ferraci, the implementation of this system has paid off. While he initially thought that this measure was not enough, he eventually realized that it was indeed effective. Then, it also confirms that this has led to tangible results leading to clear changes in the behavior of companies and a reduction in attrition rates.
The Retirement Penalty: A Solution to Keeping Seniors Employed
It should be remembered that Bonus-malus system is implemented in some sectors. So concerned people have reduced the use of short contracts, unlike others who still abuse them. To remedy this situation, MP Renaissance has proposed the evolution of this system by charging companies with the cost generated by breach of contract.
A method that can Contribute to retaining seniors in employment by discouraging disengagement from older workers. By making companies understand the consequences of short contracts, they will be aware of the issues and therefore be able to encourage hiring of seniors.
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