The limits of concurrent employment

While highly lucrative and cumulative for both employees and retirees, the self-employed status can prove risky for those receiving unemployment benefits. Here is what the law says…

Whether you are currently unemployed, facing potential job loss, or already operating as a self-employed entrepreneur—or about to be—be cautious. While this status offers great opportunities for anyone (including employees or retirees) looking to earn supplemental income during these lean times, for those on unemployment benefits, it is a different story altogether…

According to the new UNEDIC agreement of February 19, 2009, regarding unemployment benefits and its annexed general regulations, employees who have been involuntarily deprived of employment and meet the eligibility criteria for benefits may receive the jobseeker’s allowance (ARE) while engaging in occasional or reduced work. This is subject to the condition that the income from the retained or newly started activities does not exceed 70% of the monthly gross income earned prior to the reduction in work activity. Consequently, the jobseeker’s allowance may be combined with income from self-employment, including turnover generated from an auto-entrepreneur activity.

Employees who declare self-employed activity are considered business owners by Pôle Emploi.

While launching this self-employed business may be the former employee’s primary project, such an action is considered an abandonment of their job search and, consequently, they will no longer be eligible for unemployment benefits.

If the sole proprietorship remains a secondary activity and the former employee continues to seek employment in parallel, they may remain eligible for partial unemployment benefits. The benefit amount will be adjusted downward in proportion to the income generated by the sole proprietorship—specifically, the turnover after the standard deduction for business expenses (i.e., 71% of turnover for purchasing/resale, catering, and accommodation services; 50% of turnover for other activities classified as industrial and commercial profits; and 34% of turnover for self-employed professionals taxed under the non-commercial profits category).

The calculation is performed as follows: the revenue generated by the sole proprietorship activity is deducted from the reintegration allowance. The monthly revenue (after professional expense deductions) is divided by the daily flat-rate wage used by Pôle Emploi to calculate unemployment benefits. The resulting figure represents the number of non-compensable days/months.

While self-employed individuals receiving unemployment benefits cannot predict their upcoming monthly revenue—as is generally the case—Pôle Emploi applies an upfront monthly flat-rate deduction (before performing a year-end reconciliation). This flat rate is €566.75/month for the first year and €850.17/month for the second year (figures based on 2009 data).

If you are currently unemployed but your self-employed business is your primary professional focus, you may be eligible for support and assistance such as’ACCRE (Support for Unemployed Entrepreneurs and Business Takeovers) or nacre (New Support Program for Business Creation and Acquisition) .

More on the web:

• The official portal for self-employed entrepreneurs
• The ultimate portal for solo entrepreneur success
• Union of Self-Employed Professionals
• Ministry of the Economy, Industry and Employment