Three numbers show the need for a deep reform of vocational training in France: the current unemployment rate is at 9.5%; one-fifth of French people of working age have a limited understanding of simple texts or elementary mathematical notions. Yet at the same time, 35 billion euros is spent every year on vocational training. For years, successive governments have called for the need to reform the system. On March 5, the Ministry of Labor presented the main axis of the envisioned reform; some of the provisions will have a direct impact on employers and employees, including how training entitlement is calculated.
The current vocational training comprises two separate components. The first component is an annual training plan to be established by the employer and discussed with the employees’ representatives. Its purpose is to train employees, internally or externally, so that they maintain or acquire the skills their jobs require. The training sessions are paid for by the employer and are mandatory for the employees.
The second component is the Personal Training Account (Compte Personnel de Formation), which belongs to each employee and follows the employee during his or her career wherever he or she works and even when unemployed.
Employees are currently entitled to 24 hours of training per year until they have acquired 120 hours, and then 12 hours per year thereafter within a limit of 150 hours. For employees who have no qualification, the entitlement is 48 hours per year with a ceiling of 400 hours.
Vocational training is financed by employer contributions (1.23% of the total payroll for companies with fewer than 11 employees and 1.68% for companies with 11 employees or more) and the total amounts are collected by entities managed by employer and employee trade unions at the level of each professional branch of activity (organismes paritaires collecteurs agréés or OPCA). The OPCA also select the training companies.
This system has been subject to criticism for years, including for a lack of transparency, a mismatch between the needs of the employees and the training offered, and the poor quality of the training programs.
As the government had clearly indicated its intention to review the whole system, the social partners discussed and came to an agreement on February 22, requiring the government to transcribe it into law. The government built on this agreement . . . but went beyond its provisions in the Ministry of Labor’s proposed reform announced March 5.
Monetize the Personal Training Account
One of the main aspects of the envisioned reform concerns the Personal Training Account. While it was previously calculated by number of hours, in the future it will be calculated in euros. In other words, an employee will have an allowance of 500 euros per year to be used toward training programs, with a ceiling of 5,000 euros after 10 years. An employee without qualification will have a credit of 800 euros per year for a maximum of 8,000 euros after 10 years.
This is a real change in approach—as employees will no longer be entitled to 24 hours to use every year, but to 500 euros, that change in entitlement could correspond to more or fewer hours of training per year.
Facilitate access to training
To facilitate access to training, a mobile app would be made available to each employee and unemployed individual to check his or her training allowance in euros; find training programs; compare the cost of similar training programs offered; choose training programs, taking into account observations and comments made by persons already trained; and register for training programs.
Simplify the contents of the annual training plan
Drafting the annual training plan was a source of constraints and complexity for employers as they were asked to split the trainings among actions to adapt the employees to their jobs, enhance the employees’ job evolution, or develop the employees’ skills and qualifications. Going forward, all of these categories should be eliminated and employers will only have to prepare plans to adapt employees to their jobs and offer them training to increase their skills.
Change the financing and collection of vocational training contributions
The employers’ contribution rate should not change even though a percentage of it will be used to help small companies offer training programs to their employees. Interestingly, the contribution will not be collected by the OPCA anymore and employers will not have to address any administrative formalities in that respect.
The contributions will now be collected by the URSSAF (social security authorities), which already receives most of the social security contributions paid on salaries. That should simplify the financing of vocational trainings and also offer more transparency on the collection and use of the contributions.
Reform of governance
The OPCA will be replaced by new entities based on economic sectors to anticipate the evolution of trades and jobs. At the national level, a new agency will gather the states, social partners, and regions. This agency will also be in charge of selecting the training companies and ensuring the quality of their programs.
The government aims to implement this reform in 2020. Next steps include discussions with employer and employee trade unions (which are (almost) all against the reform—probably because it will lead to a reduction of their competencies and financial resources), and a bill including the reform of the unemployment system, apprenticeship, and vocational training will be presented before Parliament this spring. Even though there will likely be changes in the final measures, nevertheless it seems to be commonly accepted that the current vocational training does not answer the needs of employers and employees, and has contributed to the high rate of unemployment. Therefore, any changes to the proposed reform should be limited and in keeping with its overall philosophy.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the author, Sabine Smith-Vidal.