Freelance and Digital Nomad

What are your unemployment rights as a Freelance or a self-employed?

Freelance and unemployment, now that’s a huge topic! Freelance workers often wonder about their unemployment rights when they want to start their business.

And once you are a freelancer, what happens in case of a drop in activity, or even the liquidation of the company? Do we have the right to compensation?

This article answers all your questions concerning the status of freelance worker and unemployment!

Become a freelancer during your unemployment period

Being unemployed is sometimes an opportunity to start your own business! When you lose your job and you have a specific skill to sell, becoming a freelancer seems like an ideal solution.

Especially since it is possible to cumulate its allowances with the creation of its company. What removes the financial weight that can represent the launching of an activity…

At least you won’t have to stress if you don’t generate income right away. On the contrary, you have time to think about the viability of your project, develop your offers, sharpen your communication strategy and start prospecting.

Let’s see together the criteria to become self-employed during unemployment…

The statutes that authorize the combination of unemployment and entrepreneurship

Unemployment insurance encourages the resumption of an activity following the loss of a job. Even if this activity is non-salaried! So, no matter what legal status you choose (micro-business, sole proprietorship, SASU…), you can combine unemployment and freelancing.

The objective is to guarantee a monthly income equivalent to your previous salary, even if you start your own business.

The amount of unemployment benefits

Amount of unemployment benefits

No surprise, whether you start an activity or not, the amount of your benefits remains the same! And if you generate income while your unemployment benefits are still running, they are indexed to your earnings.

This indexation consists of subtracting 70% of the income from your self-employed activity from your unemployment benefits.

For example, let’s imagine that you are currently receiving €1,200 in unemployment benefits. After a few weeks, your activity allows you to earn 600€ of income per month. Pôle Emploi will make this calculation:

1 200 – (70% x 600) = 780€

You will then receive 780€ of unemployment benefit, in addition to your 600€ of non-salaried income.

Receive your unemployment benefits in advance (ARCE)

Did you know that it is possible to receive 45% of your unemployment benefits when you start your business?

Indeed, some activities require an important investment in terms of hardware or software. Rather than taking out a bank loan (with interest…) or dipping into your savings (always useful to keep a safety net), you can ask for 45% of your unemployment benefits.

The ARCE (Aide à la Reprise ou à la Création d’Entreprise) is paid in 2 installments:

  • The first payment is made as soon as you have met the conditions for receiving the aid.
  • The second payment is made 6 months later, provided you are still working.

Good to know: the ARCE is attributed at the opening of the rights and cannot be cumulated with the unemployment benefits. Be sure to think carefully before applying for it and to make your choice according to the nature of your activity and your financial capacities.

What are the unemployment rights of self-employed workers?

Another essential question: what about unemployment rights when you are already self-employed? Recently, there is an allowance called “Allocation des Travailleurs Indépendants (ATI)” which allows freelancers to receive an indemnity in case they stop working.

The conditions for obtaining the ATI

A self-employed person may claim SEA, regardless of the legal form of his or her business, provided he or she meets these criteria:

  • Be self-employed for at least 2 years in the same business.
  • The cessation of activity must be the result of a liquidation or judicial recovery.
  • Be registered with Pôle emploi and actively seek a new job.
  • Have generated at least 10,000 € of income per year over the last 2 years of activity (in the case of the micro-enterprise, the 10,000€ must correspond to the turnover after the tax allowance).
  • Have personal resources lower than the amount of the RSA.

Please note that a partner, sole manager or salaried executive cannot claim ATI. If you are an employee of your company, the “classic” unemployment benefit applies.

The amount of the ATI

The amount of ATI varies according to the income generated during your self-employment. It is calculated on the basis of the last two calendar years before you stopped working.

In all cases, the allowance cannot be less than 600€/month (i.e. 19.73€/day) nor more than 800€/month (26.30€/day).

You can use the simulator proposed by Pôle Emploi to know the amount of your ATI.

The duration of the ATI payment

The payment of this unemployment benefit for freelancers starts from the day you register with Pôle emploi. It is paid from the first month, without any deferment or waiting period, for a maximum of 6 months.

Portage salarial and unemployment, a winning duo

Portage salariale and unemployment

Do you want to secure your future? The portage salarial is a solution to be studied in order to benefit from numerous social advantages, including unemployment rights, while enjoying your entrepreneurial freedom.

The concept of freelance administration

We have already dedicated several articles to freelance administration, its functioning and its benefits for the freelancer.

In summary: when you sign a freelance administration contract, you become an employee. You keep your freedom as a freelancer, because you define your offers, you canvass, you negotiate contracts and you work in your own way.

However, at the time of signing the service contract, it is the freelance administration company that intervenes. The company deducts management fees, but also all the social contributions (including unemployment contributions) before paying you a salary.

As a result, you are still a freelancer, but you benefit from the same unemployment benefits as employees.

Also read: How does freelance administration work?

What are the conditions for entitlement to unemployment benefits for a freelance worker?

The freelance administration company fulfills all the obligations of an employer. It pays the social contributions, including those concerning unemployment to the URSSAF. This allows the employee to contribute and to receive this insurance in case of decrease or stop of activity.

However, to receive unemployment benefits, the freelancer must have worked :

  • At least 88 days (4 months cumulative).
  • Or 610 hours during the 28 months prior to the end of their last service or the termination of their contract. For self-employed porters over age 53, the duration increases to 36 months.

In addition, the activity of the ported employee must necessarily correspond to the criteria set out in Order No. 2015-380 of April 2, 2015 on the portage salarial:

  • The missions of the ported freelancer concern services for companies.
  • The freelance administration company is up to date with the tax and social security contributions of the self-employed worker.
  • If the freelancer is on a fixed-term contract, it must not exceed 18 months (including renewals).

To claim unemployment benefits, the freelancer must register with Pôle Emploi and provide a certificate from the freelance administration company. This document will serve as proof of the hours or days worked before the last mission.

Also read: Portage salarial VS Freelance: what to choose?

The calculation of unemployment benefits for a freelance worker in portage salariale

Pôle Emploi uses the gross income of the last 12 months to determine the reference salary of the freelance worker. This remuneration is then divided by the number of days worked to determine the Salaire Journalier de Référence (SJR).

The elements that enter into the calculation of the remuneration are :

  • The gross fixed monthly salary.
  • The variable part of the salary (commissions), if any.
  • Any overtime (260 hours per year maximum).
  • Bonuses.

As for the calculation itself, Pôle Emploi uses two formulas and favors the one that gives the most advantageous result:

  • 57% of the RLS
  • 40,4% of the RLS + a fixed amount of 12,12

Good to know: whatever the result, the daily allowance will be, at least, 29.38€. Conversely, it cannot exceed 75% of the RLS.

As of 1er January 2021, there is a sliding scale system regarding the unemployment benefit for freelancers ported :

  • If the daily allowance paid is between 84.33€ and 120.47€, it is automatically capped at 84.33€ from the 7th month.
  • If the daily allowance is higher than 120.47€, a 30% reduction is applied from the 7th month.

Our tip

Freelancing and unemployment are compatible. The benefits vary according to the status you choose, your situation and your previous income.

If you have created a micro-business, EI, EURL… or any other legal form where you are a self-employed person, you can opt for a TNS unemployment insurance contract. This will enable you to supplement the ATI in the event of a drop in or loss of income following a slowdown or cessation of your activity.

You can maintain your level of income over the medium term. The duration and benefits depend on the contract you have taken out. Moreover, some provident contracts are eligible for the Madelin Law. This means that you can deduct part of the contributions from your expenses.

And don’t forget that to ensure a regular income, you need regular assignments. You can register on Coder and apply for many jobs every day!

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