The French government plans to reduce maximum daily allowances for employees taking leave due to workplace accidents or occupational illnesses starting on 1 November 2026, trade union sources said on Friday 28 August.
A draft decree prepared by the Ministry of Labour will lower the payout ceiling from three times the national minimum wage down to 1.8 times the minimum wage. The measure is designed to generate approximately 270 million euros in savings in 2027 as part of efforts to balance public social accounts.
Trade union representatives confirmed the upcoming decree after reviewing a letter sent to social partners earlier in the week, confirming an initial report by the French financial newspaper Les Échos. In France, daily allowances are government-funded payments provided to replace lost earnings when an employee is temporarily unable to work.
Statutory compensation ceilings in the country are indexed to the Smic, France's legally mandated minimum wage. The Ministry of Labour estimates that the lower cap will affect 14 percent of sick leaves granted for workplace injuries or occupational illnesses, representing 28 percent of total expenditure in that category.
Impact on employers and temporary workers
Under the French Labour Code, employers must pay a supplementary allowance to injured workers who have at least one year of seniority. Ministry officials expect this employer top-up to compensate for the reduced state ceiling in most cases, which the government argues will make companies more accountable for preventing workplace accidents.
Trade unions warned that the change could harm vulnerable staff who do not qualify for employer top-ups. Denis Gravouil of the General Confederation of Labour (CGT) warned that reducing the ceiling to 1.8 times the minimum wage risks leaving some workers with only state compensation and no supplementary provident insurance, noting that temporary employees are particularly exposed.
The CGT is one of France's largest trade union confederations. The proposed reduction targets the workplace accidents and occupational diseases branch of French Social Security, known as AT-MP. The branch provides medical coverage and income support for job-related health conditions and has been in deficit since 2025.
Taxation changes and business reactions
Government plans to curb spending follow a request made in mid-June for trade unions and employer groups to identify 800 million euros in savings for the AT-MP branch. Alongside the decree, the government intends to introduce full taxation of AT-MP daily allowances through the upcoming Social Security financing bill, an annual legislative package that sets revenue and spending targets for public welfare funds.
Daily allowances for work accidents are currently taxed at 50 percent. Subjecting the payments to 100 percent taxation is projected to yield an additional 285 million euros in savings in 2027.
The announcements have drawn criticism from employer federations and advocacy groups. Eric Chevée of Entrepreneurs, an employer association formerly known as the CPME that represents small and medium-sized businesses, described the decisions as somewhat hasty and asked for confirmation that the AT-MP fund itself would directly benefit from the savings.
The National Federation of Injured and Disabled Workers (Fnath), an organization advocating for victims of workplace accidents, previously criticized fiscal cuts to the sector. In a statement published in late July, Fnath said it was scandalous that people who lost their health working were being sacrificed on the altar of budget austerity.
