A subsidized contract is an employment contract for which the State covers part of the remuneration paid by the employer, in exchange for hiring a person distanced from the labor market. In 2024, active measures focus on three main mechanisms, with a notable phase-out: that of the “emplois francs.” Understanding these contracts requires distinguishing their legal basis, target audiences, and the obligations placed on the employer.
CUI-CAE and CUI-CIE: the legal basis of subsidized contracts
The unique insertion contract (CUI) forms the regulatory foundation for most subsidized contracts. It comes in two versions depending on the employer’s sector of activity.
The CUI-CAE (employment support contract) is aimed at the non-market sector: associations, local authorities, public institutions. The CUI-CIE (employment initiative contract) pertains to the market sector, that is, private companies. In both cases, financial assistance takes the form of a monthly allowance paid to the employer, calculated as a percentage of the gross minimum wage (SMIC).
To access all about subsidized contracts in 2024, employers and candidates must go through France Travail (formerly Pôle emploi), which prescribes the contract after reviewing the job seeker’s profile. The exact amount of assistance varies by region and the profile of the recruited employee, potentially covering a very significant portion of the salary cost.
The CUI-CIE remains little used outside overseas departments and regions, where it retains a broader application. In mainland France, the flagship measure remains the employment skills pathway.
Employment skills pathway (PEC): conditions and training obligations
The employment skills pathway has been the operational form of the CUI-CAE since 2018. It is not a distinct contract legally, but a strengthened framework that imposes three cumulative conditions on the employer:
- A position allowing the employee to develop transferable skills, not just repetitive execution tasks.
- Support from a designated tutor within the organization, responsible for monitoring the employee’s progress.
- Access to professional training during the contract period, whether through internal or certifying training.
This triple requirement distinguishes the PEC from a simple subsidized contract. The stated goal is to promote sustainable integration after the contract ends, not just to occupy a temporary position at a lower cost.
The profiles targeted by the prescribers of France Travail are long-term job seekers, people with disabilities, seniors, and residents of priority neighborhoods. The duration of the PEC generally varies from nine to twelve months, renewable under certain conditions.
End of “emplois francs” on December 31, 2024
The “emplois francs” scheme has constituted a specific aid for hiring residents of priority neighborhoods for urban policy (QPV) for several years. In 2024, this scheme will come to an end.
Contracts signed until December 31, 2024, remain eligible. Affected employers can submit their aid requests until January 31, 2025, for the last contracts concluded in December. Assistance continues to be paid for two to three years for contracts already active.
However, no new “emploi franc” can be concluded from January 1, 2025. This phase-out changes the range of tools available for employers hiring in QPV, directing them towards the PEC or other integration mechanisms.
Zero long-term unemployed territories: the alternative to traditional subsidized contracts
Alongside traditional subsidized contracts, the experimental scheme Zero long-term unemployed territories (TZCLD) continues to expand. In 2024, it covers 75 territories in France.
The principle differs radically from the CUI or PEC. Instead of subsidizing an existing employer, the scheme creates “employment-focused enterprises” (EBE) that offer permanent positions to willing long-term unemployed individuals. The activities developed by these EBEs address local needs not covered by the market: recycling, maintenance of green spaces, solidarity concierge services.
The TZCLD does not replace subsidized contracts in the strict sense, but complements the range of integration solutions. For individuals unemployed for more than a year and residing in a covered territory, it represents a direct pathway to a permanent contract without going through a fixed-term contract.
Subsidized contracts or TZCLD: two distinct logics
Subsidized contracts rely on a temporary financial incentive directed at an employer. The TZCLD is based on creating an economic activity tailored to the skills available in a territory. The two schemes do not target the same profiles or the same durations of support.
The choice between these schemes depends on the job seeker’s territory of residence and individual situation. The prescribers of France Travail direct individuals towards one or the other based on geographical coverage and the diagnosis of distance from employment.
The elimination of “emplois francs” at the end of 2024, combined with the expansion of TZCLD, is gradually reshaping the landscape of employment integration. Employers in the non-market sector remain the primary users of subsidized contracts via the PEC, while territories covered by the TZCLD offer a structurally different alternative for those most distanced from the labor market.
