France

Employer of Record in France

France has long been one of the most visited countries in the world, and its cultural influence is widely recognized. 

It is also known to be an advanced and industrialized country with a pro-business environment, a highly talented workforce, and a sophisticated financial market. 

All these factors have made this region one of the most attractive destinations for global business expansion.

Over the years, the French government has invested in its workforce training infrastructure. As a result, residents of this country have easy access to

• Free, robust educational system during childhood.
• High-quality government services, which also include job training opportunities.
• Low-cost higher education that fosters the development of in-depth industry knowledge.

However, despite these advantages, most businesses still face quite a few hurdles when hiring employees in France. 

One main reason is the fluid nature of employment laws such as the Labor Code. 

The past few decades have seen many law reforms and attempted reforms. Given the kaleidoscopic nature of these laws and the immense influence of labor and trade unions in France, it becomes very difficult to maintain compliance and avoid legal challenges unless you have a partner to help you maneuver through them.

This is where Skuad comes into play. 

Skuad’s France Employer of Record (EOR) solutions make business expansion to France easy and hassle-free. 

Our unique HR platform (including a built-in IP protection system, benefits administration, and more) allows companies to hire exceptionally talented employees in France without having to set up a separate legal entity. 

Try out Skuad’s employee cost calculator to get an overview of the employee hiring expenses in France.

Skuad streamlines hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. 

To learn more about Skuad, Book a demo today.

How to Hire Employees in France

In order to hire an employee in France, you can avail of any of the following methods.

• Hiring and managing employees in France directly.
• Hiring with an Employer of Record (EOR) in France.

Direct Hiring: Setting Up A Subsidiary

Opening a subsidiary in France is similar to most other European countries. Subsidiaries, wherever their parent companies might be based, are considered tax residents of France. Hence, they must have registered addresses in France to operate there. 

Additionally, you must open bank accounts in France separate from those of the parent company.

To open a subsidiary, the parent company is required to obtain the required documentation and permits from taxation and business authorities. 

You must obtain both tax numbers and value-added tax (VAT) numbers to operate as a subsidiary. Additionally, each subsidiary needs to have statutory documentation filed with the French Companies Register.

The hiring process all across the world is slowly inching toward standardization. Among companies looking to hire individual employees, there isn’t a significant difference in the hiring process across countries. 

LinkedIn and Indeed are popular employment search sites in France, as they are in several other countries. 

There are also a significant number of France-specific hiring websites, such as Apec, Cadremploi, Codeur, and Meteojob that offer a varied collection of available positions in France.

An HR team looking for an employee will first write a job description with the team with a vacancy or requirement. 

The company will put out the job description for candidates to access not only on the Careers page of their websites but also on the previously mentioned job websites.  Candidates can apply to these positions if they match the job description, requirements, and qualifications.

Next, the HR team reviews each application to evaluate the candidates' qualifications and fitness for the job. Candidates deemed suitable are invited to the first round of the hiring process. 

For senior positions, these will generally be interview rounds only, but for junior positions with many applicants, a written test may also be included.

The shortlisted candidates will undergo a thorough background check before the HR round, where the salary negotiation occurs if the interviewer feels the candidate is fit for employment. On successful completion of these rounds, the candidate is offered the position.

Hiring through the above-mentioned employment websites can be a simple task for many HR teams since these websites provide them access to a host of qualified, appropriate candidates. They do not need to carry out recruitment drives or step outside their office. 

All they have to do is advertise the position, and they are likely to receive several standout applications.

However, receiving more applications than the HR team can handle is the flip side of hiring through these platforms. 

In several applications, the candidates will be demonstrably unqualified for the job, and yet, the HR team will have to spend time sorting through their credentials.

Partnering with an Employer of Record Services in France

Partnering with an EOR company in France is among the most important business decisions you can make. The French labor law is incredibly detailed, and one wrong step can push your expansion back by many years. 

To understand French labor codes, you must spend significant time surveying laws or hire a team to do this for you exclusively. 

Collaborating with an EOR such as Skuad can be a more efficient way to expand since an EOR partner not only has expertise in local law associated with hiring and employment but can also carry out these tasks for you. 

Skuad offers the experience and resources to manage payroll, taxes, and employee records in France. 

Another advantage of having an EOR partner such as Skuad is that you save a vital amount of time, and potentially, economic resources. 

Relatively minor aspects of your expansion such as payroll management, tax management, and employee record management are handled by your EOR partner, and you can focus on more relevant activities associated with the expansion.

The EOR partner creates contracts that meet your needs and requirements and comply with local laws and regulations.

With an EOR partner such as Skuad, hiring and employee management becomes as easy a task as it can be. 

Contact us today to significantly ease your expansion in France.

‍‍‍Onboarding and Agreements

Employee onboarding is a crucial process through which new hires acquire the knowledge, skills, and behaviors needed to integrate into an organization. 

The first step in this employee onboarding process is to draft a formal employment agreement that will outline all the terms and conditions of the work, such as,

• The identity of both parties
• Details related to work time
• Paid leave
• Job title, task, or work category and 
• Provisions related to social security, among other necessary information.

Under the labor laws of France, employment contracts are not always mandatory to be in writing. 

Oral fixed-term employment contracts are automatically perceived as indefinite contracts, whereas oral part-time contracts are deemed full-time agreements.

However, in certain cases, such as fixed-term contracts, part-time contracts, or temporary agreements, the contract should be in writing. 

Furthermore, part-time contracts must be a minimum of 24 hours per week unless an exception is required. 

In addition to the details mentioned above, a fixed-term contract must also include the following information:

• The reason why the business is using a fixed-term contract
• The end date of the agreement/minimum duration in case the exact termination date has not been determined.
• If the fixed-term contract has been drafted to replace a temporarily absent employee, the worker's name and job description must be highlighted. 

However, the employee onboarding process simply does not end with drafting an employment agreement. 

It entails other crucial duties that can be categorized into two main types,

Taxes

Mentioned below is a detailed overview of both employee and employer France tax rates.

Employer Taxation

Employee Taxation

Bonuses

Discretionary bonuses are awarded to executives or employees who play a unique role in the company.

Bonuses may also be contractual and set out in a provision of the employee’s contract or a collective bargaining agreement. 

Many French employers use the 13th-month system, which must be specified in the contract. 

Typically, the 13th month’s salary is paid partly during the summer months and partly at the end of the year or the start of the next year.

Compliance

France was among the first countries to enact and codify labor laws centuries ago. Although labor laws in France have undergone considerable changes since then, they remain favorable to workers’ rights. 

Several provisions define the number of hours workers are supposed to spend in employment every week, the number of leaves they are entitled to, pensions, maternity leaves, and more.

Some Employment Laws to note before hiring in France are as follows:

Independent Contractors vs Full-Time Employees

France is among the countries that do not necessarily require a written contract for employment to be initiated. 

However, several employers choose to put employee contracts into writing. Most employment contracts in France have significant flexibility and allow the employee and employer to determine the terms of employment. 

France was among the first countries to transition to remote work. French companies and other companies based out of France allow remote work, and workers face no issues working remotely. 

This culture has been a part of various companies in France for quite some time, and therefore, it has been easy to adapt to the new normal created by the COVID-19 pandemic.

According to the French Labor Code, most contracts include:

• The length of the contract (unless the contract is for an indefinite period)
• The terms of employment
• Termination

The trial and notice periods, if any, and the total compensation for the period of employment will also be mentioned. 

These are not rigid regulations but generally apply to oral and written contracts.

Forming a contract in France, especially a written one, can be challenging if you are not acquainted with the local laws, regulations, and customs of employment. 

Skuad can help draft your contract template within the limits of the law. Get in touch to simplify expanding your business in France. 

Fines/Penalties for Worker Misclassification

When hiring employees, without the help of France EOR services, the chances of worker misclassification run significantly high. In the occurrence of such events, you will be charged with huge legal penalties and fines, such as the following:

• A maximum fine of EUR 45,000, alongside a maximum of three years of imprisonment. 
• 5%-40% tax penalties + 0.4% interest. Penalties may increase up to 80% in case of ‘fraud’ or ‘abuse of law.’
• 100% of social security + 5% late penalty and 0.2% monthly interest. An additional 25%- 40% penalty may also apply.
• 100% of pension amount + 5% late penalty and 0.2% monthly interest.

IP Protection 

The France Intellectual Property Code is the primary regulation that lays down all intellectual property rights and provisions guidelines. It includes,

In 2006, new provisions were introduced to the French IPC. They included the following,

• Certain copyright-protected works can be copied for personal use.
• Music performers and producers' copyrights were extended up to 70 years.
• Orphan works or works with unknown authors can be digitized and accessed by the public for general use.
• Performers have the right to cancel a copyright contract through the ‘use it or leave it’ provision.

Types of Visas in France

There are two main kinds of visas, as presented in the table below.

Applying for and securing a work visa is a key responsibility of EOR services. 

You can talk to Skuad to get assistance for your employees’ French visa requirements.

Work Permits

Foreign nationals who wish to be employed in France for more than three months are supposed to have a work permit. 

The employer applies for the work permit on their behalf. The work permit entitles them to further visa eligibility for up to 12 months, which can be extended in turn. 

The employer who requests work authorization needs to apply for the work permit so you may receive the permit.

An EOR can provide expert assistance and oversee the process of acquiring a work permit in France. Skuad’s experience in the field means that you can trust us to handle all the work permit formalities for your non-national employees in France.

Payroll

To set up a payroll system in France, you must be aware of all local laws and regulations governing this aspect of employment. 

Certain parts of the payroll are regulated by law in France, and it is important to recognize and follow them when creating the payroll. 

This is a principal reason EOR partners can be useful for your expansion efforts. 

Skuad’s unified employment platform has expertise in the development and management of payroll in France, which ensures organizations remain compliant with France's payroll regulations.

Payroll Details

Benefits and Compensation

French labor laws provide their employees with various perks and health benefits to ensure their well-being and financial security. 

The French healthcare system, ‘La Securite Sociale,’ is the primary body that provides health insurance and benefits to workers in this country. 

It is funded through taxes and contributions from both employers and employees.

The retirement system in France includes the following:

• State Pension: EUR 1,400 is the maximum monthly state pension for a full career. Additionally, the retirement age for full pension benefits usually ranges from 62-67, depending on the birth year.
  
• Complementary Pension: In some instances, a complementary pension may provide an additional 30%-40% of an employee’s final salary.
  
• Voluntary Savings Plan: The PER (Plan d’Epargne Retraite) is a well-known voluntary savings plan in France. Individuals can contribute up to 10% of their annual salary to the PER, with the annual contribution capped at EUR 32,419 for those aged 40 and under and a maximum of EUR 48,744 for those aged over 40.

Workers’ Rights

Apart from the health benefits and medical insurance in France discussed above, employees are also entitled to certain rights, such as,

Statutory Working Hours

In France, the maximum working week is 35 hours, and a single working day cannot be longer than 10 hours.

Rest Period

An employee cannot work for more than four and a half hours without a break.

Minimum Wage

The current minimum wage in France is EUR 1,766.92 per month.

Overtime

Overtime pay in France comprises: 

Hours 36-43: 25% extra

More than 43 hours: 50% extra

Probation Period

The maximum period for which an employee may be kept under probation is determined by law according to the employee’s category of work. Generally, the probation period is three months.

Anti-Discrimination Laws/Acts

The sources of discrimination laws in France are diverse. They comprise various regulations, such as European law, the French Constitution, and the French Labor Code.

Under the French Labor Code, it is prohibited to punish or dismiss employees or excuse potential employees from the recruitment process based on age, sex, sexual orientation, pregnancy, and marital status, among others.

Health and Safety

Part IV of the Labor Code enshrines the primary guidelines for occupational health and safety in France. It lays down a series of duties and responsibilities for employers that must be followed to ensure the safety and protection of workers' physical and mental health.

Remote & Hybrid Work

Complying with French labor laws or employees’ rights in France is undoubtedly an essential step in international hiring. 

However, implementing a robust remote readiness model in your organization is equally important. 

By remote readiness, we mean how well you and your employees can engage in remote & hybrid work. There are numerous factors that must be considered in this aspect. They include:

• Technology and Infrastructure

Since remote & hybrid work involves collaboration outside a traditional work environment, you need to have the proper technology and infrastructure to facilitate this process. 

This includes investing in effective communication and collaboration tools, having a reliable internet connection, getting suitable hardware such as mobile devices and laptops, and implementing robust cybersecurity measures.

• Training and Development

It is always advisable to train your existing employees and managers on some of the key components of remote & hybrid work, such as time management, digital literacy, and remote collaboration. 

• Feedback and Necessary Improvement

To further strengthen your organization's foundation of remote & hybrid readiness, remember to collect feedback from your existing employees about their experience. This will enable you to identify gaps (if any) and improve the process by taking the necessary actions. 

Salary

There are no standard salaries in France, and employees and employers determine individual salaries based on the application's merit. 

It can differ based on multiple factors, such as the experience level of the worker, the nature of work, the industry your business operates in, or even the location of work. 

Nonetheless, as of 2023, the average income in France for a full-time worker is estimated to be EUR 3,666 to EUR 44,000 per year. However, every employer must adhere to the minimum pay in France.

The salary structure in France is liberal and allows for various employee provisions. Some of these provisions are supposed to be part of the salary structure by law. 

The limits of these provisions are fixed and based on the salary that the employer and employee negotiate, as per the French Labor Code.

Tap into the latest salary trends and unlock robust compensation data with Skuad’s salary insights tool.

Leave Policy

Mentioned below we have highlighted some of the many statutory holidays in France. 

Maternity Leave 

Maternity leave in France is 16 weeks for the first two children and 26 weeks for the third. The maternity leave may start six weeks before the birth of the child.

Paternity Leave

Each employee in France is granted 25 days of paid paternity leave, followed by an additional four days of leave after childbirth.

Annual Paid Leave

Workers in France are entitled to two and a half days of annual leave for every month they work, totaling five weeks of leave every year. However, no more than 24 days of leave may be taken at a time.

Sick Leave

In France, sick leave may last up to six months, provided that the employee meets all the conditions of minimum work hours and salary criteria.

Public Holidays

Employees are entitled to certain public holidays in France. Several of these French holidays do not fall on a specific date in the year but rather on a specific day or week in a month. 

The France national holidays are as follows.

• New Year’s Day
• Good Friday
• Easter Monday
• Labor Day
• VE Day
• Ascension Day
• Whit Monday
• Bastille Day
• Assumption Day
• All Saints’ Day
• Armistice Day
• Christmas Day
• Boxing Day

Background Checks

When hiring in France, you must run proper background checks on prospective employees to ensure the security and safety of your workplace and employees. 

Some of the most common types of background checks that are permissible under the laws of France are:

Criminal Record Check

• No specific law currently prohibits employers from running a criminal background check on job applicants. 
• Under the French Labor Code, employers can ask job applicants or employees for personal information, but only when necessary. 
• The goal is to assess whether the person can handle the job’s responsibilities.

Education Verification Check

• An education verification check is performed to verify the accuracy of job applicants' claims about their academic qualifications. 
• This background check generally includes verifying the candidate’s graduate degrees, diplomas, or other certificates. 
• The employer may directly get in touch with the educational institution to verify the claims, for this purpose.

Financial History Check

• Last but not least, a financial history check means assessing a person’s credit history. The aim is to determine the financial responsibility of the said individual, which includes how they use credits, whether they are subject to civil judgments, or whether they have other financial liabilities.
• A financial history check is commonly performed when employing in France for job roles that involve handling money, such as accounting or finance.

Termination and Offboarding

When it comes to termination of employment, the French Labor Code has rigid regulations to protect workers from unemployment. There are two reasons why a company may terminate an employee. 

• Personal reasons include aspects concerning the conduct of the employee. If the employee has not been performing well at work, cannot perform assigned tasks, or indulges in misconduct, the company may terminate employment. 
• Economic reasons relate to the company's financial aspects, such as whether the business organization is facing economic difficulties or looking to introduce major technological changes.

Companies are supposed to make legitimate efforts to redeploy employees within the group in case they are looking to terminate employment at a mass level. The dismissal orders must be notified, and the labor authorities must be informed as soon as possible. 

A statutory notice period must be offered to employees, and unemployment benefits in some cases if offboarded during the probationary period.

The notice period is incumbent upon the total duration of employment.

If the company has more than 50 employees and wants to terminate 10 or more of them within 30 days, it must establish a job preservation plan, consult the workers' representatives, seek approval from the authorities, and notify the employees.

Skuad can handle organization-wide changes, such as terminations while adhering to the French government’s regulations.

Cultural Considerations

To hire employees efficiently, it is very important to learn about the cultural norms in France. 

For example, it is common to shake hands when greeting someone at the workplace. It is also customary to say goodbye to everyone when you are leaving.

Furthermore, French professionals place great importance on work-life balance. The general norm is that they work to live, not the other way around. 

Therefore, the people of this country value their free time a lot, and it is not uncommon for businesses to shut down their operations for several weeks during the summer months, especially during August.

In addition to this, punctuality is also greatly valued in the French work culture. Being late without appropriate reason is usually viewed as a lack of consideration for others; therefore, it is advisable to inform your team members beforehand, whenever possible.

Conclusion

Skuad’s extensive expertise in the laws and regulations associated with the French labor code can help you save additional effort, time, and money. Skuad’s France EOR will ensure the smooth handling of all employment, labor, and contract-related activities. 

Why wait to make your best business decision yet? Book a demo with Skuad today and kick-start your expansion in France.

FAQs

Q1) What is the employer of record in France?

Ans: In France, the EOR is a three-way agreement between you, the client company, the EOR organization acting as the legal employer, and your French employee. This EOR handles payroll, taxes, and social security system for your worker, allowing you to hire French talent without setting up a local entity.

Q2) Is EOR legal in France?

Ans: The concept of a traditional Employer of Record (EOR) isn't directly defined in French law. However, "portage salarial France" offers a similar solution. It's a legal framework allowing you to hire French talent without a local entity.  In this three-way agreement, a "portage salarial" organization acts as the legal employer, handling payroll, taxes, and social security contribution for your worker.

Q3) What is the EU employer of record?

Ans: An EU Employer of Record (EOR) acts as your legal employer in Europe, simplifying workforce management. They handle HR tasks like payroll, taxes, and legal compliance across borders. This lets you hire top European talent without setting up local entities in each country.

Q4) What is the employer of record for foreign employees?

Ans: Employer of Record acts as a bridge for companies seeking top international talent. They assume legal employer responsibilities for overseas workers, handling critical HR functions like payroll, tax administration, and benefits management. This lets you focus on talent acquisition without the burden of establishing a local legal entity.

Q5) What is an Employer of Record vs PEO?

Ans: An Employer of Record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) co-employs staff, sharing responsibilities with the client company, but typically requires the client to have an established business entity in the country.

Q6: What is the difference between a PEO and an EOR?

Ans: One of the main differences between a PEO and an employer of record in France is that the former mostly handles HR operations for businesses that already have an established entity in the foreign land. EOR services in France, on the other hand, employ workers on behalf of their clients’ companies without requiring them to set up an entity.

Q7: How much does an EOR cost in France?

Ans: There is usually no fixed cost of EOR services in France. It varies depending on multiple factors, such as the complexity of local regulations, the specific services required, and the number of employees.

Q8:  Can a US company employ someone in France?

Ans: Yes, US companies can employ individuals in France, as long as they adhere to all the country's related labor and tax regulations.