Globalization Partners provides a PEO and employer of record service in France for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary. Your candidate...
Globalization Partners provides a PEO and employer of record service in France for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary. Your candidate is hired via Globalization Partners' France PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Globalization Partners provides a PEO and employer of record service in France for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary. Your candidate is hired via Globalization Partners’ France PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our solution enables customers to run payroll in France while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in France.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. Globalization Partners allows you to harness the talent of the brightest people in more than 187 countries around the world, quickly and painlessly.
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Hiring in France
If you’re our customer, the work falls on our shoulders, but if not, make sure that you follow ALL best practices when hiring in France. Invest in an air-tight employment contract, which should be in French and tailored to the employee circumstances at hand. Keep track of vacation time and ensure that annual leave days accrued are on each month’s pay slip. Keep employee pay slips, and all documentation, in strict accordance with HR rules & regulations. France is very litigious; this is not a place to skimp on legal fees at the outset, lest you pay for it later in severance fees!
France has a strong trade union culture. A Collective Bargaining Agreement (CBA) is a written agreement entered into between one or more trade unions representing employees, or one or more trade unions representing employers in a specific sector. The CBA typically governs individual and collective labour relations, working conditions, employee benefits, etc.
Wages should be clearly outlined within the employment agreement, and if a 13th month salary bonus is to be paid or is mandatory as part of the CBA, this must also be stated within the employment contract.
When negotiating terms of an employment contract and offer letter with an employee in France, it may be useful to keep the following in mind:
Employment Contracts in France
It is legally required to put a strong employment contract in place in France, in French, which spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in France should always state the salary and any compensation amounts in Euro rather than a foreign currency. The employment contract template is part of the service with Globalization Partners; no need to draft a separate template if you use our employer of record and PEO service in France.
Working Hours in France
The length of the work week in France is typically 35 hours. Legally, employees must not work more than an average of 44 hours per week over a period of 12 consecutive weeks, and the workday may not exceed 10 hours or 48 hours during any given week unless agreed to under a CBA.
When employees are eligible for overtime, payment (or rest time in lieu) must be made with the following pay increases:
+25% an hour for each of the first eight hours of overtime (from the 36th to the 43rd hour worked in the week)
+50% for each hour after that (from the 44th hour worked in the week)
However, it should be noted that many exceptions are allowed, especially under CBAs. Some managerial staff, for example, classified as “autonome” (i.e. autonomous – free to organize their schedule and workload) work more than 35 hours a week, are not eligible for overtime payment but are given additional holiday days off, called RTT days.
Holidays in France
Only Labor Day/1st May Day is an absolutely compulsory public holiday, but in practice, all the holidays (10 days) are given to employees. The remainder of the holidays are granted by convention (collective agreement between employers’ and employees’ unions) or by agreement of the employer.
The people of France celebrate 11 national public holidays, including:
New Year’s Day
Easter Monday
Labour Day/ 1st May Day
WWII Victory Day
Ascension Day
Whit Monday
Bastille Day
Assumption of Mary
All Saint’s Day
Armistice Day
Christmas Day
Vacation Days in France
All employees have a right to paid leave. Employees are entitled to 5 weeks of paid leave per year. This is prorated according to days worked.
Some CBAs and companies have negotiated agreements for working more than the standard 35h week. In that case, the agreement will compensate the overtime with “reduction of working time” or RTT days, which can anything between none (for 35h schedule) and 2 RTT days per month, depending on each company’s worktime agreement. The RTT days are calculated by taking the working days in the year and subtracting the contracted days. There is no law regulating how to pro-rate RTT days for employees starting mid-year, however all employees must be treated equally so there is a standard calculation Globalization Partners uses.
French law requires a Holiday accrual of 10% of total cost, paid out when the employee takes vacation (5 weeks per year), with the balance paid at the end of the contract if there are any remaining.
France Sick Leave
Employees must provide the employer with a medical certificate from a doctor if they are absent from work due to illness or injury, even for one day, within 48h of the beginning of his absence. Without a medical certificate, it is unjustified leave. During a sick leave, the employment contract is suspended. Unless repeated absences make it necessary to replace the sick employee with another employee under an indefinite term contract, the sick employee cannot be dismissed. Sick leave pay is determined by the collective bargaining agreement. It should be noted that it is extremely rare for sick-time to be utilized due to the extended vacation and RTT days provided to employees.
Maternity/Paternity Leave in France
During maternity and paternity leave, employees are entitled to a daily allowance from the social security authorities and, if there is no CBA applicable in the company, employers are not required to pay salary during maternity and paternity leave. However, some CBAs typically state the employee’s salary must be paid in full if the employee has a certain length of continuous service (typically one year on the date of the child’s birth). Some CBA can also grant additional maternity leave.
Employees have the right to return to their original position after the maternity/paternity leave and cannot be dismissed during pregnancy, maternity/paternity leave, or the ten weeks after the end of maternity leave.
Statutory Maternity Leave is as follows:
For a single birth bringing the mother’s number of children to 1 or 2, maternity leave is 16 weeks, 6 weeks before the expected due date, and 10 weeks after the birth.
For a single birth bringing the mother’s number of children to 3 or more, maternity leave is 26 weeks, 8 weeks before the expected due date, and 18 weeks after the birth.
For the birth of twins, triplets, or more, the maternity leave entitlement is higher.
The maternity leave allowance paid by Social Security is calculated according to the average salary of the employee in the limit of 95.22€ gross per day (in 2023).
Statutory Paternity Leave is as follows:
The “congé de naissance” of 3 business days has to be taken straight after the birth. This leave is fully paid by the employer.
Additional paternity leave of 25 calendar days (32 days if there are multiple births), including 2 distinct periods, can be taken as follows:
1 compulsory period of 4 calendar days taken immediately after the statutory 3-day birth leave.
1 optional period of 21 calendar days (28 days in case of multiple births).
The additional 25-day paternity leave is paid by Social Security (allowances calculated according to the average salary of the employee).
Optional Parental Leave
In addition, Employees who have worked for at least 1 year before childbirth/adoption are entitled to parental leave, if they wish, and this right lasts until the child’s 3rd birthday. One parent can take up to 2 years, and the other parent the third year. The parental leave can be full-time or part-time (min 16h/week worked). This leave cannot be refused by the employer. The employment contract is suspended during this time and the employer does not have to pay compensation for time not worked. However, the employee can receive certain indemnities from the French government.
Health Insurance in France
The health care system in France is largely financed by the government national health insurance and the country is considered to provide one of the best overall health care systems in the world.
The government generally refunds patients 70% of health care costs and 100% in the event of costly or long-term ailments. All residents must pay health insurance and the premiums are automatically deducted from employees’ pay.
As of January 1, 2016, it is mandatory for employers to provide a private health insurance that will complement the healthcare reimbursements of French Social Security. The amounts are determined by branch, through the applicable collective bargaining agreement (CBA).
Prior to 2018, the SYNTEC CBA applied to all PEO, consulting, and technology companies. However, this has since been replaced by the portage salarial CBA, under which the employer is responsible for 50% (or €23.50) of the base coverage of €47 per month in 2017 and the employee is responsible for the other 50%.
The cost includes coverage of dependent children, however, it does not include coverage of an unemployed spouse or partner.
Employees can add higher levels of coverage and/or coverage of their spouse/partner at a cost of up to €77 per month, which will be deducted from their net pay (the additional cost is the employee’s sole responsibility).
Employees can refuse the coverage if they were employed with the organization prior to January 1, 2016, if they are already covered by their spouse’s compulsory coverage and can provide proof of this yearly, or if they are under a fixed-term employment contract not to exceed 12 months.
France Supplementary Benefits
It is extremely rare for Employers in France to provide additional benefits. The benefits listed above give employees in France the second highest level of benefits in the world. It is thus rare for an employer to add on to these, especially as – due to non-discrimination rules – you would have to apply them for all employees.
Allowances are also rare, as they would be taxable and therefore are far from efficient for both the employee and the employer. The best alternative process is to process these requests through expense reimbursement whenever possible. If an employee uses public transportation for their daily commute, they are eligible for reimbursement of up to 50% of their monthly/yearly public transportation subscription.
Termination/Severance in France
Termination
You can dismiss an employee for personal or non-personal reasons.
There must be real and serious grounds for dismissal, and there is a complex and time-consuming termination procedure that must be rigidly adhered to. In case of serious/gross fault, no notice and no termination indemnity are due. In case of economic dismissal, there is a special procedure to be followed which can last several months, and special benefits will have to be offered to the redundant employees.
The termination of a short-term employment contract is in principle not allowed.
France has an alternative option to terminate the employees on a permanent employment contract: the amicable termination, called “Rupture Conventionnelle”. This allows both the Employer and the employee to agree upon a set of terms and conditions for an employee to leave amicably. While the minimum settlement required is equal to the amount provided in the case of a dismissal, typically this is increased to compensate for the fast processing time and reduced employer risk. The simplified procedure for this type of termination takes 5-6 weeks, during which the employee must be paid. The amicable termination can enter into effect after the end of this 5-6 week procedure.
If the termination is at all complex, most lawyers suggest negotiating a severance package with the employee in order to settle out of court. Our local advisor in France suggests that legal fees may be estimated at about 2,000 euros and that most companies end up paying about 6-9 months’ total compensation as severance. When employing through Globalization Partners you will have expert advice to guide you through this complicated process.
Severance
The probation period in France is your best friend. If an employee is terminated while the probation period is in effect, your risk of a very high severance package is substantially reduced. The maximum length of a probationary period for indefinite contracts in France is 3 months for technicians and intermediate supervisors and 4 months for cadre/executive employees. The probationary period can be renewed once the applicable CBA provides for it. For short-term contracts, the probation period ranges from 1 day for a 1-week contract to 1 month for a contract of 6+ months. It cannot be renewed.
The notice period for the termination in France depends on the employee’s length of service. If termination occurs during the probation period, the severance payment will include the notice period only. The notice period ranges from 24 hours to 1 month depending on the length of work at the company. If termination occurs after the probation period, there is a notice period as pre-determined by French law (between 1-3 months) and the collective bargaining agreement. For most CBAs it is 3 months notice period for cadre/executive employees. France’s termination process is complex and rigid and typically takes about a month before the termination enters into effect and the notice period starts. This notice period can also be paid in lieu.
It is usually not possible to terminate an employee on a short-term employment contract once the probation period is passed. Therefore, there is no notice period for short-term contracts, but if the contract is wrongfully terminated by the employer, the employer will be required to pay the remainder of the contract up to the contractual end date.
Severance pay is awarded if the employer terminates an indefinite-term employment contract if the employee has the minimum length of service required by the Labour Code (8 months) unless the CBA provides more favorable provisions. The amount of the severance pay is calculated according to the Legal or Conventional formula which considers the employee’s seniority and average salary (often including bonuses) over the last year of employment (or the last 3 months if more favorable).
Employees with under 8 months of seniority are not entitled to any severance pay. The employee is owed any accrued vacation at termination.
Paying Taxes in France
Since 2019, a Pay-As-You-Earn (PAYE) system has been used universally throughout France. Instead of filing an income tax and paying whatever taxes we owe for the prior year, we’ll be taxed at the source of the income, in monthly payments. Income subject to PAYE also includes retirement income (such as pensions or annuities), relevant overseas income, leave (for illness or maternity, for example), and rental income.
The extent of individuals’ liability to French income tax is determined by their residence status, the type of income they receive, the source of that income and the terms of double taxation treaties.
For 2021 income, the following progressive tax brackets are applicable to tax residents in France :
Average Income per part
Tax Rate
Up to €10,225
0%
Between € 10,225 – €26,070
14%
Between €26,070 – €74,545
30%
Between €74,545 – €160,366
41%
Above €160,366
45%
Social security contributions for Employers amount to approximately 45% of the gross salary, while the employees’ share amounts to about 22% (+/- 2% depending on the level of salary).
The social protection system in France is mainly made up of contributions to funds that are fixed by law or the collective bargaining agreement and are thus common to all companies in the same branch.
There are 5 components to compulsory coverage in France:
Social Security (URSSAF)
Unemployment (Pole Emploi)
Pension plan
Life & disability (“prévoyance”)
Health care (“mutuelle”)
This covers:
Health care costs: generally, refunds patients approx. 70% of most health care costs, or 100% in case of costly or long-term ailments.
Maternity and sickness pay
Disability insurance: to compensate for the loss of income due to decreased ability to work. The amount of indemnity depends on the level of disability.
Basic and additional pension funds (both mandatory) are paid when 43 years have been worked or you reach 67 years (note: this is currently discussed by the Government and might change in 2023) and also paid to survive spouse upon death (60% of spouse’s pension).
Life insurance: paid out to heirs of the deceased employee.
Work accidents: benefits for work-linked injury or sickness (100% of medical costs linked to injury/sickness and 100% capped pay during leave).
Family benefits are varied and include basic benefits for families with children, to offset childcare costs and the costs incurred due to the arrival of a child, as well as benefits for special purposes.
Housing benefits are paid out to support social housing and housing aid for low-income households.
Unemployment benefits.
Why Globalization Partners
It can be challenging to figure out how to set up a subsidiary or branch office in France, which historically was the first and most complex part of hiring an employee in France. Globalization Partners’ Global Employer of Record solution makes it easy to hire employees in France with minimal time and expense. We put your employee on our locally compliant payroll and you get a simple monthly invoice. We can also process expense reports, take care of personal income tax issues, and set up the employee’s statutory local benefits in France with the streamlined ease of a company that has done it hundreds of times before, enabling you to skip the difficulty of creating a subsidiary and instead focus on your company.
If you would like to discuss how Globalization Partners can provide a seamless employee leasing or PEO solution for hiring an employee in France, please contact us today.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
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