France

Overview

France is the 6th largest economy in the world, and as its status as the most visited destination of the world indicates the country’s thriving tourism industry. Also, foreign trade is an essential component of its economy. The value of imports and exports comprise 61% of the country’s GDP. Strong protection of property rights and an efficient regulatory framework encourage investors. France ranks 31 in the World Bank’s 2018 Ease of Doing Business index. There are foreign players in various sectors, and 31 out of Fortune 500 companies are from this prominent EU member.

Currency: Euro

Principal language: French

Government: Semi-presidential Constitutional Republic

Capital City: Paris

Major Cities: Lyon, Marseille, Toulouse, Nantes

Employment Contracts

Whether it is in writing or not, an employment contract in France must contain the following information:

  • The job description of employees
  • The compensation of employees, and
  • The legal agreement between the employee and the employer.

A written work contract is not mandatory except in certain situations such as fixed term and part-time. However, a written contract can reduce the risk of potential litigation.

Contracts must be written in French, although foreign employees can ask for the document to be translated into their language. In case of conflict, the foreign version will be implemented.

Indeterminate-term Contracts
This is the standard form of employment contract. There is no time limit and each party may end the contract any time provided a notice period is serviced. In order to lawfully terminate an employment contract, an employer must have a valid reason.

Fixed-term Contracts
The purpose of a fixed-term contract can be for:

  • replacing an employee who is temporarily absent
  • managing a temporary volume spike in work
  • managing seasonal work
  • fixed-term contracts in business sectors such as tourism, entertainment, and others
  • training or apprentices.

The maximum period of a short-term contract or of an initial contract with one allowable renewal is 18 months. However, the duration may be reduced to 9 month or increased to 24 months in certain cases.

Temporary Workers
The hiring temporary workers is under strict regulation by the French law. Temporary work contracts are often not used to avoid indeterminate contracts, and temporary workers need to preserve their equal rights with permanent employees. Temporary agencies need to pay temporary workers an indemnity equal to 10% of the gross salary that they receive for completing the assignment.

Amendment of the Employment Contract
An employer is not allowed to alter an employment contract in the areas such as changes in employee duties, workplace, salary, or hours of work without taking employees’ consent. Employers are allowed by law to change employees’ working conditions unilaterally, and if an employee refuses to accept these changes, it is considered acceptable grounds for dismissal.

Work/Time Regulations

Under the French law, the standard workweek comprises of 35 hours, but collective bargaining agreements can set a different standard. Employees may need to work more than 35 hours per week to be eligible for overtime. Employees cannot work more than 44 hours per week on average over a 12-week period.

Under no circumstances, can employees are asked to work longer than 48 hours a week. Generally, employees cannot work longer than 10 hours in a workday. A 12-hour limit may apply after due authorization from the labor inspector or when a collective agreement between the employer and the trade union specifies it. Non-managerial employees cannot be made to work more than 6 days per week.

Overtime
Overtime is allowed with a restriction of an averaged upper limit of 44 hours per week over a 12 week period. Employees cannot be made to work more than 48 hours per week or 10 hours per day. These rules do not apply to employees of the senior management, including sales representatives (VRP), executives, officers, residential services caretakers, servants, and childcare personnel.

Leave

Holidays
Employees covered by collective bargaining agreements are entitled to the following paid holidays each year:

  • Jan. 1: New Year's Day
  • Easter Monday
  • May 1: Labor Day
  • May 8: May 8, 1945
  • Ascension (40 days after Easter Sunday)
  • Whit Monday (49 days after Easter Sunday)
  • July 14: Bastille Day
  • Aug. 15: Ascension of Mary
  • Nov. 1: All Saints' Day
  • Nov. 11: Remembrance Day
  • Dec. 25: Christmas Day

Employees who do not sign any collective bargaining agreement are guaranteed only Labor Day (May 1) as a paid holiday. An employee who works on May 1 is entitled to a premium pay of 200%

Maternity Leave
Employers are required to compensate women employees for maternity leave. The duration of such leave is determined based on the following criteria:

  • 1 child (in addition to 1 child) entitles the mother to 6 weeks of prenatal leave and postnatal leave of 10 weeks.
  • 1 child (with 2 or more preexisting children) entitles the mother to 8 weeks’ of prenatal leave and postnatal leave of 18 weeks.
  • Twins entitle a pregnant employee 12 prenatal weeks and 22 postnatal weeks, and
  • For triplets, it is 24 prenatal weeks and 22 postnatal weeks.
  • Medical complications provide 2 additional prenatal weeks as well as four additional postnatal weeks.

Paternity Leave
Male employees get a paternity leave of 11 days within the four months after the birth of their child.

Adoption Leave
On the day of the child's arrival, a parent is eligible for 10-22 weeks’ of leave based on the number of children living in the home along with other factors. Parents may be eligible for additional time between 11 and 18 days if they split their leave between them.

Sick Leave
The Centre des Liaisons Europeennes et Internationales de Securite Sociale (CLEISS) pays a daily benefit to employees who are on sick leave, and the employer only needs to make up the difference between that benefit and employees’ regular remuneration. Employees with a minimum 1 year of service are eligible for this statutory sickness benefit. An employee's absence due to illness suspends the work contract and the employer's obligation to fully compensate the employee.

Family Leave
Employees are allowed to take paid family leave of 3 days after the birth or adoption of a child; 4 days for their wedding; 1 day for the wedding of their children; and 1 day bereavement leave for the death of a close relative such as father, mother, parents-in-law, and sibling.

Benefits

Old Age Insurance (Pension)
Employers need to contribute 8.55% of total taxable payroll up to a monthly ceiling of 3,269 euros for employee pensions, and an additional 1.9% of gross payroll for pension insurance without monthly ceiling. Employees need to pay 6.90% of wages toward pension fund with a monthly ceiling of 3,269 euros.

Supplementary Pension Plans
It is common for employers and employees to contribute to supplementary pension plans. Employers’ contribution toward supplementary pension plans of executives and non-executives are not liable to income or social security taxation.

Occupational Insurance
Benefits on account of accidents at work or occupational diseases are the responsibility of local Health Insurance Fund. Any instance of accident at work, needs to be reported to the employer within 24 hours. In turn, the employer will notify the Health Insurance Fund within 48 hours. The injured worker is entitled to full wage for the day of the accident, which is borne by the employer. Subsequently, the worker gets a daily allowance by the Health Insurance Fund.

Unemployment Insurance
Payment of unemployment benefits is subject to certain conditions. The amount and duration of benefit payments are based on the period and total amount of contributions. Employers contribute 4% of covered payroll wages toward unemployment insurance as well as an additional 0.2% of covered payroll to finance a salary guarantee. Employers also need to pay an additional contribution based on an employee's total age and the total number of employees. Employees contribute 2.4% of wages to unemployment insurance fund, where the monthly ceiling for each is 13,076 euros.

Health Insurance
Employers contribute 13.19% of total payroll wages for sickness, invalidity, maternity, solidarity, and death insurance. This includes the “contribution solidarity autonomy” (CSA) of 0.3% on all earnings of an employee.

Work Injury Insurance
Employers need to make contributions on the basis of the total assessed cost of employee insurance, which is based on the evaluated degree of risk. There is no employee contribution required for this fund.

Family Allowances
The French government grants a monthly family allowance to families with a minimum of 2 children. Employees do not make contribution to this fund. Employers need to finance this payment by levying a 5.25% tax on total payroll wages.

Autonomy Solidarity Contribution
The “contribution solidarite autonomie” (CSA) is evaluated on the same basis as health insurance and aids in financing health benefits for the elderly. All employers need to make this contribution, which is 0.3% of all employee earnings. Employees under an apprenticeship contract are not eligible for benefits under this plan.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into France and hire their employees without having to establish a branch office or subsidiary in France.

  • Your candidate is hired via our France PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
  • Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with France laws.
  • Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
  • With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 100+ Countries

  • Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
  • We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and managements. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcounts.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Lean more about our end-to-end international expansion services.