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Hiring in France
The first step toward a successful hiring venture is to invest in an air-tight locally compliant employment contract, which should be in French and tailored to the employment circumstances at hand.
France has a strong trade union culture. A Collective Bargaining Agreement (CBA) is a written agreement negotiated between 1 or more trade unions representing employees, or 1 or more trade unions representing employers in a specific sector. The CBA typically governs individual and collective labor relations, working conditions, and employee benefits. When considering hiring in France, employers should ensure compliance with all labor laws as well as applicable CBAs.
Employment contracts in France
While a written employment contract is not always required, it is highly recommended to put a strong employment contract in place, in French, that clearly states the terms and conditions of the employment, including but not limited to salary, hours worked, job description or qualifications, probationary period, and whether a CBA is applicable. Employers must provide certain terms of the employment to employees in writing, and many CBAs do impose an obligation to provide a written employment contract. An employment contract in France should always state the salary and any compensation amounts in euros rather than an alternate international currency.
Working hours in France
The length of the workweek in France is typically 35 hours. Legally, employees must not work more than an average of 44 hours per week, and the workday may not exceed 10 hours or 48 hours during any given week.
When employees are eligible for overtime, payment (or rest time in lieu) must be made with the following pay increases:
- 25% increase for each of the first 8 hours of overtime
- 50% increase for each hour after that
However, some CBAs and companies have negotiated agreements for working more than the standard 35 hours a week. In addition, certain employees (generally managers and employees who are autonomous and free to organize their schedule and workload) may agree to work under a flat annual rate (in days) agreement if the applicable CBA allows it. In that case, the agreement will compensate the overtime with “reduction of working time” or RTT days.
Holidays in France
Only Labor Day/1st May Day is a compulsory public holiday, but in practice, most employees receive all 12 public holidays as days off:
- New Year’s Day
- Good Friday
- Easter Monday
- Labor Day/1st May Day
- WWII Victory Day
- Ascension Day
- Whit Monday
- Bastille Day
- Assumption of Mary
- All Saints’ Day
- Armistice Day
- Christmas Day
- The remainder of the holidays are determined by a CBA or by an agreement with the employer.
Vacation days in France
Employees are entitled to 5 weeks of paid leave per year. This is prorated according to the number of days worked. Employment law in France requires a holiday accrual of 10% of the total remuneration earned during the period of reference, which is paid out when employees take vacation time. However, this amount may not be lower than the salary the employee would have received if they had worked during the leave period.
Paid leave is calculated 1 of 2 ways:
- Using the rule of the tenth, which provides for an allowance equal to one tenth of the total gross remuneration received by the employee during the reference period.
- Using the rule of salary continuation, which provides that a period of paid leave must attract the same remuneration as if the employee had worked.
The method of calculation that is most beneficial to the employee must be used.
France sick leave
Employees must obtain a medical certificate from a doctor if they are absent from work due to illness or injury, even for 1 day, within 48 hours of the beginning of their absence. Without a medical certificate, it is unjustified leave. During sick leave, employees may receive a percentage of salary as sick pay from social security and the employer from the 4th day of absence based on length of service with the company. Sick leave pay is often determined by the applicable CBA. It should be noted that it is extremely rare for sick time to be utilized in France due to the extended vacation and RTT days provided to employees.
Parental leave in France
During parental 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 parental leave. However, some CBAs typically state that salary must be paid in full if the employee has fulfilled a certain length of continuous service (typically 1 year on the date of the child’s birth). Some CBAs can also grant additional parental leave.
Employees have the right to return to their original position after parental leave and cannot be dismissed during pregnancy, parental leave, or the 10 weeks after the end of maternity leave.
Statutory maternity leave is as follows:
- For a single birth, where the pregnant employee has 0 or 1 existing children, maternity leave is 16 weeks: 6 weeks before the expected due date and 10 weeks after the birth.
- For a single birth where the pregnant employee already has 2 or more children, parental 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 EUR 95.22 per day (2023).
Statutory partner leave for non-birthing parents is as follows:
- The parental leave known as congé de naissance consists of 3 business days and has to be taken immediately after the birth. This leave is fully paid by the employer.
- Additional partner leave of 25 calendar days — 32 days if there are multiple births — can be taken as follows:
- 4 calendar days taken immediately after the statutory 3-day birth leave.
- Plus 1 optional leave of 21 calendar days (or 28 days in case of multiple births). This optional 21-day leave may be taken all at once or in 2 segments. Each segment must last at least 5 days.
The additional 25-day partner leave is paid by Social Security. The allowances are 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 or adoption are entitled to parental leave, and this right lasts until the child’s 3rd birthday (different rules apply to adoption). One parent can take up to 2 years off, and the other parent can take the remaining year off. Parental leave can be full-time or part-time with a minimum of 16 hours per week worked. Employers cannot refuse this leave. 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 government of France.
Health insurance in France
The healthcare system in France is largely financed by the government’s national health insurance and is considered one of the best in the world.
The government generally refunds 60% of healthcare expenses 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.
Additionally, employers must provide private health insurance to complement the healthcare reimbursements of Social Security. The amounts are determined by the applicable CBA.
France supplementary benefits
Supplementary benefits in France are infrequent since the statutory benefits outlined above already afford employees a substantial level of coverage.
Allowances are also uncommon as they are taxable, making them less advantageous for both employees and employers. The best alternative is to process these requests through expense reimbursement whenever possible. If employees use public transportation for their daily commute, they are eligible for reimbursement of up to 50% of their public transportation subscription.
Termination and severance in France
In France, there must be legitimate and serious grounds for dismissal, and the termination procedure is often complex and time-consuming.
Terminating an employment relationship during the probationary period is much less complex in France, so it is recommended to include a probationary period in the employment contract. The maximum length of a probationary period depends on the kind of worker:
- 2 months for salaried employees and hourly employees
- 3 months for technicians and intermediate supervisors
- 4 months for executives
If an employee is terminated during the probationary period, the general rules around dismissal are not appliable and no severance payment is required. Employers are typically obligated to give notice, and the length of this notice period is contingent on the employee’s tenure, spanning from 24 hours to 1 month.
CBAs often require different notice periods than the statutory minimum amounts, with many CBAs requiring 3 months’ notice for cadre or executive employees. An employer can choose to pay an employee in lieu of the notice period.
There are generally 2 grounds to terminate an employee under an indefinite contract:
- Personal grounds: misconduct or insufficient performance
- Economic grounds: economic difficulties, technological changes, company reorganizations, etc.
If an employee is dismissed on the basis of gross misconduct, no notice or severance are due, but evidence of such grounds must be very clear and unequivocal. Under the Labor Code, an employee is entitled to severance pay once they have completed a minimum length of service of 8 months, however CBAs could provide a different timeframe and more favorable terms. Unless otherwise provided by a CBA, the severance payment is calculated at ¼ of a month’s salary per year of service up to 10 years of seniority, and ⅓ of a month’s salary per year of service after 10 years of seniority.
France’s termination process is complex and rigid, and typically takes at least a month (or several months in cases of economic dismissal) before the termination enters into effect and the notice period starts. The specific termination process required depends on the reason related to the dismissal.
It is also possible to terminate by mutual consent, called Rupture Conventionnelle, which allows the employer and the employee to agree upon a set of terms and conditions for the employee to leave amicably. This termination must be compensated by paying at least the statutory required severance, often referred to as a termination indemnity, but typically, this amount is increased to compensate for the reduced notice and employer risk taken. The simplified procedure for this type of termination takes a minimum of 6 to 8 weeks, during which employees must be paid. The amicable termination can enter into effect after the end of this procedure.
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 are owed for the prior year, individuals are taxed at the source of their income in monthly payments. Income subject to PAYE also includes retirement income (such as pensions or annuities), relevant international income, leave (such as illness or parental), and rental income.
The extent of individuals’ liability for income tax in France 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 2023 income, the following progressive tax brackets are applicable to tax residents in France:
- Up to EUR 10,777: 0%
- EUR 10,778 – EUR 27,478: 11%
- EUR 27,479– EUR 78,570: 30%
- EUR 78,571 – EUR 168,994: 41%
- Above EUR 168,994: 45%
Social security charges for employers amount to approximately 45% of the gross salary, while the employees’ share usually amounts to 22%, but can vary 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 CBA.
There are 5 components to compulsory coverage in France:
- Social Security (URSSAF)
- Unemployment (Pole Emploi)
- Pension plan
- Life and disability (prévoyance)
- Healthcare (mutuelle)
This partially covers:
- Healthcare expenses: Refunds patients approx. 60% of most healthcare expenses, or 100% in case of costly or long-term ailments.
- Parental and sick 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.
- Mandatory basic and additional pension funds: Paid when employees have worked 42 years or turn 62. Only 40 years of work are needed for employees born before 1952.Those born after Jan. 1, 1955, cannot claim a full state pension until they’re 67.
- Life insurance: Paid out to the heirs of deceased workers.
- Work accidents: 100% of medical expenses linked to work 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 expenses 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 pension.
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