Global HR Compliance in France

Do you have Ukrainian workers who are planning to flee to France to escape the Russian conflict? Or have your employees already left Ukraine and arrived in France?

Acumen International can help companies like yours, including IT, to compliantly employ your Ukrainian talent in France within days. Acumen’s global PEO and Payroll solution helps you to legally relocate your Ukrainian personnel to France so you can enjoy uninterrupted workflow with employees you know and trust. Our solution enables us to arrange for global payroll, and to open bank accounts for your employees. We can also provide your talent with laptops, mobile phones, and other tools they need to perform their jobs.

Expanding your global business operations to France and tapping into some of the world’s best talent for your company or your clients is an exciting challenge for your brand. You have no doubt conducted extensive market analyses and projected your profits and costs. But many companies overlook the potential challenges of hiring outsourcing and compensating a foreign workforce, in full compliance with local laws and regulations.

Whether you hire employees in the country for your own company or your clients, failing to abide by the many employment requirements demanded by French authorities can put your business at risk for penalties, fines and lawsuits. If your HR team is not fluent in the French language, it can be nearly impossible to untangle the numerous legal implications for international companies who fail to comply.

Common HR compliance risks to global employers in France include:

• a continually evolving in-country tax and social security system
• employee misclassification risks
• labor laws favoring the rights of employees over employers
• ubiquitous and highly active trade unions

To help businesses like yours mitigate compliance risks and streamline global hiring, payroll and termination processes, Acumen International has created our global PEO/ Employer of Record (EOR) solution. We leverage our extensive global knowledge base and robust international partner network with hyper local expertise to ensure that your company is fully compliant with French employment laws. Acumen helps you navigate the complexities of labor legislation in France, and manage employee on-boarding, payroll and compensation, with mandatory and voluntary benefits provision, on your behalf.

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Risks of Hiring Contractors in France

Some international companies opt to hire contractors in hopes of avoiding the complexities of compliance with the French Labor Code, but hiring independent contractors can pose its own risks.

The main compliance risk in France when hiring contractors is misclassification, where the contractor is deemed by authorities to be an employee, due to the characteristics of their relationship with the employer.

You may run the risk of misclassification if you:

• Pay the contractor a regular salary, at regular intervals
• Exert control over the contractor’s work hours or processes
• Provide certain types of benefits

If a dispute arises concerning the contractor’s employment status, the employer can be found guilty of compliance violations and be held liable.

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New off-payroll rules in France for 2022 and beyond

Thus abiding with the newly arising in-country off-payroll rules comes into play for 2022 and beyond.

Navigating Employment Laws in France

It is not enough to abide by the French labor code to avoid compliance risks in France. To be fully compliant, international employers must meet the additional obligations that are not outlined in the written French Labor Code.

In addition to complying with labor laws in France, global employers must be in full HR compliance with the following:

• International agreements that concern labor laws
• Local labor code
• Acts and secondary legislation defining employer and employee rights and obligations
• Provisions set forth in collective labor agreements
• Statutes governing employment relationships

Hiring and Compensating Your Workforce in France

Hiring a French employee is a multi-step process that requires extensive documentation from the employer. After advertising your vacancy and recruiting your desired candidate, you will be required to submit a document called a DPAE to the Union de Recouvrement des Cotisations de Sécurité Sociale et d’Allocations Familiales (URSSAF), declaring your intent to employ your chosen candidate. Failure to submit the DPAE incurs stiff penalties.

Acumen’s global employment specialists help international employers to arrange onboarding and payroll for their selected job candidates in France. Our global employment solutions are designed to ensure that your new hires are fully compliant with French labor law. Our international PEO and benefits disbursement services help to set you up for successful business operations in France by minimizing your risks of fines and penalties.

PLEASE NOTE: Acumen International is not a talent recruitment service provider. However, we are happy to provide the global talent recruitment as an on-demand service to clients who subscribe to our Global EOR services.

Anti-discrimination laws in France

Most countries, including France, have updated their employment discrimination laws to prevent unfair treatment of job applicants and employees.

French labor code forbids employers to dismiss or exclude job candidates from the recruitment process, or to discriminate in employee compensation, based on nationality, ethnic or racial origin, gender, sexual orientation, morals, name, age, marital status, religious beliefs, political opinions, trade union activities, physical appearance, medical condition and/or disability. In addition, French law prohibits sexual or moral harrassment of employees, and both are punishable by two years of imprisonment and a fine of EUR 30,000 if committed by a peer, and three years of imprisonment and a fine of EUR 45,000 when committed by a superior). If harassment is perpetrated by an employee, both the employer and the employee are liable.

Background checks and job interviews

In France, background checks of job candidates are strictly limited to necessary verification of a candidate’s qualifications, past job experience, and references. Criminal background checks are limited to professions involving security responsibilities, working with children, or positions that require working with sensitive information or materials. Checking of credit scores is not allowed in France.

During the job interview, an employer may only request information pertaining to the candidate’s professional skills directly related to the vacant position. Employers are prohibited from asking questions about the candidate’s personal life, relationship status, health, finances and other details not related to job performance.

Employment agreements: Fixed-term vs indefinite contracts

Employers are not legally required to draft a written employment agreement for full-time indefinite-term workers. But if a formal employment agreement is not drawn up in written form, the employee is considered under French law to be a full time, indefinite term employee. Fixed term and part-time contracts must be formalized in writing, in the French language. The agreement should contain information about the job title, specific duties, duration of employment, wages, benefits and contributions, duration of probationary period, terms of employment termination, and any non-competition clauses.

Failure on the part of the employer to differentiate between fixed-term, part-time and full time employment agreements can result in serious consequences. For example, a part-time employee without a written agreement could press charges, claiming they are entitled to full-time employment benefits.

If an urgent need arises to hire or fire an employee, or if the employee fails to fulfill the agreed-upon terms of employment, lack of a written employment agreement could entangle you in legal troubles that cost you time and money, and could seriously damage your brand’s reputation.

Acumen’s Employer of Record (EOR) in France provides sustainable support in the process of employing and payrolling your selected local and expatriate personnel on your company’s behalf as well as terminating them when/if the time comes.

Terminating French Employees and Severance Payments

Employers must have a justifiable reason for terminating an employment agreement in France, known as a cause réelle et sérieuse. Dismissal procedures are clearly defined by French labor code, and failure on the part of the employer to comply can be costly.

An employer must prove that they have real and serious ground for terminating an
indefinite-term employee. Valid grounds may be personal or financial.

Personal grounds for employee termination include:

• Poor job performance or insufficient professional skills
• Inability of the employee to perform work-related tasks
• Professional misconduct
• Excessive absenteeism

Financial grounds for employee termination include:

• Financial difficulties facing the business sector in general
• Technological changes that make the employee’s job obsolete

Wrongful termination of an indefinite-term employee can result in serious legal fees and penalties. French and EU anti-discrimination laws have made employee termination even more difficult and costly, since employees can claim wrongful dismissal based on discrimination of any sort. In such cases, it is up to the employer to disprove the claim, which can mean expensive legal fees, drawn out court cases and damage to the brand’s reputation.

Employees terminated for financial reasons or redundancy are entitled to severance pay. The amount of severance pay is calculated based on the employee’s years of service and accrued and untaken vacation time. To qualify for severance pay, the employee must have a minimum length of service.

Failure to comply with the established procedures for termination can result in penalties of up to one month of the employee’s salary. However, willful and serious misconduct on the part of the employee exempts the employer from such penalties.

You can avoid the complexities and legal penalties of terminating employees in France by partnering with Acumen International. Acumen’s global Employer of Record solution can save your company time and money by compliantly onboarding, payrolling and terminating employees on your behalf. With Acumen in your corner, you can rest assured that your brand’s reputation as a global employer remains untarnished.

Compensating French Employees

Compensation of French employees is strictly regulated by the Ministry of Work. In addition to guaranteeing a minimum remuneration, outlined in the French Labor Code, there are multiple regulations set forth to address:

• Individual and collective rights in the employer-employee relationship
• Equality treatment of male and female employees
• Terms of leave for maternity, paternity and childcare
• Conditions for temporary workers
• The right to collective bargaining
• Designation of working hours and paid holidays
• Provisions for paid leave and inclement weather
• Rules governing salary and overtime
• Occupational health and safety
• Child labor rules
• Illegal workers
• Reimbursement of work-related expenses

Employee Benefits and Contributions

The French workweek is only 35 hours, and time worked beyond that must be compensated as overtime. Overtime pay is calculated at 25% of regular wages for the first 8 hours, and 50% for additional hours. An employee’s total overtime hours may not exceed 220 hours per year.

In addition, the law stipulates that employees cannot be asked to work more than 10 hours per day, or more than 48 hours per week. Working hours must not exceed an average of 44 over a 12-week period.

Mandatory Employee benefits in France

Employers are also required to pay employees’ social security contributions, including:

• Health and retirement
• Unemployment insurance
• Pensions
• Occupational healthcare and disability
• Professional development

There are 13 paid bank holidays in France, and two consecutive holidays per year must be allowed immediately before or following a bank holiday. France also has a 13th month payment (‘13th salary’) policy, one-quarter of which is paid in July, with the balance paid in November.

Voluntary Benefits

In addition to mandatory benefits, companies should consider voluntary benefits that sweeten the deal when recruiting and retaining top talent.

In France, voluntary benefits may include:

• Meal vouchers. For French companies who do not have on-premises cafeterias, it is common to provide employees with a lunch voucher. Note that under French law, remote workers are entitled to the same benefits as on-site workers, so remote workers are also entitled to leave home to have lunch out if it is company policy.
• 13th month benefits. A year-end bonus is not required by law, but it is often paid by employers to help employees pay their annual taxes. Benefits may be paid once a year in December or January, or dispersed at intervals throughout the year. 13th month benefits (‘13th salary’) are taxable as part of the employee’s annual salary.
• Office equipment. Companies often provide workers with the equipment they need to properly execute their job duties. This may include a laptop, printer, cell phone or other equipment required for optimal work performance.

Please note: To ensure that our clients remain competitive and able to attract and retain top global talent, Acumen International provides a broad range of benefits on your behalf. These best match the country’s requirements and your business needs. Along with rendering our core global employment and HR compliance solution, Acumen goes beyond a global PEO provider role to become your #1 international HR management partner in France.

Acumen International: Your HR Compliance Partner in France

The complexities of French labor law can be a strong deterrent for companies considering doing business there. Stiff penalties for non-compliance coupled with the need to file extensive documentation in French can be a taxing challenge for your HR team.

Acumen International understands the obstacles faced by companies hiring global personnel in multiple countries. Our global Employer of Record (EOR) solution was created for companies like yours, to facilitate global hiring as you expand your business abroad, with minimal risks and challenges in France, and in 190 countries around the globe.

As your global HR partner, Acumen is able to onboard and payroll your French and expatriate workforce on your behalf, freeing you from the need to navigate the complexities of French labor laws. Our team of global employment experts works around the clock to ensure that our clients remain fully compliant with local laws and regulations, even as they change and evolve.

In addition to our core solution for compliant global hiring on your behalf, Acumen’s English-speaking team of experts can provide customized solutions for our clients, including payroll, benefits and perks for your offshore teams. Acumen’s all-in-one solution in France saves you time, money and valuable resources, so you can focus on growing your business.

Don’t let concerns about risks and challenges keep you from operating your business in France. Contact Acumen International today, and learn how our global EOR solution can help you grow globally, in France, and in 190 countries around the world.