Recruiting international talent can be costly and time-consuming, but it gives your company access to a broader talent pool and the chance to grow your business. This makes hiring abroad an attractive option for companies who want to expand their reach.
With the rise of remote work, German companies may be looking to hire skilled workers from other areas of the world. France is an excellent option, as it shares a border with Germany and gives you many skilled French workers.
France’s strong economy and sizeable skilled workforce make it an excellent choice for businesses who want to expand their European operations. However, you must remain compliant with local labor laws to avoid penalties.
Here’s everything you need to know as a German organization hiring in France.
Reasons to Hire in France
Economic Strength
France has one of the largest economies in the European Union and has a significant consumer market with wide-ranging preferences, providing your company with ample opportunity for growth. In 2023, France’s economy ranked 7th globally in terms of GDP.
France’s economy has strengths in several areas, including the automotive industry, luxury goods, energy, culture, telecommunications, and more. France also has a significant financial sector, potentially allowing you to access more investment opportunities.
Additionally, major French cities like Paris and Marseille are international business hubs.
Close Proximity
German companies looking to hire in France can benefit from the shared border between the two countries. This makes it an ideal choice for German businesses looking to expand their reach within the European market.
The two countries also share several cultural and historical similarities, which can help make the entire expansion process smoother. Additionally, shared time zones can make direct communication much more efficient. This can also help foster a better work culture between employees – even if they aren't located in the same local jurisdiction.
Skilled Workforce
France is home to a large, skilled workforce that can contribute to productivity gains. In 2022, France had a labor force of around 31.5 million people, providing your company access to a wide range of knowledgeable workers.
France’s educational system is also well-known and highly regarded. France’s education system ranked 5th globally in 2023, ahead of other notable European nations such as Switzerland, Sweden, and the Netherlands.
France’s skilled workforce is desirable for business in various industries, including engineering, healthcare, finance, and pharmaceuticals.
Potential Challenges for German Employers in France
Labor Laws and Regulations
One challenge German companies may face when hiring in France is the country’s complicated labor laws. These regulations cover various aspects of employment, such as the number of allowable hours worked, termination procedures, employee rights, and other components of the hiring process. Partnering with an employer of record can help you comply with all applicable laws and terms.
France also has a strong union presence, meaning you’ll need to know how to navigate negotiations when hiring in France.
Language Barrier
Many French workers can adequately speak different languages, though German companies may face some challenges when hiring in France. As of 2020, only around 3% of the population can speak fluent German, and 22% have limited language knowledge.
Understanding French Labor Laws as a German Company
Tapping into the highly skilled and diverse French talent pool has many benefits for your German organization. However, there are many considerations you must make before beginning the process to avoid potential noncompliance penalties or fees.
Contract of Employment
When hiring French workers, you must use a legally valid contract. Written documents are generally not federally mandated, but certain collective bargaining agreements specify that contracts must be in writing. Employment contracts should include:
- The name and address of the parties
- The job title
- A description of the job’s duties and responsibilities
- Hours of work
- Compensation
- Details regarding benefits such as paid leave
- Notice periods
- The duration of the probationary period
There are a few different types of employment contracts you can use to attract skilled French workers.
Permanent Employment Contract (CDI)
This is the most common type of employment contract in France. In this case, the employment agreement is on a full-time or part-time basis and has no specified end date. Working hours need to be stated in the contract. Workers are entitled to more job security than other employees, along with benefits such as paid time off and health insurance.
Fixed-Term Contract (CDD)
This type of contract is used for temporary hires in France and has a specified end date in the contract, or can end after the job is completed. After this end date, the agreement is terminated, and the employee is not entitled to severance pay or additional remuneration.
This type of contract is beneficial in situations such as:
- Replacing an absent employee
- Replacing a part-time employee
- Seasonal employment
- Temporary growth of the company
If you choose not to extend the fixed-term employee to a permanent contract, the worker is entitled to an indemnity, referred to as a precariousness bonus. The bonus equals 10% of the total gross income paid during the contract, though it can be limited with certain collective bargaining agreements.
Temporary Employment Agreement
These contracts are used for workers under a temporary employment company (ETT). The ETT places the worker with a company for a pre-specified period of time. These agreements are only supposed to be used to complete the task or project in a limited amount of time.
Other kinds of contracts you can use include:
- Apprenticeship contracts: These include a period of training and a period of activity in the company to obtain the necessary qualifications.
- Single integration contract: This is used for an employer who needs financial aid and an employee to help them find a job. The agreement is generally limited to 24 months.
Costs of Hiring a Worker in France
When hiring in France, there are several costs that German employers need to consider to remain compliant with local labor laws. These include your employee’s salary, benefits, payroll, local taxes, and termination. Here’s a rough idea of how much hiring a French employee might cost you.
Wages
In France, the legally mandated minimum wage (salaire minimum de croissance) is €1709.28 per month as of 2023. However, skilled French workers typically make much more than the minimum wage, as the average salary in France is €29,572 per year, or roughly €2464 per month.
However, minimum wage requirements can vary per sector and can be based on collective bargaining agreement terms. A CBA defines the terms of employment, including insurance and compensation, negotiated between employers and employee unions to guarantee employment protections.
Overtime
France follows a typical 8-hour workday with a 1-hour unpaid break for lunch. The country also has a 35-hour work week. Employees who work more than 35 hours in a week are entitled to overtime pay.
If overtime is in your employee’s regular employment contract, they are entitled to at least 110% of their regular wage.
If there’s no agreement for overtime, employees who work additional hours are entitled to 125% of their regular salary for the first 8 hours. After this, they may receive 150% for the following hours they work.
Payroll and Taxes
German companies who want to hire in France are responsible for setting up payroll. However, payroll in France tends to be more complicated than in many other EU markets. As an employer, you must ensure workers are paid on time. You are responsible for handling income tax, social insurance contributions, and other additional costs.
The payroll cycle in France is monthly, and there is no fixed date when salaries must be paid. Additional pay is not required by French policy, but many companies give their employees a 13th-month bonus in December.
As an employer, you are responsible for the following withholdings:
- 7% for Health, maternity, disability, and death
- 3.45% for Family benefits
- 0.89% for Supplementary incapacity, invalidity, or death
- 0.77% for Workplace accidents and occupational illnesses
- 8.55% for Social security (capped)
- 1.9% for Social security (uncapped)
- 4.2% for Unemployment insurance
- 5% as a Business allowance
- 0.41% plus a fixed fee for Occupational medicine
- 0.10% for FNAL contributions
Income tax is calculated based on how much the worker makes. Employee’s income tax brackets are:
- 0% for incomes up to €10225
- 11% for incomes up to €26070
- 30% for incomes up to €74545
- 41% for incomes up to €160336
- 45% for incomes over €160336
Leave Entitlements
Skilled workers in France are entitled to various forms of time off throughout the year. French employees can take up to 5 weeks of paid time off annually. Employees must take at least 12 consecutive days of working time off at one time. Certain companies also provide additional paid time off based on the employee’s tenure.
In addition to statutory leave, workers can take other types of time off as needed. Each eligible worker is entitled to unlimited paid sick leave if they’ve worked at least 150 hours during the year’s first three months. The first three days are treated as an unpaid qualifying period; then, social security covers 50% afterward.
Maternity leave in France allows new mothers to take up to 16 weeks of paid leave, and taking at least eight weeks of leave is mandatory. New fathers are entitled to 25 consecutive days off or 32 days for multiple births.
Additionally, France has 11 public holidays that employees receive payment for. These holidays include:
- January 1 (New Year’s Day)
- April 7 (Easter Monday)
- May 1 (Labor Day)
- May 8 (Victory Day)
- May 18 (Ascension Day)
- May 29 (Whit Monday)
- July 14 (Bastille Day)
- August 15 (Assumption)
- November 1 (All Saints’ Day)
- November 11 (Armistice Day)
- December 25 (Christmas Day)
Termination and Severance
When hiring in France, it’s important to consider the rules and regulations regarding ending an employment agreement. France does not have at-will termination and has somewhat complicated laws when terminating an employee.
Justified reasons for ending an employment agreement include:
- Mutual consent, typically after signing a termination contract
- Economic reasons such as financial hardships or redundancy
- Just cause, including poor performance or misconduct like theft
In France, the notice period required before termination is usually determined by the length of the employee’s tenure with your company. Notice periods can vary based on the terms of the collective bargaining agreement. Generally speaking, employees who have worked between 6 months and one year require a one-month notice. Workers over two years of tenure require two months’ notice, and executive-level employees require three months’ notice.
Probationary periods depend on the industry and the role of the employee. Normal workers and employees get two months of probation, supervisors and technicians require three months, and executives get four months.
Employers are usually required to pay severance in France, which is required for dismissals, contract violations, and mutual termination. The required payment depends on the employee’s tenure length and applicable collective bargaining agreement terms. Generally speaking, the terms of severance pay are:
- A quarter of an employee’s monthly salary for every year of service for the first ten years of employment
- A third of the monthly salary for every year after
Employers may also terminate and provide payment instead of notice.
Benefits
Skilled French workers are also entitled to certain statutory benefits. These benefits include:
- Healthcare insurance
- Paid time off
- Pension and social security contributions
- Family allowances
- Worker’s compensation
How to Legally Hire Employees in France: Local Employment Laws
Is it time to hire employees? As an employer, it's imperative that you are aware of all legal responsibilities. Especially when hiring and employing a global team.
Hiring in France can benefit your business in various ways, but certain requirements must be met to remain compliant with local labor laws. Companies can do this in two ways: set up a legal entity or partner with an employer of record (EOR).
Set Up a Local Entity
If you want to hire legally in France, you may need to set up a local entity. In this case, it is your responsibility as an employer to handle all aspects of the hiring process, including payroll, benefits, taxation, and more. Failure to do so may result in noncompliance penalties. This option can be a good choice for companies setting up physical infrastructure or hiring a larger team of French talent.
Setting up a legal entity is a time-consuming and resource-intensive process. To register your business in France, you must follow several steps, including incorporating your business and transferring the necessary capital.
Engage an EOR in France
If you don’t want to deal with the legal requirements of setting up a local entity, you can partner with an employer of record in France instead. Employers of record act as the legal employer of workers in the country you wish to hire from. They provide key benefits and handle all complicated HR requirements, including payroll, benefits administration, and termination.
EORs can streamline the entire hiring process for you, and a quality employer of record has expertise in local labor laws, ensuring you remain compliant. They handle all paperwork and employment contracts, so you can spend time and energy managing your staff and fostering an accommodating workplace culture. EORs can connect you with top global talent and perform all onboarding responsibilities.
Consider Borderless: The Trusted Source for a Legal Employer
Borderless is an employer of record that provides many essential services such as handling all aspects of the hiring process, connecting you with remote workers from around the world, improving your workforce diversity, identifying compliance risks, day to day operations, and more.
Book a demo with Borderless today to see how EOR services can help you quickly and efficiently recruit skilled workers from over 170 different countries worldwide. We're excited to help you hire, manage and pay employees to the highest level of excellence.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
