If you are a US company planning to hire employees in France, you’ve come to the right place. This guide will walk you through everything to know about hiring in this European country.
Expanding a business beyond your country’s borders can be a true challenge. You need to learn new local employment laws, navigate the French labor code, and understand France’s unique working culture.
That said, it has many benefits, including access to significant new markets and skill sets. US-based companies can tap into Europe’s potential by hiring employees from France. They can do so by setting up a legal entity or partnering with a global Employer of Record like Borderless.
Whether you go it alone or work with a third-party vendor, here are some key things you should know about hiring in France.
Why Should US Companies Hire in France?
Thinking of tapping into the European market? Start by employing here. France is one of the region’s largest economies. Hiring international talent in France will provide you with new perspectives on how to tap into the potential of markets in the European Union and beyond.
France is also Europe’s foreign direct investment champion. It’s a crucial player in the global economy, with energy, transport, manufacturing, technology, tourism, and agriculture being significant sectors in France.
Not only does France offer new market opportunities, but you can also gain access to a wide pool of skilled talent. With companies struggling to fill talent gaps, France is producing top talent through its robust education system.
Not only can workers receive excellent education, but they are also learning from France’s strong focus on research and development. This yields innovative and forward-thinking professionals ready to tackle the new challenges of the global economy.
French Employment Laws
If you are convinced that hiring in France is the right move for your US company, you must start considering compliance. One of the biggest challenges in global hiring is understanding and adhering to a new set of labor laws and mitigating compliance risks.
Let’s examine some of the key differences between US and French employment laws.
Employment Contracts
A properly drafted employment contract is essential when hiring French employees. While there is no federal requirement to have a written contract, it is advisable in case any issues arise. Also, some collective bargaining agreements specify that contracts must be in writing.
Employment contracts in France 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
You should also consider that different types of French employment contracts can be used.
Permanent Employment Contract (CDI)
The most popular type of contract in France is a permanent contract – otherwise known as a CDI. The employee may work part-time or full-time, but the contract has no specific end date.
A CDI entitles employees to a lot of job security. It also guarantees employee benefits, including paid time off, health insurance, and other standard benefits mandated by the French labor code.
Fixed-Term Contract (CDD)
If you want to onboard a temporary hire in France, you can use a Fixed-Term Contract or a CDD. Unlike a CDI, it has a specific end date or can end once the project is completed. This means that when the contract finishes, the employee is not eligible to receive severance pay.
A CDD is helpful for:
- Replacing an absent employee
- Replacing a part-time employee
- Seasonal employment
- Temporary growth of the company
Note, however, that if you don’t extend a fixed-term contract to a permanent one, you’ll need to pay the employee an indemnity, referred to as a precariousness bonus. Unless otherwise stated in a collective bargaining agreement, the bonus amounts to 10% of the total gross income paid during the contract.
Temporary Employment Agreement
Temporary employment companies (ETTs) use these employment agreements to place workers. This is done for a predetermined amount of time. These contracts are limited to specific tasks or projects with a defined duration.
There are also other types of French employment contracts. For example:
- Apprenticeship contracts include a period of training and activity in the company to obtain any necessary qualifications.
- Single integration contracts are 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.
The Right to Disconnect
France was the first nation to formally launch the Right to Disconnect legislation. Known as a leader in work-life balance protections, France has had the law in place since 2017. At that time, the French government began to require that employers negotiate with unions and employees on the employees’ right to disconnect from all work-related technologies after signing off work.
With teleworking, this law is particularly tricky to implement. As such, it is critical to outline a telework agreement that keeps you compliant when hiring remote workers in France. If there are different time zones involved, you should also define when you expect to reach your staff in France.
35-Hour Work Week
As we mentioned, France is a global leader in enabling workers to have a healthy work-life balance. As early as 2000, France adopted a labor reform policy with a 35-hour workweek. This setup applies only to full-time employees. If you engage contractors, they manage their hours and, therefore, do not fall under this legislature.
Keep in mind that the 35-hour week only applies to regular staff. Managers (also known as cadres) have different social security and pension plans. The legal limit of working hours for managers is 48 hours per week, which may be increased to 60 hours in rare cases.
Collective Bargaining Agreements
In France, most industries operate through collective bargaining agreements, meaning they are unionized. This may be new for many employers from the US and will significantly impact contract negotiations and other terms of employment. For example, it can affect trial periods, notice periods, wages, and dismissal policies.
In France, the standard probation period for an indefinite contract (CDI) ranges between two and four months. For CDDs, the maximum probationary period is one month if the contract lasts for six months or longer. However, industries governed by collective bargaining agreements may have different expectations.
Leave Entitlements
There are different categories of time off that French workers are entitled to throughout their employment.
- Paid time off: Most full-time workers can take five weeks of paid time off per year – a very generous leave policy compared to the US. Of these five weeks, 12 days must be consecutive. Certain companies also provide additional paid time off based on the employee’s tenure.
- Sick leave: Employees can take unlimited paid sick leave after having worked for at least 150 hours in the first three months of the year. They do not receive pay during the first three days of sick leave. Then, social security covers 50% of the pay. Some employers choose to top up the remaining payments.
- Maternity leave: New mothers in France can take up to 16 weeks of paid leave at nearly 100% of their regular salary (certain caps apply).
- Paternity leave: 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)
There are also certain other types of leave that your employees may qualify for, such as parental leave, for example.
Termination and Severance
France has strict rules regarding employee terminations. You’ll need to meet several requirements to comply with local regulations.
The Code du Travail (French Labor Code) provides several employee protections. In the US, employers can dismiss staff without notice, known as at-will employment. France, on the other hand, does not have at-will employment. As such, employers require a valid and proven reason for dismissal.
Legal reasons to terminate an employee in France include:
- Failure to perform basic duties of the job
- Insufficient results
- Misconduct such as disagreements with coworkers, theft, or insubordination
- Economic reasons
- Mutual consent
Notice Period
France also has strict rules about notice periods for employee termination. Tenure determines the length of the required notice period when dismissing an employee.
- If an employee has worked between six months and two years, your company must give one month’s notice.
- If an employee has worked for over two years, the required notice period is two months.
Costs of Hiring in France as a US Company
When hiring an international employee, salary is one of many employment costs you need to consider. Here is a breakdown of how much it costs to hire an employee in France.
Wages
As of 2023, the statutory minimum wage in France is €1747.20 per month or roughly €11.27 per hour. However, you will likely hire skilled workers in France, which means you’ll be paying well above the minimum wage to successfully attract top talent. To give you an idea, the average salary in France in 2023 is €2464 per month.
On top of the minimum wage set by the government, collective bargaining agreements may have different regulations across industries. This helps ensure that employees are protected and adequately compensated for their labor in certain fields. The employment contract should state the employee's wages and other financial implications.
Overtime
For most office jobs, employees in France can expect to work from 9 AM to 5 PM with an hour’s break for lunch. Even outside these standard hours, working days in France cannot exceed ten hours per day and 35 hours per week.
If the employment contract stipulates overtime pay rules, you can pay employees at 10% extra for any overtime hours worked.
If no such agreement exists, the overtime premiums are:
- Employees receive 125% of their regular hourly wage for the first eight hours of overtime.
- Employees earn 150% of their regular hourly wage for additional hours.
Employees are also entitled to a 20-minute break for every 6 hours worked.
Payroll Taxes
Employers must pay a range of payroll taxes in France. These support the various social security benefits and the welfare state across the nation. The contribution levels vary depending on the employee’s salary and can range between 3% and 45% of the employee’s gross earnings.
As an employer, you are responsible for the following withholdings:
- 7% or 13%: health, maternity, disability, and death (depends on income)
- 3.45% to 5.25%: family benefits
- 8.55%: social security (capped)
- 6.1% or 14.57%: supplementary pension and CEG (depends on income)
- 1.9%: social security (uncapped)
- 4.2%: unemployment insurance (capped)
- 0.15%: wage guarantee insurance
- 0.10%: FNAL contributions
- Other (varies): business allowance, occupation medicine, supplementary insurance for workplace accidents, incapacity, invalidity, or death
You must also withhold income taxes from each employee’s gross salary. These are calculated after social contributions and depend on their marriage status and whether they have children. Plus, income taxes are progressive and increase with the employee’s salary bracket.
Home Allowance and Remote Work Stipends
US companies hiring teleworkers in France must provide employees with a work-from-home allowance. This allowance typically ranges from €80 to €100 per month.
Home allowances are exempt from income tax up to a maximum of €580 for the entire year. Employees must be compensated for using their personal space as a work office.
Severance Pay
If your workers in France have permanent contracts (CDI) and have worked for at least eight months, they are entitled to severance pay upon termination.
The amount depends on the length of the employee’s tenure;
- ¼ of the employee’s monthly wages per year for the first ten years of seniority
- ⅓ of the employee’s monthly wages per year after ten years of seniority
During the probationary period, severance pay is not required. Rules may also vary by industry due to collective bargaining agreements.
How Can a US Company Legally Hire in France?
Engage Independent Contractors
One of the easiest ways to access France’s talent pool is to engage independent contractors. However, France has strong labor protections in place, and it can therefore be a risky practice. You might risk misclassifying employees as contractors, leading to financial penalties, potential reputational damage, and legal repercussions.
Set up a Legal Entity in France
Another route is to set up your legal entity in France. This is ideal if you plan to expand into the country and have business done from here. However, if your only goal is onboarding workers from France, this can be challenging, expensive, and time-consuming.
Partner with an Employer of Record
The simplest way to hire employees in France without an existing legal entity is to partner with an Employer of Record (EOR) or Professional Employer Organization (PEO).
EORs act as the legal employer wherever you choose to hire. This protects you from liabilities and ensures compliance throughout the hiring process.
A global employer of record service will take care of things like:
- Compliant contacts
- Global payroll
- Taxes and benefits
- Employee onboarding and offboarding
- And more
Make Hiring a Breeze with Borderless
Want to start hiring in France right now? Book a Borderless demo and find out how easy it can be to hire top talent from around the world.
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.
