FranceAs the third-largest economy in Europe and the seventh-largest globally, France is one of the best locations for business expansion.
While France is best known for its distinguished architecture, historical hotspots, and luxurious lifestyle, it has a pro-business environment attracting investors and companies worldwide. After all, France has a sophisticated infrastructure, a highly-talented workforce, and a strategic location with access to the larger European market.
Companies setting up a business in France must understand and abide by the employment and labor code in France. The French labor code sets the laws governing employment, companies, trade unions, and employees’ rights and benefits. Essentially, labor regulations in France offer commendable protection to employees. However, the country’s dynamic legal environment requires companies to stay updated with labor laws to avoid penalties or litigation.
This guide on the labor code in France includes all the details you need to know before hiring in the country.
Applicability of the Act
The first part of the labor code in France highlights the applicability of its provisions or to whom it applies.
The French Labor Code applies to:
- Employers and employees, governed by private law
- The staff of public bodies under the provisions of private law
The labor code also determines the criteria for calculating a company’s workforce to whom the provisions apply. Accordingly, the terms of the labor code apply to the following:
- Homeworkers
- Employees with a full-time, open-ended employment contract
- Employees with an intermittent employment contract
- Employees with a fixed-term employment contract
- Employees available via an external company who have worked for at least a year
- Temporary employees in due proportion to the time they were present during the previous year
- Part-time employees, irrespective of the nature of their employment contract
In addition, the French Labor Code also specifies the job titles that don’t fall within the ambit of a company’s workforce:
- Apprentices
- Those holding an initiative-employment contract
- Those holding an employment support contract
- Those holding a professionalization contract
However, the legal provisions of the labor code concerning the cost of the risks of workplace accidents and occupational hazards apply to the above employees.
Employment Contract
Employment contracts are a vital aspect of the labor regulations in France and are established according to the terms decided by the contracting parties.
Here’s a list of the principal types of employment contracts in France:
Permanent contract
The permanent employment contract is the most common in France.
Also known as an open-ended employment contract, specifying an employee’s working hours, which may either be part-time or full-time.
A permanent employment contract is the standard form of an employment relationship and does not specify a termination date. Thus, an employee hired under the permanent employment contract can keep their job indefinitely unless they choose to resign, decide to part ways through a mutual agreement with the employer (conventional rupture), or the employer dismisses them.
Fixed-term contract
An employer and their employee conclude a fixed-term employment contract for a limited time to perform a specific task. Therefore, a fixed-term employment contract specifies the start and end dates. While the maximum length of the contract is 18 months, it may extend to 24 months under special circumstances.
The fixed-term employment contract is a written contract in French. However, if the employee is a foreigner, they may request a translation of the agreement in their language. Under no circumstances can a fixed-term contractual employee permanently fill a job position in a company.
Temporary contract
A temporary employment contract applies to situations (only in cases stipulated by law) when a specific task or assignment needs to be accomplished in a limited time. Usually, a temporary employment company (ETT) hires and pays employees under a temporary contract to work for organizations/clients for a short period.
Apprenticeship contract and professionalization contract
The apprenticeship and professionalization contracts are agreements with alternating periods of training and activity. Their objective is to help employees secure professional qualifications.
Single integration contract (Contrat Unique d’Insertion or CUI)
The single integration employment contract in France is between an employee who will gain professional integration aid and an employer who will receive financial assistance. Such agreements enable hiring people who have difficulty finding employment. However, the duration of a single integration contract is usually limited to two years, subject to change by law.
Key Provisions of the Act
Below we highlight the key provisions of the labor code in France governing the terms and conditions of employment, such as wages, working hours, overtime, leaves, rest periods, and employment relationships.
Work hours and overtime
As per the labor code in France, employees work 35 hours a week. However, the minimum work hours vary with the industry and are subject to collective bargaining agreements, if any. In addition, any work beyond the standard 35 hours is considered overtime and is payable.
An employee should not work more than 10 hours a day, 48 hours during any given week, and an average of 44 hours a week during 12 consecutive weeks. While at work, employees are entitled to a minimum of a 20-minute break for every six hours they work.
Night work
In France, night work accounts for any work performed between 9 PM and 6 AM or 7 AM at the latest. However, the duration of daily night work of an employee should not exceed eight hours, and the weekly night work calculated over 12 consecutive weeks must not exceed 40 hours.
Night employees receive compensation for their night work in the form of weekly rest days or salary. In addition, pregnant employees working night shifts may request daytime work during their pregnancy and throughout the post-natal leave period.
Minimum wage
Effective January 1, 2022, the gross minimum wage in France is EUR 10.57 (US$ 11.43) per hour. Together with Germany, Belgium, the Netherlands, Ireland, and Luxembourg, France is among the group of European countries with a national monthly gross minimum wage exceeding EUR 1,500 (US$ 1621.78). The minimum salary is subject to change.
The labor regulations in France stipulate overtime pay at a 25% premium for the initial eight additional hours and a 50% premium for overtime beyond those hours.
Annual leave
According to the French labor law, full-time employees working 35 hours a week are entitled to five weeks of paid annual leave. In other words, an employee gets a leave of 2.5 working days per calendar month of work, up to a maximum of 30 working days. However, employees cannot take more than 24 consecutive days of annual leave unless the employer agrees.
France has 11 statutory holidays throughout the year. Only Labor Day (May 1) is a mandatory holiday, and employees working on this day are entitled to a 100% premium.
Maternity leave/paternity leave
Pregnant employees are entitled to maternity leave around the expected time of childbirth. Plus, there are pre-natal and post-natal leaves. The duration of the maternity leave is variable and ranges from 16 to 46 weeks, depending on the number of unborn children or already dependent children at home. Moreover, employees get a maternity allowance during their maternity leave term.
Fathers can take paternity leave of 28 days, increasing to 32 days for multiple births. They also get paternity leave compensation if they take the leave within six months of the child’s birth and have worked at least 150 hours during the three months before the leave period.
Parental leave and rights
The labor code in France entitles employees to a parental leave of a year which may extended until the child turns three. Both parents can take the parental leave, either alternately or simultaneously, and are compensated by Social Security.
Parental leave is also applicable in cases where the child has a disability, is suffering from an illness, or has had a severe accident that requires the parents’ presence. In this case, employees get a daily parental allowance from the Family Allowance Fund.
Employees also get parental rights covering maternity leaves, breastfeeding at work, and exemption of pregnant employees from nightshifts.
Sick leave
Labor regulations in France entitle employees to paid sick leaves. However, there is no fixed number of days an employee can take sick leave as long as they can produce a medical certificate to justify the absence. During sick leave, the employee gets paid by Social Security, not the employer.
Protection from workplace discrimination
The non-discrimination principle is a core aspect of the labor regulations in France, and any form of discrimination is illegal during the recruitment process and at the workplace. Thus, employees cannot be harassed or discriminated against based on their race, disability, religious beliefs, sexuality, and trade union status. Offenders may be charged hefty fines or even be imprisoned.
Termination of employment
Employers cannot dismiss employees working under an open-ended contract unless there is just and valid ground. The reasonable grounds for the dismissal of employees include personal and economic grounds. Personal grounds include poor performance, misconduct within the company, and repeated or long-term absence not related to work-related illness or accident.
The labor regulations in France also specify financial difficulties in the relevant business sector and technological changes as economic grounds for employment termination.
Penalties
For businesses expanding into France, it is mandatory to comply with the provisions of the French Labor Code to prevent penalties. Below is a list of some penalties that the labor code specifies for violating its terms:
- Discrimination is a criminal offense punishable by a fine of up to EUR 225,000 for the employer and a maximum of three years of imprisonment with a fine of EUR 45,000 for the company’s legal representative.
- Sexual and moral harassment entails a minimum of two years of imprisonment and a fine of EUR 30,000.
- Employers who fail to respect the general principle of professional equality between men and women are punishable by imprisonment of a year and a fine of EUR 3,750
Compliance Strategies for Employers
Navigating the labor regulations in France and compliance with all provisions can be overwhelming, especially for new businesses.
While there’s no one-size-fits-all program to adapt to the risks of violations, here’s a list of standard compliance strategies you can consider for your business in France:
- Hire an HR manager or a PEO/EOR to manage employee hiring, payroll, benefits, and legal compliance.
- Establish company procedures and policies in writing and adapt them with time.
- Promote and reinforce a compliance culture through policies and regular training.
- Conduct periodic third-party compliance audits.
How Can Multiplier Help?
Multiplier can help businesses stay compliant with the labor code in France. With solutions such as automated employment contract generation, multi-lingual contracts, and compliant expansion, we ensure to comply with local labor and employment laws.
We can also take care of your global teams’ payroll, taxes, and benefits, allowing you to invest your time and energy into business growth and expansion.
