The French economy grew by over 7% in 2021 (in Q4) and is projected to grow steadily at 3.2% in 2022 and is a powerhouse of skilled and educated talent. So, tapping into this skills market shall promise growth for your new business venture. Additionally, expanding into France also offers access to the larger European market.
However, recruiting the right talent is easier said than done and employers often face unique challenges while hiring employees in France. Competitive market forces and language barriers are two primary reasons which can make hiring in France difficult for foreign employers.
Read this guide on how to hire people in France as we highlight the steps, challenges, and employment options for companies.
Things to Know Before Hiring in France
You must consider these essential aspects before hiring people in France:
Employment scenario in the labor market
This is one of the most significant factors to consider before hiring employees in France. Since 2020, France’s unemployment rates have reduced considerably, indicating a gradual improvement in the country’s employment scenario. Companies now issue long-term contracts along with other external perks. Once firms hire candidates after evaluating their professional attitude and work ethic, they offer hands-on training to new recruits to help shape them for the role.
Collective Bargaining Agreements (CBA)
According to France’s employment laws, employers must carefully consider collective bargaining agreements. France’s trade unions are the primary reason why CBAs are common. CBAs focus on terms and conditions regarding employment provisions such as working conditions, working hours, minimum wages, etc.
CBAs apply to a single company, or a group of companies, and even the whole industry in some instances. Labor laws and employment contracts also fall under this category.
Since French is the official language, almost 88% of the population speaks the first language. Though nearly 55% are proficient in English, knowing French helps employers connect with candidates more personally. Knowledge of the local language can enable employers to interpret employment contracts when drafted in French. However, it’s not a deal-breaker if you cannot speak or understand French because France’s laws forbid discrimination toward a non-French speaker due to language barriers.
Working hours and minimum wage
35 hours is the standard workweek in France. Employees are not legally permitted to work more than 10 hours per day. The weekly average is 48 hours.
The French government encourages personal life and work balance. The law mandates companies with more than 50 employees to set hours where they can disconnect from working conditions to enjoy rest breaks.
Paid leaves and holidays
Employment laws entitle employees to five weeks of paid vacation. However, under CBAs or French laws, senior employees enjoy the privilege of more extended vacation time. Employees taking sick leaves must offer medical certificates to their company HR.
Taxes and social welfare programs
France has a progressive income tax system. The Pay As You Earn (PAYE) model allows employers to withhold taxes and contributions from employees at the source.
The Cost of Hiring an Employee in France
To understand the recruitment costs in France, you must first know the difference between gross and net salaries.
Gross salary is the amount an employee earns annually before their employer makes the necessary deductions. Net salary or the take-home salary is what the employee receives after income tax and other mandatory deductions (social security, medicare, etc.) are made.
Thus the cost of hiring an employee in France is based on the salary components as follows:
- Social security and unemployment contributions
- Health insurance
- Life and accident insurance
- Other contributions to professional training programs
The tax amount for foreign employees differs according to their employment duration:
If one stays in the company for 12 months or more
The employee gets 55% of their salary, with the maximum limit of 2.5 times their regular monthly SMIC amount. As of January 1, 2022, this amount is €4,007.79. However, if the employee’s gross monthly salary is over €4,007.79, the tax ceiling is €2,204.28.
For employment duration of over three months and less than 12 months
The tax amount for such employees is between €74 to €300, based on their gross monthly salaries.
Seasonal employment work
The tax amount for seasonal workers is €50 for each complete/incomplete month of work.
Hence, employers hiring employees in France must bear separate costs on national and international levels.
What Does a Company Need to Hire Employees in France?
You must follow the steps given below to hire employees in France:
Submit a DPAE (Declaration Prior to Hiring)
You must draft this declaration and submit it to the relevant social protection organization within eight days of hiring before the recruits start working.
Make an entry in the single staff register
It is compulsory to register all new hires in the single staff register immediately after they join.
Partner with a social protection group
All companies must join a social protection group within three months of incorporation. A collective agreement will designate the pension fund for your employees. When you hire employees in France, you must include them in the appropriate pension funds.
Conduct an information and prevention visit
This visit must be organized just after three months of hiring new employees. The aim is to consult employees about their state of health and inform them about the risks involved in their profession.
Offer a legit work contract
In France, it isn’t compulsory to have a written agreement for full-time employees. However, for part-time employees, work contracts must be written. If a written contract doesn’t exist, a CDI must be drafted in French. For permanent employees, the collective agreement mandates to include necessary elements like:
Identity and address details of both parties
- Educational and professional qualifications
- Job description
- Work location
- Working hours
- Yearly remuneration (salary and bonuses)
- Paid vacations and leaves
- Probation period
- Notice period
You must offer payslips (usually the digital version) to employees after they’ve completed their first work period.
Various Options for Hiring Employees in France
Employers have multiple options around for recruiting employees in France, each having its specific conditions.
- CCD or Temporary Contract: This contract applies to the following circumstances:
- When a temporary employee is hired to fulfill the responsibilities of an absent permanent employee
- Short-term augmentation activities
- Hiring seasonal workers for a specific period
- Special role temporary contracts
- Customary role temporary contracts
- CDI or Permanent Contract: These contracts involve either two or multiple parties. Permanent agreements may be written or verbal. Both employer and employee must sign written CDIs. The contract can only be terminated with the consent of all parties involved.
The Steps to Hiring in France
The recruitment process in France includes seven steps:
Verification of the candidate’s citizenship: If the employee isn’t an EU citizen, it is crucial to verify their visa and work permits to confirm whether or not they are allowed to work in France.
Submit the DPAE to the URSSAF
The employer must register with the URSSAF. When you declare your first employee, you will become registered with the URSSAF, which will offer you an employer number. You must also register your employees to the relevant social security and health insurance schemes.
Offer and sign the work contract
Contracts differ according to the cases, such as:
- Fixed or permanent contracts
- Full-time or part-time
- With the home office
- With/without the non-competition clause
- With/without mobility clause
- With/without employee benefits
Conduct a medical examination
The government mandates employers to conduct regular medical checkups for employees. However, you must schedule the first medical examination within three months from the hiring date.
Organize the pension fund
You must affiliate all employees hired under the general scheme with the AGIRC ARRCO pension fund. There are separate pension funds for different professional activities.
Establish a staff register
You must include the following information in the staff register:
- Employee’s identity details
- Career details (past experiences, qualifications, etc.)
- Type of employment contract
- Type and serial number of the work permit for foreign employees
- The full names and duration of internship for trainees/interns
Establish the Occupational Risks Document
Employers must create an Occupational Risk Document highlighting the potential hazards involved in the profession. This document informs the employees about the safety prerequisites in the workplace. You must also conduct information and safety training for new employees to educate them about the risks and necessary safety measures.
Let Multiplier be Your EOR Platform in France
To conclude, hiring employees in France involves several steps and documentation. At Multiplier, we understand that fulfilling these legal mandates and recruiting candidates in compliance with French labor laws is an arduous task.
Hence, we offer a SaaS-based Employer of Record solution to help you recruit top talent in France without even setting up a subsidiary. In addition, we can handle employee payroll while managing your workforce seamlessly from our consolidated platform.