With an international business landscape in constant flux, it’s important for business owners to stay up-to-date on legal and regulatory changes in any country in which they operate.
This is especially true for France, where evolving employment laws can significantly impact both employers and employees. For example, the law passed in 2017 granting employees the right to request telework.
For businesses expanding their presence in the French market or hiring local remote talent, understanding these ongoing changes to French labor laws is essential.
In this comprehensive guide, we'll explore French employment law including work regulations, workplace equality, and benefits compensation in the French employment landscape.
Employment Termination
In France, the concept of "at-will employment" does not exist as it does in some other countries, such as the United States. The laws in France are strict about what constitutes "just cause" for terminating an employment agreement.
Typically, dismissal is considered a last resort, and employers must explore alternative solutions before considering termination. In addition, employers must thoroughly document everything in writing and hold a preliminary meeting with the employee they wish to terminate.
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Work Hours and Overtime Regulations
The standard workweek in France is a maximum of 35 hours per week. However, it can be extended up to 39 working hours due to overtime regulations and Réduction du Temps de Travail (RTT) — reduction in working time.
For example, an employee may receive 10 days of RTT per year or 4 hours of RTT for a 39-hour workweek.
Any hours worked beyond the limit of 35 are paid as overtime. The percentage of the increase in pay is generally agreed upon as part of a collective bargaining agreement, or if there isn’t one, , the following rules apply:
- First 8 hours/week: +25%
- 9th+ hours/week: +50%
Minimum Wage and Compensation
As of 2024, the minimum wage in France is EUR 1,766.92. However, minimum wage standards are often determined by collective bargaining agreements.
Understanding the nuances of such compensations, including bonuses and allowances, is essential for businesses to manage their labor costs effectively — and compliantly.
Workplace Equality and Anti-Discrimination Laws
French employment law strongly defends the principle of equality in the workplace. Employees are protected from discrimination during employment and the recruitment process, regardless of their employment status or contract type.
The French labor code offers extensive protection against discrimination, covering a wide range of characteristics, including race, age, sexual orientation, religion, gender identity, family status (including pregnancy), morals, political opinions, trade union membership, surname, physical appearance, non-French language proficiency, place of residence, financial situation, ethnic affiliation, and genetic traits, among others.
Violating these anti-discrimination statutes can incur severe civil and criminal penalties. An individual accused of discrimination can be personally fined up to EUR 45,000 and face up to three years in prison, while the implicated business can incur fines up to EUR 225,000.
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Worker Classification
It’s crucial for employers to ensure they are properly classifying all workers. If a company hires someone as an independent contractor who is later determined to be an employee by the URSSAF, which governs French labor laws, the company could face serious financial consequences.
In addition to being required to pay back taxes, and missed Social Security contributions and pension payments, employers could be fined EUR 250,000 and potentially banned from hiring independent contractors for up to 10 years.
Labor Unions and Collective Bargaining
Labor unions in France play a key role in representing employees' interests and negotiating wages and working conditions. Despite only 8% of workers being members, unions still heavily influence labor laws.
Workplace elections every five years determine which unions negotiate on national and local levels, meaning companies are affected by union-led legal changes, even if their employees aren't union members.
General Data Protection Regulation (GDPR)
The GDPR, which went into effect in 2018, is the strictest security and privacy law in the world. It regulates data privacy and sets guidelines for the way companies collect and manage personal information for residents of the European Union (EU).
No matter where a company is based, if it employs French citizens, then the GDPR governs the manner in which their data is processed and stored. Failure to comply with GDPR can result in serious fines, which can climb as high as EUR 20 million for severe violations.
Breakdown of Taxes in France
The taxation landscape in France is characterized by its complexity, with around 20 different social contributions, each with their own percentages and caps. Employee contributions are often straightforward, with social security contributions hovering around 21% of the gross salary.
Employers, however, encounter a more multifaceted landscape. The social security contributions average 24% of the gross salary. This is further increased by pension contributions (15%), unemployment benefits (4%), and other employer costs (9%).
These contributions fund a range of social services, including family benefits, health, disability, death, social security, transportation tax, and accident at work provisions.
Additional expenses for all companies operating in the country include:
- CSE (Statutory Bureau of Elected Employees)
- CVAE (Corporate tax based on turnover)
- Occupational Medicine (Statutory cover)
- Travel and Repatriation Insurance
- Professional Indemnity Insurance
- C3S and CFE (Local tax contribution)
- AGEFIPH (tax on non employment of handicapped personnel)
- Membership to collective bargaining (price is based on the turnover and headcount)
Social Services and Benefits
France's social benefit landscape extends beyond statutory requirements, showcasing the nation’s commitment to enhancing the quality of life for its workforce. Medical insurance is obligatory, with both employer and employee sharing the cost.
This mutual investment demonstrates a shared commitment to employee well-being, creating a workplace where they thrive both physically and mentally.
Social Security covers:
- Family Benefits
- Health, Disability, Death, Social Security
- Transportation tax
- Private medical insurance (statutory benefit)
- Private life insurance (statutory benefit)
- Social Charges (Solidarité Autonomie)
- Accident at Work
- Wage guarantee fund
- Old age insurance
- Professional training tax
Employee Leave Policies in France
The generosity of the French leave policies is another testament to the nation’s commitment to employee well-being. Employees are entitled to a minimum of 25 paid days off per year, with additional allowances for sick, maternity, and paternity leave, ensuring that life’s pivotal moments are not marred by financial worries.
Sick leave, for instance, is comprehensive, with employees entitled to up to 6 months’ absence under specific conditions. Maternity leave is equally generous, offering 16 weeks of leave, ensuring that mothers have enough time to bond with their newborns without the pressures of the workplace.
Employers that fail to follow these mandatory leave offerings, or any other statutory benefits, could face fines and other penalties.
There are 11 public holidays in France. Only Labour Day is a statutory paid holiday, although most employers treat all public holidays as paid time off for employees.
- 1st January - New Year’s Day
- 10th April - Easter Monday
- 1st May - Labour Day
- 8th May - Victory Day
- 18th May - Ascension Day
- 29th May - Whit Monday
- 14th July - Bastille Day
- 15th August - Assumption Day
- 1st November - All Saints' Day
- 11th November - Armistice Day
- 25th December - Christmas Day
Hire Compliantly in France
Navigating the landscape of global employment can be complex, which is why it’s important to partner with an Employer of Record like RemoFirst.
We have the expertise and solutions to help your business hire, manage global payroll, and remain compliant in 180+ countries, including France.
And we can also manage the visa and work permit process in France should you have employees relocating to the country.
