Are you an Italian company looking to hire in France? There are certain things to keep in mind. For example, did you know France has a legal Right to Disconnect policy? This means employees have the right to step away from work-related communications outside their regular work hours. It's a unique approach that underscores the French emphasis on work-life balance.
Along with this legislation, there are other important factors to consider. So, if you’re interested in hiring top talent from France, keep reading to learn more. We’ll go over everything you need to know, like cultural nuances to keep in mind, your legal responsibilities, and more.
Benefits of Hiring in France
To start, let’s explore the perks of hiring in ‘La Belle France.’
Access to European Markets
France is not only one of Europe's biggest economies but also a strategic hub for businesses aiming to grow in Europe. With its large economy and proximity to neighbouring markets, having a team that understands both French operations and the dynamics of nearby markets can be a significant advantage.
Skilled Workforce
France is known for its quality education system. In fact, it’s ranked as the 5th best country for education worldwide. Universities like École Normale Supérieure, École Polytechnique, and Panthéon-Sorbonne University often have competitive admissions and rigorous entrance exams. This has helped build a highly skilled talent pool that is well-prepared to tackle the fast-paced changes of today's markets.
Innovative Mindset
France has a culture of innovation. As a result, its talent pool is full of individuals with fresh perspectives and a drive to learn. The country has a long history of contributions to science, literature, fashion, and the arts.
Like Italy, France is also known for its burgeoning tech scene, particularly in the aerospace industry, with companies like Airbus and Arianespace leading in innovation. Challenges like bureaucracy do exist but are slowly being overcome by the desire for innovation.
Forward Thinking Approach to CSR
French employees are well-versed in Corporate Social Responsibility (CSR) and genuinely care about it. Hiring such employees gives Italian companies, which are increasingly adopting CSR initiatives, a leg up. French employees bring awareness, ideas, and passion to integrate responsible practices. This can help boost your company's reputation and effectiveness in CSR initiatives.
How to Get Started
Before hiring in France, there are three different routes you can take. Make sure to choose carefully.
Hire Independent Contractors
Hiring independent contractors in France is a common practice, but there are a few important points to consider.
- Independent contractors have flexibility in choosing work hours, taking on other clients (including competitors), and subcontracting.
- This setup might not replicate a traditional employer-employee relationship that comes with permanent roles.
- Misclassifying contractors as full-time employees can lead to higher taxes and legal consequences.
Set Up a Foreign Entity in France
Another option is setting up a local subsidiary in France to directly hire talent.
- This approach gives US employers control over various aspects like hiring, payroll, and creating a physical presence.
- Establishing a foreign entity requires extensive legal knowledge and strategic planning.
- Professional advice from experts in compliance laws can guide you through this process.
- This option typically is accompanied by higher employment costs.
Engage a Professional Employer Organization
- PEOs are beneficial for smaller companies with limited HR resources.
- They share legal and compliance responsibilities with the client company.
- Having an existing local entity in the country of employment is often required.
- PEOs offer compliance assistance, including handling employment contracts and work permits.
- Some PEOs may have minimum employee requirements.
- They streamline international hiring and compliance, allowing businesses to focus on core operations.
Partner with an Employer of Record (EOR)
- Partnering with an EOR service provider, like Borderless AI, is a cost-effective and compliant option.
- EORs act as legal employers, ensuring adherence to local regulations.
- An EOR will hire and pay employees and handle payroll taxes, deductions, contributions and more.
- This approach minimizes tax and labor law compliance concerns, allowing you to focus on growing your business instead of your legal responsibilities.
Things to Consider When You Hire in France
Now that you know a few reasons why you should hire from France, let’s get into some key factors that you should keep in mind.
Communication and Culture
When hiring global remote talent, it’s key to consider the impact of communication and culture on your working relationships. This is especially important when hiring people from a country with different cultural norms and communication styles, such as France.
French poet and novelist Jean Cocteau once said, "French people are Italian people in a bad mood." Though this may sound harsh, it’s intended to poke fun at the cultural differences between Italy and France.
Italians are known for their warm and expressive communication style, often using gestures in conversation to get their point across. While some parts of France share this approach to communication, in general, the French are known to be more reserved. This is especially evident in big cities like Paris, Marseille and Lyon.
This way of communicating can be seen in business in both France and Italy. Generally speaking, French communication tends to be more formal, whereas Italians emphasize personal relationships at work.
The French value formality, which extends to various aspects of business. You may notice this tendency when you hire from France. For example, it’s common for employees in France to greet seniors as Monsieur or Madame when they meet them for the first time.
Along with different approaches to relationships, communication and formality at work, it’s important to keep language differences in mind too. In France, the French language is a pillar of culture in the country. Although English is increasingly being used in business, many people still prefer speaking in French.
In contrast, people mainly use Italian when conducting business in Italy. English is also common, especially for international matters. However, the government’s recent crackdown on using Italian at work is an attempt to protect the language.
If the language differences have given you cause to reconsider, remember the benefits of including French speakers in your team. French is, after all, an official language in countries throughout Europe like Belgium, Luxembourg, Monaco, and Switzerland. So, having employees in France can be beneficial if your business operates in these regions as well.
The Toubon Law
Italian companies hiring employees from France need to be aware of the Toubon Law. This law, created in 1994, is all about preserving the use of the French language in public life. While it mainly affects French companies, it can also impact foreign companies like Italian ones operating in France.
Contracts and Agreements
The Toubon Law states that contracts, agreements, and terms and conditions should be in French. This includes employee documentation. So, as an Italian company hiring French workers, you need to make sure that your work contracts are in French.
Inside the Company
The law even covers how companies communicate within their own walls. This means that if Italian companies are talking to their French employees, it's smart to do so in French.
Playing by the Rules and Being Respectful
Following the Toubon Law isn't just about sticking to the rules. It's also about showing that you respect the French language and culture. This can make Italian companies appear better in the eyes of French customers and workers.
The Toubon Law has other stipulations regarding the use of the French language surrounding marketing, product info, etc. So, if you’re planning to enter the French market and hire from within the country, it’s key to go over those aspects of the law.
Collective Bargaining Agreements
Did you know that 95 percent of employees in France have a collective bargaining agreement? This is true even in industries without unions. So, it’s clear that these agreements hold sway in France. These agreements can affect parts of your employment contracts, like trial periods or dismissal policies.
This means that alongside local laws, there are more generous provisions for things like paid leave, maternity leave, healthcare, and working hours. Make sure to do your research and understand the rights your employees have in your field. An EOR, like Borderless AI, can help.
Work Hours and Local Employment Laws
Back in February 2000, France made a change to work life – they introduced a 35-hour workweek. While Italy usually follows a 40-hour work week, this 35-hour rule in France is limited to salaried employees. However, if you're hiring contractors using portage salary, this rule doesn't apply to them.
Now, there's a special case for managers, also known as "cadres." They have different rules for social security and pensions. These folks can work up to 48 hours per week by law. But sometimes, in rare situations, this can be extended up to 60 hours. This is because managers often have extra responsibilities that require more time to fulfill.
It’s also important to keep in mind that even though contracts dictate 35 hours of work, many people work more, especially in the private sector where 9-to-5 days or longer are common. Even in the public sector, some workers go beyond 35 hours. Depending on the organization, employees can balance extra hours with extra days off.
France is also considering the possibility of implementing a 32 hour work week.
The Risk of Misclassification
It's important to note that French labor laws have a strong focus on employee rights and benefits. Whereas Italy's labor laws are generally in favor of workers, they can differ in various ways. These differences can stem from how laws are applied in different regions of Italy. What's true in one place might not be the same in another. This might affect things like how long people work, the amount of time off they get, and the types of contracts they have.
France, on the other hand, has a knack for drawing lines between full-time employees and contractors, and knowing where you stand is essential. Misclassifying an employee could lead to costly fines. Understanding the distinctions between these classifications is crucial to stay on the right side of the law.
Employment Contracts
As mentioned earlier, employment contracts need to be written in French and outline the rules of termination. However, there are a few other key details to keep in mind.
In France, there are different types of work arrangements. Some people work as freelancers, while others have special contracts to help them find jobs if they've had a tough time. But the two main ones you need to know about are the fixed-term contract (CDD) and the permanent contract (CDI).
Fixed-Term Contract (CDD)
A Fixed-Term Contract, known as a CDD in France, is typically used for temporary job positions or specific projects. Unlike permanent contracts, a CDD comes with a predetermined start and end date.
While working under a CDD, employees do receive some benefits, such as health insurance coverage, but it's essential to note that the specifics of these benefits can vary depending on the terms of the contract and the employer's policies.
Permanent Contract (CDI)
The permanent contract (CDI) in France represents a long-term job commitment, lacking a predetermined end date. One of its primary advantages is the provision of job security, which ensures employees cannot be dismissed without valid reasons and adherence to legal procedures.
Additionally, CDI positions typically come with better benefits, including enhanced vacation allowances, retirement benefits, and a more extensive range of employment protections, making them an attractive choice for those seeking stability in their careers.
Choosing between these contracts depends on your situation and goals. The CDD gives flexibility, while the CDI provides stability. Your choice can have a big impact on your work life in France.
Probation Period
In France, a probation period, called "période d'essai," is common in job contracts. The duration depends on the role:
- Regular employees and workers: 2 months
- Supervisors and technicians: 3 months
- Executives: 4 months
During this time, the employer evaluates the employee's performance, and the employee assesses the job and company. If things go well, the employment continues; otherwise, adjustments or termination may occur based on the evaluation. French labor laws provide protections for employees during this period.
Termination
Terminations in France aren't as simple as turning off the lights. They follow intricate rules, and severance payments vary based on seniority and agreements. Properly understanding these processes helps ensure a respectful exit for both parties. Rules of termination should be included in the employment contract to ensure all the terms of employment are outlined from the start.
The employer and employee can decide, by mutual consent, to end their work relationship and work together to decide how to finish the long-term job contract. Then, they can make it official by signing a shared agreement to end it.
In France, the labor code highlights that ending employment should be a final measure, particularly when personal factors are at play – whether voluntary or involuntary. The code underscores the significance of having valid reasons and adhering to the appropriate procedures during such circumstances.
Notice Period
In France, the notice period is based on the length of an employee's tenure:
- For employees with tenure between 6 months to 2 years, the notice period is typically one month.
- For employees with tenure exceeding two years, the notice period is generally extended to 2 months.
This means that when either an employer or employee wants to terminate an employment contract, they must provide notice according to these timeframes. The notice period allows for a transition period before the employment relationship officially ends, providing both parties with time to prepare for the change.
The Costs of Hiring in France
When you set out to hire in France, it’s wise to have some idea of what you’ll need to pay. There are various costs involved, so let’s get into them.
Wages and Overtime Pay
In 2024, the minimum hourly wage is €11.65, or USD 12.38. Specialized sectors might have different minimum wages. Overtime pay comes into play if employees work beyond 35 hours per week, ensuring they receive at least 110% of their regular wage.
Corporate and Payroll Taxes
Your financial outlook in France includes corporate taxes and payroll contributions. Companies in the country face a standard corporate tax rate of 25%. Employers also handle payroll taxes, spanning areas like health, insurance, and unemployment, at a rate of 31.3%.
Mandatory and Supplemental Benefits
French employment laws include employee benefits as a non-negotiable part of employment. Mandatory benefits include pensions, disability support, and death benefits. Costs depend on the benefits package. Additionally, it's common to provide extra benefits beyond basic health coverage, like retirement plans, disability coverage, and bonuses.
Paid Leave and Public Holidays
France's stance on time off is refreshing. Full- or part-time employees are entitled to a lush 30 working days of paid time off each year. This accrues bit by bit each month, ensuring your employees get the well-deserved break they deserve.
France has ten national public holidays, allowing residents even more paid time off. These holidays include New Year's Day, Labor Day, and Christmas.
Employer Taxes
When it comes to employee costs and taxes in France, employers have specific responsibilities to ensure they comply with local laws. Here's a breakdown of what employers need to contribute with regard to employee costs and taxes:
- 7%: Health, maternity, disability, death
- 3.45%: Family benefits
- 0.89%: Supplementary incapacity, invalidity, death
- 0.77%: Workplace accidents and occupational illnesses
- 8.55%: Social security (capped)
- 1.9%: Social security (uncapped)
- 4.2%: Unemployment insurance
- 5%: Business allowance
- 0.41% (plus a fixed fee or EUR 9.53): Occupational medicine
- 0.10%: FNAL
Employers are responsible for deducting income tax from employees' salaries based on progressive tax rates. The rates vary according to different income brackets:
- 0%: Up to €10,225
- 11%: €10,225 - €26,070
- 30%: €26,070 - €74,545
- 41%: €74,545 - €160,336
- 45%: €160,336 and above
Severance Pay
When ending employment, severance pay is required. French labor laws stipulate employers must pay one-quarter of a month's salary per year of service. After ten years, this percentage increases.
Overall, understanding the cost of hiring in France means taking into consideration wages, taxes, benefits, leave, and severance pay.
Borderless AI Has Your Back
When you partner with Borderless AI, you open the door to a hassle-free approach to hiring international talent. Whether you’re an Italian, Canadian or German company looking to hire employees in France, there’s no need to set up shop on French soil.
Borderless AI enables businesses to compliantly hire and manage talent worldwide without establishing a foreign entity. We alleviate the complexities and risks associated with hiring global employees with zero deposits, dedicated in-house support, and AI-powered global employment law resources.
Get in touch with our team today!
Disclaimer
Borderless does not provide legal services or legal advice to customers, contractors, employees, partners, or the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
