Hiring employees in a foreign country can be a complex process, especially when it comes to understanding legal and cultural differences. However, with such global uncertainty, it’s smart for Canadian companies to not only diversify income but minimize overall business risk.
Canadian companies can do this by building teams of international employees in key strategic markets for your business. If you are a Canadian company looking to branch out into Europe, France should be at the top of your list. Hiring in France also helps Canadian companies access top talent and establish a presence in Europe.
France’s unemployment rate has reached its lowest since 1982. While it’s competitive and the laws are different, the French are looking for opportunities that stand out and Canadian companies take this into consideration.
Does it feel too complicated? This guide is for Canadian companies like yours. Let’s explore how you can hire in France smoothly and successfully.
Reasons to Hire in France
Global Opportunity
France is the third most influential economy in Europe and the sixth most influential in the world in terms of its GDP. This is due to the nation's advanced and industrialized economic state, along with its well-developed financial markets. This makes it a desirable destination for business expansion.
Close to other European markets, France is an important player in the global economy. France continues to be Europe’s foreign direct investment champion. With the EU’s ban on petrol and diesel cars in 2035, France also hopes to become Europe’s “battery valley”. The French economy consists of a number of critical sectors including energy, transport, manufacturing, technology, tourism, and agriculture.
Access to Skilled French Workers
ManpowerGroup's recent study revealed that a whopping 75% of businesses worldwide are struggling to find skilled employees. The solution? France has a great education system that is publicly funded and produces very skilled employees.
From grandes écoles to top-tier universities, skilled French workers have highly developed analytical skills. Studying quantitative subjects is highly encouraged, building strong mathematical skills ideal for tech and data roles for Canadian tech companies.
Quality and Creativity
The French are always searching for answers to “Why?”. This builds their creativity and inspires them to come up with leading solutions. They are able to engage and think about a challenge more broadly and can be very innovative.
In the Global Innovation Index 2022, France ranked 12th out of 132 economics for innovation output. The country prides itself on quality and puts up fierce competition against neighboring countries.
Language Proficiency and Cultural Ties
With Canada’s francophone provinces and a large bilingual population, France is a natural choice to make your company’s extension. France has been steadily climbing on the English proficiency index and your co-workers in France can easily liaise with your bilingual employees in Canada.
Understanding the Local Employment Laws in France
If you're looking to employ people in France, there are many advantages to consider, however, it might not be as easy as it seems. There are many employment rules and regulations that must be followed. Here are a few essential points to remember when you're looking to hire in France.
Differences Between Canadian and French Employment Laws and Culture
The Right to Disconnect
To avoid overworking and improve employee productivity, both France and Canada have the Right to Disconnect. However, this policy is implemented differently in the two countries.
In Canada, only Ontario has legislated the Right to Disconnect. The Employment Standards Act states that employers with a workforce of more than 25 in Ontario must have a documented policy that details employees' rights to not work beyond their scheduled hours.
France, on the other hand, was the first nation to formally launch Right to Disconnect legislation nationwide, leading the way in terms of work-life balance across the world. Since 2017, the French government has mandated that employers must enter into negotiations with unions to secure their employees' right to disconnect from technology once their shift has ended.
With teleworking, things could get tricky. To avoid misunderstandings, when you are hiring in France, employers should outline a telework arrangement that specifies how and when the employer can expect to be able to reach an employee during work days.
Portage Salarial
If you are a business looking to hire in France on a contract basis, you could hire a portage salarial to handle all the administrative tasks and more. While a portage salarial is unique to France, its tasks are similar to an Employer of Record (EOR).
Simply put, a portage salarial gives independent professionals the ability to take on temporary jobs while getting the legal benefits of having a boss. The benefits of this structure for employers include:
- Engage workers on a project-by-project basis without worrying about the legal obligations of hiring full-time employees. This is a streamlined approach to accessing specialized expertise and delegating tasks.
- Save costs. Companies don't have to pay for the benefits or overhead costs associated with traditional employment.
- Simplify administration. A portage salarial handles all administrative duties and payroll services.
- Scale flexibly. Employers have greater flexibility and global mobility when it comes to scaling their workforce in France up or down.
35-Hour Work Week
In February 2000, France adopted a labor reform policy that included a 35-hour workweek. Although Canada has a 40-hour workweek, the 35-hour workweek only applies to salaried employees. This does not apply to contractors you hire through a portage salarial.
The other exception includes managers (also known as cadres) who have different social security and pension plans. The legal limit for managers is 48 hours per week, yet this may be increased to 60 hours in rare cases.
Collective Bargaining Agreements
In France, collective bargaining agreements are widespread in many industries. This could have an impact on some aspects of your employment contract, such as trial periods or dismissal policies. Therefore, it is important to do your homework and find out what rights your employees have in your field.
On the topic of trial periods, the duration for indefinite contracts can range from two to four months. For fixed-term contracts, the trial period can be up to one month if the length of the contract is six months or more. This, again, depends on the industry you are employing in and what the collective bargaining agreement states.
Key regulations and obligations for employers
Establish a Legal Presence or Partner with an EOR in France
To hire employees in France, your Canadian company must establish a legal entity in France. This typically involves setting up a branch office, a subsidiary, or a representative office in a local jurisdiction. Each option has its own legal and tax implications, so it's recommended to seek legal counsel to determine the best approach for your company.
To register with various French government authorities, you'll need to obtain an identification number from the National Institute of Statistics and Economic Studies (INSEE) and register with the French Social Security Administration. Additionally, you must comply with your tax obligations by registering with the French tax authorities.
To skip all this hassle, seek an Employer of Record in France with knowledge of Canadian work culture, like Borderless. An EOR acts as a legal employer throughout the hiring process wherever you'd like to hire, ensuring compliance with local labor laws. Meanwhile, you take care of day-to-day operations without the need to set up a foreign entity.
Employment Contracts and Onboarding
It is important for employers to be aware of the various kinds of employment contracts regulated by French labor law, and how to work with them. Knowing the implications for both the employer and the employee is essential. Here are the three primary types of contracts in France.
- Permanent Employment Contract (CDI)
In France, the most common form of employment contract is the CDI, or permanent contract. This type of written contract guarantees a certain level of job security, as the end date is not specified. An employee under a permanent contract can remain in their position for as long as they would like unless they choose to leave, are dismissed by their employer, or come to a mutual agreement to part ways. The hours of work for this contract can be either full-time or part-time and are usually stated in the contract itself.
- Fixed-Term Contract (CDD)
This is a written agreement between a business and an employee, lasting for a predetermined amount of time for the purpose of completing a specific task, as per the applicable laws. It finishes up either on the agreed-upon date or when the job is done. In the absence of a precise term, the contract must outline the circumstances that will end this type of contract – such as the return of an employee from maternity leave, or the end of the season for seasonal jobs, etc.
This contract is used in these circumstances:
- To substitute an employee who is not currently present or is only working part-time
- To substitute for a new employee who is taking up the role but cannot start on time
- To keep up with company growth, seasonal employment, or nature of business activity
- To fill in for an employee who is awaiting a definite termination decision
When the fixed-term agreement is completed and no permanent contract follows, the employee is eligible to receive a precariousness bonus. This bonus is equal to 10% of the gross remuneration received during the contract; however, it can be reduced to 6% with a collective agreement in exchange for special access to professional development.
- Temporary Employment Contract (Intérim)
Temporary employment contracts are awarded to employees hired and paid by a temporary employment company (ETT). The ETT places temporary workers at companies temporarily. These contracts are only allowed to get precise and temporary tasks done in a limited amount of time listed by law.
Temporary employees are eligible for compensation for the instability of their jobs. This remuneration is equivalent to 10% of the entire income earned. They are further given a remunerative allowance for paid holidays.
Compensation and Benefits
As of 2023, French workers must be paid a minimum of €11.52 per hour and €1,747.20 per month, based on a 35-hour week. However, certain professions have their own wages set by sector regulations or collective agreements.
Additionally, for any extra hours worked beyond the standard 35-hour week, employees must be compensated at no less than 110% of their regular rate if overtime is in their employment contract, or 125% for the first eight hours and 150% for any further hours if not.
In France, employees are entitled to certain benefits, such as:
- Old-age pension
- Solidarity allowance for the elderly
- Long-term and short-term disability pension
- Spouse’s pension
- Death grant
- Workers Compensation
On top of this, the French are provided with basic health coverage by the government. Yet, many employers choose to add additional insurance to this. Additionally, employers in France frequently provide retirement and death benefits, short-term and long-term disability, career termination indemnities, and a 13th-month bonus.
Payroll and Taxes
The usual corporate tax rate in France is 25%. This rate is applicable to corporations that have formed a presence in the country. Furthermore, companies must cover payroll taxes at a rate of 31.3% of an employee’s gross salary. This includes:
- 13%: Health, Maternity, Disability, Death
- 8.55%: Old Age Insurance (ceiling of €3,311)
- 5.25% or 2.45%: Family Benefits
- 4.05%: Unemployment (ceiling of €13,244)
- 0.3%: Autonomy Solidarity Contribution
- 0.15%: AGS (Wage Guarantee Insurance)
Annual Leave
No matter if they are part-time or full-time employees, everyone in France is eligible to receive 30 days of paid vacation yearly that is accrued, as well as a paid day off for each of France’s 10 national public holidays.
For every month worked, all employees earn 2.5 days off. While a part-time employee has the same rights as a full-time employee if they work 35 hours. If they work less than a 35-hour week, annual leave is based on a pro-rated calculation.
The annual leave entitlement is calculated from June 1 to May 31. It is not possible to roll over unused leave into the following year.
As mandated by French law, employers are required to give workers vacation time between May 1 and October 31 too. During this time, they must take 12 consecutive days off.
Whether or not you are allowed to take any extra days outside of this period will be determined by the employer, so it is wise to check in with your employees before they make any travel arrangements. Unless otherwise agreed, employees cannot take more than 24 days in a row off, which is equivalent to a month.
Termination
In France, employers must provide severance pay when dismissing employees. According to the country's labor regulations, employers must pay a quarter of a month’s wages for each year of service for the first ten years of tenure. After the ten-year mark, one-third of a month's salary is due for each year of employment.
Hire in France with Borderless
By familiarizing yourself with the legal framework and your legal responsibilities as an employer in France, you can hire in France with confidence. Remember to consult with legal and HR professionals to ensure compliance with all local laws and regulations.
Expanding your business operations into new international markets can be an exciting endeavor, and France, with its robust economy and rich cultural landscape, is a prime destination for a Canadian company looking to become a global employer. However, navigating the intricacies of hiring a foreign national can be complex. Even so, with proper planning and understanding, hiring in France can be a rewarding experience for Canadian companies.
Borderless can help you set your company up for success in this vibrant European Union market. Successfully expanding your business to France is a breeze with Borderless’ deep understanding of the local country laws and regulations, many of which are complex and bureaucratic. Catch Borderless in action today.
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.
