Happy and satisfied employees make your business thrive and lead to even better profits. However, the specifics of employee benefits in France might not all be familiar to you yet. When expanding your company’s presence in a new country, you must ensure compliance with your employment contracts and benefit guarantees.
These involve social security contributions, sick leave, health insurance, and unemployment, to name a few. In France, benefits can be guaranteed by labour law, national legislation, and collective agreements with trade unions or workers’ councils. Our guide will explain what benefits and employee compensation are guaranteed and what can be modified for any employer who wishes to expand their business into France.
Collective and trade union agreements ensure that employees are treated equally in their respective industries and economic sectors. In France, there are around 300 collective agreements covering over 90% of the workforce, and they supplement minimums stipulated by the Labour Code. Compensation laws generally apply to holidays, sick leave, maternity benefits, minimum wages and more. Agreements cannot undercut minimum compensation levels laid down by national laws where they apply. These include:
Social Insurance: Social insurance in France is organized by national, regional, and local institutions supervised by the Ministry for Solidarity and Health and the Ministry of Economy and Finance.
Around 80% of the general scheme’s total revenue derives from social security contributions and taxes employers and employees pay. Mandatory withholdings for social security include the General Social Contribution (CSG) and the Social Debt Repayment Contribution (CRDS), which deduct tax from income earnings, property, investments, and gambling. Foreign tax residents must also pay into the social security system to be eligible for certain benefits, including healthcare, maternity and paternity allowances, sickness benefits and supplementary pension schemes.
Redundancy, Termination, Severance: Dismissals, terminating contracts and redundancies in France are regulated to protect the employee. In France, there is no such thing as a ‘summary dismissal’ or being ‘sacked on the spot’. The French Labour Code dictates that the employer must have a ‘justifiable cause’ for termination and follow the proscribed procedures. Redundancy for employees or groups of employees can be justified for economic, technological, or business reasons. Under the French Labour Code, these reasons must be verifiable as not relating directly to the employees.
Severance pay is 25% of the month’s salary for each year up to 10 years of employment and 33% for each month’s salary over ten years of service. Notice is one month between six months and two years of service and two months for more than two years of service. Notice periods are generally governed by the French Labor Code and collective agreements, particularly regarding fewer than six months of employment.
Working Hours and Breaks: Working hours should not exceed 35 per week or 44 on average over 12 weeks. The ‘office day’ is often from 8 or 9 am until 12/12.30, then 2/2.30 to 6 pm. The Labour Code stipulates that weekly working hours over 35, or 1,607 annually, are overtime. Employees receive a minimum 20 minutes’ break after six hours of work, with 11 hours of unbroken rest between shifts and 35 continuous hours of rest every seven days.
Sick Leave: Employees unable to work through illness or injury qualify for daily payments from the social security system, with the employer legally required to make up the difference as per the Labor Code. The benefit is paid from day one of incapacity for work-related illness or injury or from the eighth day in other cases and cannot exceed 90 days. Employees receive 90% of their salary for the first 30 days and two-thirds for the next 30, with qualifying periods increased by ten days for every five years of service.
Holiday / Vacation Leave: Paid annual leave totals five weeks after completing one year’s employment, with collective agreements covering entitlement for less than one year’s work. The full entitlement is two-and-a-half days each month to a maximum of 30 days. Labour Day is the only mandatory public holiday in France; employees who have to work earn ‘double time’. There are a further ten statutory public holidays.
Maternity / Paternity Leave: Leave totals 16 weeks, with at least ten taken post-natal and eight weeks the mandatory minimum total. Leave can increase to 26 weeks for a third child, 34 weeks for twins and 46 for triplets. Maternity benefit equals average salary over the three months before birth (with a quarterly cap of €10,131, US$11,920) as long as the individual worked a minimum of 150 hours over the previous three months.
Paternity leave increased to 28 days from July 1, 2021, with salary paid for three days by the employer and by social security for the rest. Seven days are mandatory. For multiple births, 32 days of leave is allowed. Adoptive fathers can also apply. The co-parent has up to six months to take the leave and must have worked at least 150 hours in the three months preceding leave to claim benefits. of is
Parental Leave: Leave starts from the end of maternity leave at six months for one child and up to three years for two or more children. In this case, either parent can receive a benefit for 12 months, but the remaining 12 months are paid only if the parent stops working or sufficiently reduces their hours. The benefit depends on income and length of employment.
Negotiating employee benefits is a complex process for employers in France. The mix of mandatory regulations, collective agreements and individual contracts create many compliance issues. Compensation, benefits, social security contributions and health insurance must be attended to swiftly and efficiently to ensure a smooth transition for your staff. Get ahead of these issues by working with Bradford Jacobs’ Employer of Record (EOR) services.
The Ministry for Solidarity and Health and the Ministry of Economy and Finance administer social insurance in France. It covers benefits for all salaried workers in the private sector through a network of national, regional, and local institutions and consultation with employers and employees. Around 80% of revenue comes from contributions and taxes calculated on percentage rates from employers and employees. The system covers maternity and paternity benefits, unemployment pay, sick leave, workplace accidents and family benefits. Contributions to the funds are based on percentages of total earnings, as follows:
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