Becoming an employer is a learning curve regardless of the country it happens. There many different aspects related to this part of being a business owner. I this article, we will focus on legal and administrative side of the matter, some basic terms and notions you need to master, and some general steps to take before employing your first team members – or shortly after. If you are taking over an existing business that has employees, this will also be useful – you cannot rely that previously everything was was in order, and you need to have some basic understanding of the playing field to be able to manage it.
Language #
I think it is extremely important for any employer in France to learn the French vocabulary related to employment law. This will help you communicate clearly with accountants, gouvernement agents, French employees and other parties involved in the process, such as insurance companies. I have tried to mention the most important ones in the brackets next to the general English terms.
Company size (Effectif) #
The French laws and regulations change depending on the company size. The main thresholds are:
- Less than 11 employees
- Less than 50 employees
- Less than 250 employees
- Above 250
You have crossed the first threshold once you’ve constantly had 11 employees or more over a period of 12 consecutive months. Part-time employees are counted proportionate to their working time compare to 35 hours per week. For example a person working 28 hours a week counts as 0.8 persons. If you also have another employee working 21 hours a week, that’s 0.6. Both make up 1.4 etc.
In this and most of the following articles I will base myself on the rules for companies employs less than 11 employees.
Regulatory sources #
The rules that must be followed by any given employer in France may come from a number of sources:
- International (International Labour Organization) – the rules are ratified by the individual governments and included into local legislation, as well as bilateral agreements
- European law – treaties (general direction), reglementations (rules to be applied directly by all members) and directives (general rules with an obligation to achieve the result, the means are left at discretion of each country)
- French law
- Constitution
- Labour code
- Jurisprudence (decisions taken by the courts)
- Collective agreements
- “Usages” – traditions in a given region or profession
- Proper to an organisation
- Collective agreement
- “Usage” – tradition, something that has been done on a regular basis (i.e. Christmas gift given to all employees every year). A change in tradition must be motivated and notified to employees in writing, otherwise the obligation continues.
- Unilateral employer’s decisions (i.e. choosing a certain company as mutuelle, or according a salary bonus)
- Employment contract and amendments
Hierarchy #
When different sources have different rules on the same subject, the natural hierarchy has generally the precedence – so international law is more important than national law. National law in turn is more important than collective agreements. For example, in a case where collective agreement minimum is lower than the national (can happen when national SMIC is increased, but a new convention has not signed yet), the national minimum is applicable.
However, principle of favour stipulates that if an inferior source offers employee a better condition, that takes precedence. Therefore, for example, an employment contract can propose a salary higher that the minimal one, but never below.
Exceptions to the hierarchy #
- In case of traditions and unilateral employer decisions, if a new collective agreement is signed, even with less favourable conditions, these become applicable by default
- Organisational collective agreement trumps the national collective agreement, even if it proposes to employees less favourable conditions, except in the matters of
- Minimum hierarchical salary
- Classification tables
- Professional egality between men and women
- Additional collective garanties (mutuelle, prevoyance)
- Risk prevention
- Employability of persons with disability
- Bonuses for dangerous or insanitary positions
Collective labour agreements (Convention collective) #
The collective labour agreement applicable to your industry (and sometimes you have regional agreements for certain industries) may impose different or additional measures than those defined by the labour law. All employers fall under at least one nation-wide collective labour agreements (convention collective) that apply to all businesses working in the industry (your APE code will determine that) by default. If according to your code several agreements can be applied, you must choose one that matches your principal activity most closely.
Make sure to get yourself familiar with your collective labour agreement and to follow the requirements. As mentioned above, the principle of favour is very important, and in many cases collective labour agreements have condititions that are better than the nationwide legislation.
Hierarchical minimum salary for example is often overlooked. Each collective labour agreement has it’s own hierarhical classification of positions, usually expressed in coefficients: the higher the qualification, experience etc required for a job, the higher is the coefficient (it must always appear in the contract, and as you promote employees, you should also apply new coefficients). Each collective agreement also includes the minimum salaty for each coefficient – the higher the coefficient, the higher the minimum salary, which can be slightly or significantly higher than SMIC. These minimas are updated regularly, following the increases in SMIC – so you need to be aware of that, too (a good payroll accountant will keep you informed, and will increase the pay of employees if needed accordingly)
Additionally, you may choose to become a part of trade union and adhere to its collective agreement.
Finally, you could create and sign a collective agreement specific to your organization.
Classification of the employees #
Very generally all staff of any company can be divided into three categories
- Directors (dirigeants – gerant for SARL, président for SAS) – people who have the legal power to represent the company, and also carry the legal responsibility. With regards to labour law they must ensure all required policies, procedure etc are put in place and maintained. Even if they don’t actively participate in a given event, by default they are responsible for the actions of their employees.
- Executive (cadre) – this is a very important distinction to know. Many employment-related rules are different, depending whether an employee is “cadre” or not – for example, their trial period is longer, their social coverage is better – so the social charges are higher, too; in some industries they may have to work extra hours without the supplement pay etc.
- The rest of employees.
As mentioned above, most collective agreements provide a more detailed classification. Every employee, except director must be assigned a qualification level (qualification) that is determined by level (Niveau) and coefficient (Coefficient). As the person progresses in their career, their qualification level goes up. The collective labour agreement describes in more or less detail how the qualification levels are determined and changed.
Different types of days #
In France number of days between two workplace events can be counted in three different ways:
- Calendar days (jours calendriers) – you count every day in the calendar
- Opening days (jours ouvrables) – days when an organisation can be potentially open. These are Monday to Saturday, except public holidays
- Company opening days (jours ouvrées) – the days when your organisation is open: for example 7 days a week, if you are open 7 days a week, Monday to Friday, or Tuesday to Saturday etc
Delivering written documentation #
In many situations it is required that a document is to be delivered to your employee in writing. In this case the document must be printed in two copies and signed by the director of the company. One copy is to be kept by the employer, and the other is for the employee. Employee’s copy is to be delivered to the employee in person (they then sign the employer’s copy saying they have received and the read the documents on a given date), or sent to them by recorded letter with acknowledgement of receipt (the proof of sending and receiving the letter are to be kept on file). Delivering a letter in person against signature is a more reliable method. If using LRAR, be sure you have both a very clear proof of sending, and you follow up on the delivery. Either you receive the delivery receipt, or the letter returns to you (both to be kept on file). If you don’t receive anything within 2 weeks of sending the letter, do track it online, and contact post office to receive and official delivery notice or a document stating that the letter wasn’t delivered and the reason. Do not put these off, as you might need them several years later, and it will be more difficult to follow up then.
When it is necessary to calculate ahead of time the date of delivery of LRAR (for example, to determine the date of a meeting that is being notified by the letter), it is considered to be the date of the first delivery attempt by the post. At the moment the post guarantees that the LRAR is delivered within 3 working days (Monday – Saturday, except public holidays). Beware that some post offices require that you hand over the LRAR to them quite early in the day to be considered as mailed on that date.
Proof of payment #
In my experience, it is not uncommon that past employees (or suppliers) contest receiving a payment. I recommend it to become a good practice to keep on file proof of any payments made. It is impossible to tell whether a relationship will go sour in the future, or when this may happen – and what the other side will come up with. This is also a safeguard against geniune mistakes.
- Cash payment – always get a written receipt that states the amount, the date, the reason of payment (invoice number, month of salary etc), the name of the person and signature
- Cheque payment – always get a written receipt that states the amount, the number of the cheque the date, the reason of payment (invoice number, month of salary etc), the name of the person and signature. If mailing the cheque, make a copy of the cheque, use LRAR to send and keep proof of delivery on file as well. When the cheque clears in the bank, note that in dossier as well. Please note, that what you have written on the stub of the cheque book is never considered to be a proof of payment.
- Transfer – download all transfer confirmations directly. The bank statements will not show the destination number of account, and these confirmations are only available online for 3-6 months. Banks charge high fees to research these afterwards and in my experience often fail to find them. Again, copies of bank statements only showing the name of the recipient are not acceptable as proof of payment.
