You would like to settle in France with your company and are planning to hire new employees. But what do you need to consider? What are the employment contracts in France and what are the salaries?? We have compiled some important information for you on what you as an entrepreneur should bear in mind in terms of labor and social law in France.
The French employment contract is available in the following versions:
- permanent employment contract (Contrat A duree indeterminee, CDI)
- fixed-term employment contract (Contrat A duree determinee, CDD)
- Temporary employment contract (Contrat de travail temporaire (interim))
- part-time employment contract (Contrat A temps partiel)
- Employment contract for intermittent employment
2. What to look out for in terms of social security in France
In France, every employee is subject to social insurance. Social security covers all health care costs (e.g. medicines, hospitalization, dental prosthesis). In addition, the employee is insured against work interruptions (illness, maternity, occupational diseases).
With social security there is an employee and an employer contribution. Family benefits and contributions in case of accidents at work are paid by the employer.
Employees who do not come from the European Economic Community (EEC) are subject to the respective residence regulations (residence and work permit).
In France, the so-called dynamic minimum wage SMIC (Salaire Minimum Interprofessionel de Croissance) guarantees each employee a minimum remuneration of. Once a year, this minimum wage is adjusted to the current economic and cyclical situation.
Accordingly, the employer must comply with the following provisions:
- SMIC hourly rate = monthly gross amount of 1 709.28 euros since the 1. January 2023 (at 35 hours per week)
- Minimum wage established for the company for the industry according to the collective agreement
- Professional classification, which is guaranteed by the collective bargaining agreement
- Wage guarantee that applies to companies that have moved to the 35-hour work week
- equal pay for men and women
- Overtime Act
- allowances for night, Sunday and holiday work, which may include. those provided for by collective bargaining agreements
You will find more information on French labor law and u.a. also sample employment contracts on the French government site: travail-emploi.gouv.fr
More information on social security contributions in France:
4. What to know before hiring new staff in France
The costs paid by an employer to an employee do not only consist of the salary. In fact, the total cost of an employee includes the gross salary plus employer contributions and other charges such as training costs, mileage allowance or bonuses, and minus payroll taxes, the rate of which is set each year by decree.
Total cost of an employee to a company
Before thinking about hiring a new employee in France, it is essential to know the total cost of an employee, as this has a significant impact on a company’s budget, so it is important to have an idea of this. These total costs are not limited to salary or. The employee’s salary, but also include direct and indirect costs.
Thus, to calculate these costs, one must include both the employer contributions, the payroll contributions, the salary itself, the hiring costs, the training costs, the equipment costs (computer, office, office supplies, etc.), and the.), special bonuses and any professional expenses reimbursed by the employer (travel expenses, ticket restaurant, etc.).) take into account.
The total cost for an employee is therefore the same:
gross salary + employer’s contributions – social security contributions + other costs and premiums mentioned above
Cost of an employee: employer contributions
The costs paid to an employee include his salary and the corresponding employer’s contributions. The employer must pay the employer’s contributions, which are calculated on the gross salary of the employee.
The employer contributions are social contributions paid by the employer to the Urssaf or the MSA (for agricultural activities).
Employer contributions include:
- contributions for sickness, maternity, invalidity, death and old-age insurance
- contributions to unemployment insurance
- contributions to the supplementary pension scheme
- the APEC contributions for executives
- the contributions for child benefits
- the contributions for accidents at work
- the contribution to the self-employment insurance
- the contribution to the social dialogue
- the contribution to the national fund for housing promotion
- the contribution for the wage guarantee insurance
- the mobility payment
- the social lump sum
- the apprenticeship levy
- the wage tax
- the contribution to vocational training
Cost of an employee: Employee contributions
The cost of a worker in France is equal to his gross wage plus employer contributions minus employee contributions. Indeed, the employee contributions are borne by the employee, so they are deducted from the gross salary by the employer and then paid to the Urssaf (the French social security) or the MSA (agricultural social security).
The employee contributions are as follows:
- Sickness insurance, maternity insurance, death, disability
- Old age insurance (pension from the general system)
- CSG (Contribution Sociale Generalisee / General Social Contribution)
- CRDS (Contribution au Remboursement de la Dette Sociale / Contribution to the repayment of the social debt)
- Unemployment insurance for all workers under 65 (a special solidarity contribution applies to workers 65 or older)
- APEC (Agence pour l’Emploi des Cadres / Agency for the Employment of Managers)
- Contribution Agirc-Arrco
- Contribution for the general equilibrium (CEG), which has been in force since 1. January 2019 replaces the AGFF and GMP contributions
- Contribution for the technical equilibrium (CET)