AN employee resident in France, of whatever nationality, must generally have a written service agreement or contract of employment.
Virtually all contracts of employment are for an open term (contrats à durée indéterminée or CDI), but the past few years have seen specific short-term contracts (contrats à durée déterminée or CDDs) become common practice.
These are subject to stringent conditions, vary in length, may not be renewable more than once and usually entail a one-off bonus at the end of the contract meant to make up for the lack of job security (prime de précarité).
A major legal distinction exists between Cadres (Executive level employees) and Employés (non Executive level employees) and it should be noted that the French legal translation of the English word ‘employees’ is salariés and not “employés”.
Employment law provisions are laid down by codified statute (Code du Travail).
Collective bargaining agreements (Conventions Collectives) are widespread and in many specific industrial or commercial sectors are very often binding upon employers.
Provisions of Collective Bargaining Agreements or In-House Company regulations, which are in conflict with Statute Law generally, nevertheless prevail if in favour of the employee.
Legislation put the standard French working week at 35 hours, having been reduced from 39 hours.
This legislation was consistently “watered down” in 2003: it is now possible for companies to keep employees’ working time up to 39 hours (or more) per week, for a negotiable extra cost.
The manner in which working time is calculated is not necessarily locked into the time-frame of the working week and may be based for example on days per year or hours per month, as well as hours per week.
The range of options open to an employer will depend in particular on the extent to which the collective bargaining agreement contains provisions governing working time.
The pay rate for overtime work hours is left to collective bargaining but must exceed the regular pay rate by 10% at least.
An employee may not work more than 180 extra hours per year in the absence of a Collective Bargaining Agreement.
There has been a statutory minimum wage (Salaire Minimum Interprofessionel de Croissance - SMIC) since 1950.
When the cost of living index rises by 2% or more in a year, the minimum wage is increased.
In practice, the minimum wage rises every year, usually in July. The SMIC currently stands at €8.44 (gross - “brut”) or €6.63 net per hour, or €1,280.07 per month gross, and €1,005.37 net pay.
Wages must be clearly stated in the employment contract, which may also include salary reviews, planned increases, cost of living rises etc.
If a bonus is paid, such as a “13th month”, it must also be stated in the contract: most French employers pay their employees a bonus in December known as the 13th month’s salary.
It is not mandatory unless it is part of a collective agreement (conventions collectives), but is almost universal and quite often taken for granted.
When negotiating a salary, remember to say whether the salary referred to is over 12 or 13 months.
Companies with 50 or more employees must have a Comité d’Entreprise (enterprise committee) comprising elected employees.
The company pays an amount equal to 1% of its overall payroll into the Comité’s fund, a budget then used at the discretion of the elected employees to provide benefits to all staff.
The employer is not required to deduct income tax from his employees pay cheques: personal income tax returns are filed by the taxpayer under his or her responsibility.
The employer, however, must withhold social security and similar contributions from the employee’s pay cheque.
The taxes that businesses are subject to are social security contributions, which are levied on gross salaries at 35 to 45% for the employer and 14 to 20% for the employee.
A separate general social security contribution is levied on all income at a rate of 7.5% in most cases.
A social debt repayment tax is due on all income at the rate of 0.5%.
A specific local business tax, known in French as the Taxe Professionnelle (T.P.), is due by all French business entities, whether they are companies or individual undertakings.
It falls upon the employer to declare and remit the relevant sums each month to the body URSSAF.
