Learning about your France hiring options is one of the first steps in establishing a global strategy for operations in Europe. France has the world’s fifth-largest economy and has plenty of opportunities for businesses in its competitive market. It’s a great location for companies considering international growth (visit our France International PEO page for a complete guide to hiring in the country).
Let’s look at your firm’s options for hiring in France because getting a great team on board is a key factor to finding success overseas.
Types of Employees
In France, there are four classifications of workers, which include:
- Agency Workers
- Independent Contractors
As an employer in France, you could find yourself hiring team members in any of these categories. There are key differences between employees and self-employed workers, which we will explore in this article. As far as an overview of each type of worker in France, let’s briefly break it down.
Employees under a contract of employment are subject and entitled to all statutory rights established by the Labour Code in France. Agency workers are employed by companies and work for companies on a temporary basis. Think of these types of employees as an outsourced talent that you would find through a staffing agency. Self-employed and independent contractors are similar in that they both work without a contract of employment. These classifications of workers have no entitlement to statutory employment rights and work for more than one client.
France Hiring Option: Independent Contractors
Tapping into the self-employed workforce is a common option for international employers, but it’s filled with many traps. In general, if you decide to hire contractors in France to perform work for your company, they must be autonomous. Make sure that your contractor can answer yes to the following questions:
- Do you have control to work the way you want, free from supervision?
- Are you establishing your schedule and hours?
- Do you pay for your supplies and assistance?
- Are you only paid for the work performed?
- Can you, and do you, have other paying clients?
- Do you market your services to the public?
If a contractor can answer yes to those questions, they should be working autonomously. If they are not autonomous and work under specific supervision and schedule, they will most likely be classified as an employee.
An independent worker is a person who provides services to another party in an independent and non-subordinate manner. If the existence of a superior-subordinate relationship between the parties exists, you may face issues in French labor courts. If courts find that there is an employment relationship, it will order that an employer pays all back taxes and benefits withholdings.
Plus, if you do not have a legal presence in the country, your company will face expensive fines and penalties. Avoid these traps if possible by learning about the risks of hiring independent contractors before you get involved in these relationships.
France Hiring Option: Establish a Presence
If you want to hire employees, you’ll need a presence for your business in France. You’ll have a few different options, which include setting up a:
- Representative Office
- Local Branch
A representative office is an establishment in France that is not separate from the parent company. Companies can use this option to observe the local market and explore opportunities without having a trading purpose. Do note, there are restrictions to this option. A representative office cannot conduct commercial operations and cannot contract with other companies for or on behalf of the parent company.
A local branch is a permanent establishment that is not a separate legal entity of the parent company. It allows a foreign company to conduct business operations in France through a non-distinct legal entity and does have French accounting and tax requirements.
Finally, companies can establish a subsidiary, which is a separate legal entity from their parent company. This option gives the foreign company complete control of operations, but it’s also a large commitment for businesses. Subsidiaries are subject to all legal, accounting, and tax obligations in France and are costly and timely to set up.
France Hiring Option: Use an Agile Approach
Businesses can test the market in France with a legal presence by using an agile approach to global growth. Services including International PEO (Professional Employer Organization) and Foreign Subsidiary as a Service (FSaaS) are two employer of record methods (EOR) that manage all of the complications surrounding hiring overseas.
Benefits of International PEO and FSaaS include:
- Cost & Time Savings
- Compliance Maintenance
- Hiring & Firing
- Work Permits & Visas
Contact us to learn how using EOR options can help you access international markets like France quickly and inexpensively while keeping compliant.