As one of the most advanced countries in the world, France is an alluring region to expand into and engage local talent. But hiring employees in France requires a thorough understanding of French employment laws and payroll requirements to ensure compliance and avoid troublesome complications.
This guide outlines your options for hiring talent in France and the compliance risks to avoid.
How do I hire a foreign worker in France?
There are multiple ways to hire and pay workers in France, such as setting up an entity or paying contractors. However, it’s important to first understand the classification and employment laws in France.
An essential first step to hiring in France is classifying your talent as either employees or contractors. This classification status will determine your hiring method.
2 methods for hiring employees in France
There are two primary methods for hiring employees in France: Setting up a legal entity or partnering with an employer of record. The former requires a fair amount of independent research and long-term expansion goals, while the latter saves the business time and noncompliance fees.
Set up a legal entity in France
If your company has plans to create a permanent establishment in France, establishing a legal entity is an effective option for hiring employees in France.
Setting up an overseas presence in France requires time and in-depth research to ensure employment compliance. Entity establishment is also costly and requires a long-term financial commitment. This method is suited for businesses wanting to form a long-term presence and build a large team.
Once a company sets up an entity in France, a multi-country payroll solution is beneficial for running and managing payroll, especially for companies that have talent in multiple countries.
Partner with an employer of record
If your business is ready to expand into France but doesn’t want to invest or have the resources for entity establishment, partnering with an employer of record (EOR) provides swift country entry and the ability to hire employees.
An EOR allows companies to hire talent in a new country without having to set up a local entity. Beyond managing contracts and onboarding payroll, a global EOR also handles immigration and provides benefits for foreign employees.
An employer of record is a convenient choice for businesses looking to build a team in France and have the local expertise to guide them through evolving employment requirements.
Learn more: What Is an Employer of Record (EOR)?
Engaging contractors in France
Rather than establishing an entity or partnering with an EOR, companies may choose to target French talent by engaging them as contractors.
Hiring international contractors provides flexibility to work with talent for short-term or specialized projects, and it also saves companies time and money since they can avoid onboarding and paying contractors as employees.
However, engaging contractors in France often leads to worker misclassification. If French authorities classify your contractor as a full-time employee in accordance with French employment law, you risk facing financial and legal penalties.
Worker classification varies from country to country, but it typically depends on factors like the worker’s financial relationship with the company and the degree of control over their work. To avoid the risks and costs of misclassification, companies should consult a legal expert like an EOR to ensure compliance.
FAQs about hiring employees in France
Can a U.S. company employ someone in France?
Yes, a U.S. company can employ someone in France. Common solutions include partnering with a France employer of record to quickly and compliantly hire employees or engage French talent as contractors.
However, the risks of noncompliance in France are high. French employment laws have stricter employee protections when compared to other countries like the U.S. For example, an employee can only be dismissed in very specific circumstances and only after completing a regulated dismissal process.
Failure to adhere to French labor laws costs companies time, capital, and resources that are better spent growing their business.
How much does it cost to employ someone in France?
The costs for employing someone in France depend on how the worker is employed. Employees typically cost more and require a larger financial commitment than contractors due to payroll contributions, leave entitlements, and employee benefits in France.
However, engaging French talent as employees is a smarter long-term strategy as it reduces risks, fines, and business interruptions that come with contractor misclassification.
Learn more in our complete guide to payroll and tax in France.
Because of unfamiliar payroll contributions and tax, employment costs in France are difficult to forecast and budget without in-country expertise. This makes it critical for overseas businesses to seek a workforce partner that accurately calculates employee costs and compliantly navigates employment processes in France.
Confidently grow your team in France
France has a great reputation for business, but its stringent employment laws make it a challenging country to expand into and engage talent. Fortunately, an experienced partner like Velocity Global can simplify the process.
Our global Employer of Record (EOR) solution helps companies hire and pay top talent in France and over 185 countries without having to establish entities. We handle onboarding, payroll, benefits administration, compliance, and HR support on your behalf so you can focus on running your business.
Contact us today to start hiring top talent in France with ease.