best practices for compliance in france - expat partners · thank you 39...

Best Practices for compliance in France12TH SEPTEMBER 2017

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Copyright Expat Partners / Audit CPA / MS Avocats. All rights reserved.

Speakers

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Fiona MougenotManaging Director, Expat Partners +33 (0)1 45 00 05 80 [email protected]

Sarah Mustapha Founder of MS Law Firm +33 (0)1 84 16 33 73 [email protected]

Erica Pierre-LouisPayroll Expert, Audit CPA

+33 (0)1 53 64 54 54 [email protected]

Immigration

Employment law

French social security / Pay slips


Best Practices for compliance in France

This publication may not deal with every topic within its scope

nor cover every aspect of the topics with which it deals. It is

not designed to provide legal or other advice with regard to

any specific case. Nothing stated in this document should be

treated as an authoritative statement of the law on any aspect

or in any specific case.

Action should not be taken on this document alone. For

specific advice, please contact a specialist at one of our

member firms. The content is based on the law as of 2017.

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Introduction

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▪ Increase in the number of foreign employees on assignment in

France (+ 25 % in 2016)

▪ Increase in French labour inspection audits

▪ Increase of the foreign employer’s and host company’s

obligations

▪ Employment of foreign workers in France remains complex


I. Prior to Entry to France

CATEGORIES OF PERMITS

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LONG

TERM(Schengen

ruling over 90

days over a 180

day period)

Talent Passport –“Salarié en

Mission”

Talent Passport –European Blue Card Permit

ICT Detachment

Temporary Detachment –as a Service Provider

Temporary Detachment

– as a Service

Provider

IT Expert –on Detachment

SHORT

TERM (Schengen

ruling 90 days

over a 180-day

period)



Definition of an employee on detachment in France under

French law

Employee on “detachment” in France = employed by a company

located outside of France working for a limited period of time in

France - under conditions :

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Employment contract not in France, with home country employer

Employment contract maintained during assignment



SHORT TERM

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IT Expert – on Detachment –No Work Permit

Expert = 5 years’ minimum experience + degree + salary level of an expert

Assignment to provide services as an expert

Detachment status = home country employment contract, assignment letter

Working on client site = Service agreement

Reporting line to home country management

No extension

IT Expert – on Detachment – No Work

Permit



SHORT (LONG TERM)

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Detachment status = home country employment contract, assignment letter

Service agreement


No extension

Long Term: maximum 3 years – Temporary by Nature

Temporary Detachment – as a Service

Provider


I. Entry / Hiring in France

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Provident pension scheme

Pension scheme / Certificate Of Coverage

(COC)

Medical visit

Single register staff

Pre-recruitment declaration (DPAE)



Compulsory Mentions / Information

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Employeeinformation

• Name

• Surname

• Date and Place of Birth

• French Address

• SS N°

• Job Title

• Position

• Seniority

Company information

• SIRET N°

• APE Code related to the main activity

• URSSAF N°

• Collective Bargaining Agreement

• Address



Employer’s requirements for Employee’s on

Detachment:

▪ Prior detachment declaration

▪ Designation of a Legal Representative

▪ Transfer of documents to the French host company’s onsite HR

Onsite HR Manager required to enter the employee on the

company’s personnel register

Legal Representative - role

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Detachment category - Types of assignments

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Service agreement between a foreign company and a customer located in France

Intra-company / group transfer of employees

Temporary employment agency located outside of France

On behalf, and for the benefit, of the foreign employer “Home Country entity”



Detachment of an employee to a client site

to provide services:

▪ MSA / SOW / Work Order / Contract for

services

▪ Signed between the “home country”

employer and the client in France

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Service agreement

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Main characteristics:

Defined mission /specific tasks

Equipment & materials required: provided by foreign company “home country employer”

Foreign company “the employer” has an obligation on results in performing the service agreement

Fees for work based on service delivery not on the number of hours or days worked by employees

During onsite assignment/service delivery, foreign employer supervises & pays employees on detachment (never customer)


I. Entry in France

Temporary/Permanent Activity:

▪ Temporary activity FR rules for detachment of

employees are applicable

▪ Permanent activity (done in a usual, stable and

continuous manner) FR rules for detachment of

employees are not applicable

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LONG TERM

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Minimum 3 months’ employment within the “group”

Employee on detachment

French social security

Maximum 3-year permit cannot be extended

May not work on a client site


ICT Detachment

(also possible short term)



LONG TERM

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Minimum 3 months’ employment within the “group”

Employee transferred to French employment contract :- Fixed term “contrat à durée déterminée” CDD - maximum 18 months

- Indefinite period « contrat à durée indéterminée » CDI- Full French social security – French payroll

Maximum 3-year permit can be extended

Talent Passport – Salarié en

Mission (also possible short

term)



LONG TERM

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For high level employees

Employee is hired by the French entity

4 year permit can be extended

Talent Passport –European Blue Card



French Employment contract – Employee on an

intra-group assignment:

▪Characteristics Fixed term contract – “Contrat à

durée déterminée” CDD

▪Characteristics Indefinite period contract – “contrat

à durée indéterminée” CDI

▪Rotation of the employees

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Local Employee :Full French Contributions

Employee Contributions are about 25%

Employer Contributions are about 45%

Employee on Detachment :with a COC (Indian Pension

Contributions) Social Security bilateral agreement France/India

Employee Contributions are about 15%

Employer Contributions are about 25%

Local Employee vs Employee on Detachment


II. During the assignment

Employees on

Detachment

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Post arrival • “Temporary Detachment” - OFII • “ICT Detachment”

• OFII for assignments up to 12 months • Préfecture for assignments over 12 months

May travel in and out of France during the validity of the visa if “MULTI” entry visa

Time sheets showing “working hours”

Time sheets signed by the employee + home country manager

Legal representative – maintains copies • Payslips • Signed time sheets • Justification of the payment of the salary

If extension: PDD and legal rep letter to be filed



Employees - Talent Passport – Salarié en Mission” & Talent

Passport European Blue Card permit

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Assignment up to 12 months – VLS-TS: Post arrival OFII

May travel in and out of France during the validity of the visa if “MULTI” entry visa

Assignment over 12 months: 3 month “D” visa - Post arrival Préfecture

May travel during the validity of the visa, after which can travel with permit “Titre de Séjour”

Change of address notified to the Préfecture for an employee holding a Titre de Séjour



Application

of certain

French

mandatory

rules by the

foreign

company

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Individual and collective freedoms

Right to strike

Working-time, days off, annual leave, maternity leave, paternity leave

Minimum wage including the compensation for supplementary hours, payslips

Rules relating to health & safety

Rules relating to discrimination, equal rights between men and women

Rules relating to illegal work



Possible sanctions

related to irregular

assignments of

employees in

France

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Criminal penalties

Administrative penalties

Suspension of the service agreement for a

maximum of 1 month



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Collective bargaining agreement « Syntec » applicable to IT industry

Employer can pay above but not below the minimum wages as per « Syntec » (separate hand-out)

Focus on the Salary



Syntec - Minimum Monthly Gross Salary (applicable since July 1st, 2017)

Working time

35h/week

RESPONSABILITIES OF THE EMPLOYEE POSITION LEVEL 151h67

Junior - Engineers (technical or administrative staff) 1.1 95 1 948,45 €

Junior Graduated 1.2 100 2 051,00 €

2 years practice + less than 26 years old 2.1 105 2 153,55 €

2 years practice + from 26 years old 2.1 115 2 358,65 €

Engineer (between 2 and 4 years practice) 2.2 130 2 666,30 €

Engineer or executive having at least 6 years practice 2.3 150 3 076,50 €

Engineer or executive under the orders of a manager, large practical knowledge

3.1 170 3 473,10 €

Engineer or executive supervising/controlling the work of employees 3.2 210 4 290,30 €

Engineer or executive supervising several services, large responsabilities

3.3 270 5 516,10 €

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• Salary or additional compensation

• Bonuses, benefit in kind

• Regular extra hours

Included in

salary:

• Exceptional bonuses not guaranteed

in the contract

• Expenses reimbursement

• Travel allowance

Excluded

from salary:

• Cannot be deducted from salary

• Excluded from the salary to

determine the minimum wage

Travel /

accommodation

costs



▪ Issued monthly

▪ Net salary must be paid at least once a

month.

▪ Employee must receive the pay slip in

person, by post or electronically

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Legal working time 35 hours (= 151.67 monthly hours)

Maximum working hours per day 10 hours (12 hours if it is planned by a company agreement)

Maximum working hours per week 48 hours on the same week, limited at an average of 44 hours on 12 weeks (46

days on 12 weeks if it is planned by a company agreement)

Mandatory break time 20 minutes of break after 6 consecutive hours (30 minutes for the underage)

Minimum rest time per day 11 hours

Minimum rest time per week Cumulative 24 consecutive hours to 11 hours of daily rest time, then 35 hours (

exemption provided by collective agreement)

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Summary legal French working hours



Extra Hours Worked

▪ Extra hours = hours worked after the legal working time of 35

hours

▪ Calculated on a weekly basis

▪ Extra hours are increased or recovered with time off

▪ The increased rate fixed by Collective bargaining agreement

(SYNTEC) :

▪ The first eight hours increase of 25%

▪ Starting at the 44th hour an increase of 50%.

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Vacation Paid Leave

▪ Employee entitled to 25 Vacation days paid per period of 12

months i.e. 2.08 Vacation Paid Leaves per month

▪ Reference period is from June the 1st Year N to May the 31st

Year N+1

▪ May be taken until May the 31st, Year N+2

▪ After which vacation days are “lost”

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Maternity Leave

Paternity Leave

Public Holiday

Solidarity Day

Sickness Leave



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Transport Cost

▪ Employee 50% travel cost reimbursement by the employer

▪ Public transport subscription proof

▪ Optional support in case of own car use

▪ Compulsory mention on the Payslip



Social contribution payments

▪ Each month if company with +9 employees

▪ Every quarter if company -9 employees

▪ Payment must be made the 15th of the month

▪ If the employer has a French bank account: automatic debit procedure

▪ No FR bank account employer international wire

▪ Payroll provider we make payment on our behalf of employer

▪ In case of late payment, penalties 10% of the total amount due

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Pay slip presentation

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III. End of assignment

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The employee must leave France at the end of the assignment

Risk to the foreign company

What to do if the employee refuses to return to his/her home country?



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• The payroll is cut off

• Ending deputation

• Ending French employment contract

• Talent Passport employees / “Salarié en Mission” / Local French status no French unemployment benefits



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• No mandatory deregistration

• To ensure permits are not “misused” we advise that these are returned

• When employee returning to India to reapply for a new category permit must be returned first

Thank you

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[email protected]@expatpartners.com

mailto:[email protected]

mailto:[email protected]

best practices for compliance in france - expat partners · thank you 39...

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