France attracts many foreign companies wishing to recruit local talent without necessarily establishing a legal entity there. The status of Entreprise Sans Établissement en France (ESEF) — a company without an establishment in France — makes it possible to hire French employees while remaining based abroad.
However, French labour law is known for its complexity and high level of employee protection. Before hiring, it is essential to master certain fundamental rules in order to avoid any legal and financial risk.
The Fundamental Principle: Application of French Law
As soon as an employee works in France, French labour law applies, even if the employer is a foreign company.
Hiring an employee in France therefore implies:
- Compliance with the French Labour Code.
- Application of applicable collective agreements.
- Compliance with local social and tax obligations.
The ESEF status only simplifies administrative procedures — it does not allow companies to circumvent French social law.
The Employment Contract: A Mandatory Framework
In France, the employment relationship must be formalised by a contract, generally in writing. The main elements are as follows:
- The nature of the contract (permanent contract — CDI — or fixed-term contract — CDD).
- Remuneration.
- Working hours.
- Position and duties.
Do not hesitate to seek the assistance of a local service provider to draw up employment contracts that fully comply with French law.
Working Hours and Overtime
The statutory working time in France is set at 35 hours per week.
Any hours worked beyond this threshold entitle the employee to an increased wage or compensatory rest. Specific arrangements also exist for certain professions or positions.
It is therefore particularly important to pay close attention to the working hours stipulated in the employment contract in order to avoid any issues in the event of an inspection.
Remuneration and Wage Obligations
Employee remuneration in France must comply with certain principles:
- The SMIC (statutory minimum wage).
- Applicable conventional minima (identifying the correct applicable collective agreement is a frequent source of error for foreign companies).
- Equal treatment between employees.
It should also be noted that, in addition to the gross salary, the French payslip includes social contributions and certain mandatory or optional benefits (meal vouchers, mutual health insurance, provident fund, professional training, etc.).
Social Protection and Contributions
Employing staff in France requires affiliation with French social security bodies, in particular URSSAF. This affiliation enables companies to obtain a SIRET number and pay mandatory social contributions (40 to 50% of gross salary), which cover:
- Healthcare.
- Retirement.
- Unemployment.
- Workplace accidents.
- Professional training.
For a foreign company, this step is crucial and can be complex without appropriate support.
Leave and Absences
Employees in France benefit from important entitlements:
- A minimum of 5 weeks of paid leave per year.
- 11 public holidays.
- Specific leave entitlements (maternity, paternity, sick leave, etc.).
These rights must be anticipated in human resources management.
Termination of Employment Contract
Ending an employment contract in France requires following a strictly regulated procedure.
Depending on the situation, this may take the form of:
- Resignation (at the employee’s initiative, with a notice period. No statutory severance pay is owed by the employer).
- Dismissal (at the employer’s initiative, for personal reasons — inadequate performance, misconduct — or economic reasons. Mandatory procedure: summons, preliminary interview, justified notification, etc.).
- Agreed termination — rupture conventionnelle (mutual agreement between both parties).
Reminder: a dismissal must always be justified by a real and serious cause, failing which sanctions will apply.
Administrative Obligations
Several mandatory administrative formalities are associated with hiring an employee in France:
- Declaring the employee (DPAE — prior declaration of hiring).
- Drawing up compliant payslips.
- Maintaining a staff register.
These formalities are essential to ensure compliance.
Why Seek Professional Support?
The ESEF status is an effective solution for recruiting in France without setting up a subsidiary, but it does not simplify the substantive rules of labour law.
Specialised support makes it possible to:
- Secure the hiring process.
- Save time.
- Avoid costly mistakes.
Are you looking to develop your business in France? Do not hesitate — contact Projinvest Services for all matters related to hiring employees and payroll management!