Global regulatory requirements are always complex and the current environment has challenged many organisations to rethink and prioritise their HR policies, compliance, global payrolls and flexible work arrangements.
In this short article we will focus on France, as a key European market for many international companies, and outline some important considerations when sending employees to the country for a temporary period of time.
In recent years France’s strategy has been to create a more attractive business environment for international organisations.
Although France has taken several initiatives to ease some of the regulations related to employment and tax, the country still holds a top place among the most complex jurisdictions in Europe from a HR and payroll perspective.
When employers post employees to France there is a general requirement to file a declaration prior to the event to the French authorities. The process intends to put in place a level playing field between home and host country employment legislation.
Based on the French labour legislation, employees temporarily posted there can benefit from the ‘core’ set of rules of French labour law. The core provisions generally regulate equal treatment, minimum wages, leave, expenses etc.
Furthermore, according to the rules related to posting, if the employment conditions of the employees are more favourable in the home country than in the host country, they should maintain these during the secondment.
According to the EU social security coordination rules, workers moving within the European Union must be subject to one country’s social security legislation and apply for a certificate of coverage in the country where the employer normally operates.
Similar procedures apply to countries outside the EU and where a so-called bilateral social security agreement between two countries is in place.
In this context France has concluded bilateral agreements with various countries outside the EU, including Argentina, Canada, India, South Korea and the United States. These agreements, as with the wider EU regulations, are put in place to protect and coordinate the various social security schemes and mainly the pension entitlements of persons.
An example of this could be a South Korean company that needs to send employees to France for a period of one year. Based on the social security agreement between the two countries the seconded employees can apply for a certificate of coverage in South Korea that would exempt them from social security liabilities in France.
However, it is always important to consider if any partial liabilities not covered under the agreement apply.
Social security considerations between the UK and France
The UK officially ended the free movement of persons between the EU and the UK as of 1 January 2021.
However, with regard to posted workers it has been agreed that transitional provisions can be put in place between EU countries and the UK in order to continue the posting of workers for certain number of years.
Currently, EU countries must agree to apply the so-called detached worker rules in order for them to apply.
In summary, before sending employees to France, employers should always consider:
- Posted worker requirements before the posting takes place
- Social security and immigration requirements
- HR policies related to mobile employees
- Payroll implications
Konstantin Joergensen, HRP consultancy at the TMF Group