Growing companies often turn to talent abroad to build out their capabilities. Hiring independent contractors can be an advantageous approach for many companies that need specialized skills or assistance for temporary projects. Learning about the laws surrounding this worker type will help you ensure compliance.
Hiring independent contractors in France
As in many other countries, French independent contractors come with specific conditions. Abiding by this legal definition is essential to avoid penalties.
Independent contractors vs. employees
Three factors signify an employment contract — discharge of tasks, remuneration, and a subordination relationship. Independent contractor relationships can also include discharge of tasks and remuneration, but the difference between these worker types is the relationship of subordination.
The French Supreme Court recognizes three aspects of a subordination relationship:
- Performance of duties under employer’s authority
- Employer’s ability to monitor the execution of duties
- The power to punish subordinates for breaches of duties
An independent contractor relationship will not include this subordination, meaning they will have the freedom to execute duties as they see fit. Employers may define the task or project at hand, but they may not monitor performance, define working hours, require a specific location for conducting work, or penalize contractors over the course of project completion.
Penalties for misclassification
If an employer misclassifies an employee as an independent contractor, they will be required to change employment status, provide minimum benefits, and pay a severance package. In addition to these penalties, an employer may have to:
- Pay retroactive salary, social security contributions, and taxes with interest
- Pay additional bonuses or overtime
- Face “Shadow Employment” charges with up to three years in prison and a hefty fine
- Be banned from hiring independent contractors for up to 10 years
How to hire independent contractors in France
The contractor hiring process should involve three key steps.
1. Carefully conduct interviews
When searching for independent contractors to hire, ensure you clearly specify this need in the job advertisement. Applicants should understand what type of position they’ve applied for.
While employee interviews typically involve questions about character and company culture, contractor interviews should focus on experience and skills. These professionals are not permanent hires, but they must be qualified to complete your project.
2. Create a service agreement
Your agreement with an independent contractor will not be an employment contract, but you will create what the law recognizes as a works contract. Your agreement should include:
- Scope or description of the project
- Pay rate and associated arrangements
- Termination policies
3. Introduce necessities
Training can be a challenging aspect to address with independent contractors. If it’s too in-depth, it may allude to subordination or telling the contractor how to conduct their duties. Independent contractor training should act as a brief introduction to anything the professional may need while working with you. These necessities may include general workflows and any employees they may interact with over the course of the project.
How to pay independent contractors in France
Independent contractors typically receive a lump sum for completing projects, but payment arrangements can be determined in your agreement. Some independent contractors may offer an hourly rate for their work. Employers are not required to make social security contributions or tax payments on behalf of contractors. Self-employed individuals make these payments independently.
Terminating independent contractors
French employment law does not recognize any form of protection against termination for independent contractors. Instead, termination in these cases relies on commercial law with a services agreement. Both parties should respect any notice period defined in the works contract. Employers should include any other termination policies in the service agreement.
Turn to Globalization Partners when hiring independent contractors in France
As an extension of Globalization Partners’ Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere, for both short- and long-term projects. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.