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Employee Benefits In France
The French employee benefits system consists mainly of leave entitlement and insurance benefits.
An insight into mandatory employee benefits in France.
Nowadays, potential employees will not only consider the salary. Benefits are an essential part of the compensation package. In France, some benefits are mandatory, others are optional.
Very common optional benefits are meal vouchers and corporate fitness programs. Less common optional benefits are vacation vouchers on top of paid time off. Some employers offer additional retirement plans, notably to executive level staff. You might have to consider optional benefits in order to attract and retain talent. A solid employee benefits package can set your company apart from the competition.
To be compliant in France, you will have to offer at least the mandatory benefits. These benefits consists of leave entitlements, for instance for vacation and sickness, as well as insurance benefits, such as the health care, unemployment insurance and state pension.
As a foreign employer, it is recommended to familiarize yourself with these employee benefits in France.
Paid Time Off in France
Paid time off is an essential part of the compensation package, with a direct contribution to the well-being and work-life balance of the employee. It includes legal paid vacation days, public holidays and additional days for family events.
In many European countries, the minimum vacation entitlement is between four to five weeks. This might seem significant, especially when compared to countries such as the U.S. with no legal minimum and Canada where employees commonly are entitled to two weeks.
In France, employees are entitled to a minimum of five weeks of paid vacation under French labor laws. However, additional days exist for some contract types which can significantly increase the leave entitlement.
5 weeks of paid vacation benefits by law
Based on a 5-day working week, a French employee acquires 2.08 vacation days per month. This corresponds to 25 days, hence 5 weeks for a whole year.
The number of days might be shorter in the event of absences. However, only certain absences authorize a cut of the vacation days. In some cases, employees continue to acquire vacation days even if they are absent, so in the event of a maternity leave.
One particularity of French vacation benefits is the reference period. In most countries, the vacation year runs from 1 January to 31 December. In France, it runs from 1 June to 31 May. However, many international employers fix a different reference period by company agreement in order to harmonize the vacation provisions company-wide.
Another particularity is the indemnity for paid vacation. In France, in some cases employees receive an increased payment during their paid time off. This is due to variable salary elements such as commissions that have to be taken into account on a prorata basis. Foreign employers should be aware of it in order to take this into consideration when negotiating the salary.
It is important to maintain report of all taken days for the event of a dispute between the employee and employer. The acquired and taken days, as well as the balance are mentioned on the bottom of the French payslip.
Additional vacation benefits for split of main leave
In France, traditionally, employees take a longer break in summer. They are actually entitled by law to take four of their five weeks between 1st of May and 31st of October. Furthermore, two of these four weeks must be taken consecutively.
If this is not respected the employee acquires additional leave, between 1 and 2 days.
Additional vacation benefits by branch agreement
Some branch agreements provide for additional vacation days. This is often based on the seniority.
For instance, employees under the Collective Bargaining Agreement SYNTEC receive between one and four additional vacation days based on length of service.
RTT days in France
France has a reputation of being one of the most generous countries for paid time off. This reputation might be due to additional days referred to as ‘réduction du temps de travail’ short RTT, literally meaning ‘reduction of working time’.
These RTT days are due in two very different cases :
- RTT days as part of an annual working day agreement (executive level staff).
- RTT days as compensation for the non-application of the legal working time in France which is 35 hours per week. Employees working for instance 39 hours per week will either have to receive payment for the extra hours or a compensation for the exceeding hours in the form of RTT days.
The number of days depends, it is often between 9 and 11 days per year.
Additional days for certain family events
The employee can take additional leave for family events such as the birth of a child, marriage or civil partnership, as well as death of a relative. The number of days is fixed either by Law or by branch agreement, often between one and five days.
Public holiday benefits In France
Employees in France benefit from the following public holidays.
1st of January : New Year’s Day
18th of April : Easter Monday
1st of May : Labor Day
8th of May : Victory Day
26th of May : Ascension Day
5th of May : Whit Sunday
6th of May : Whit Monday
14th of July : Bastille Day
15th of August : Assumption Day
1st of November : All Saints’ Day
11th of November : Armistice Day
25th of December : Christmas Day
In France, each year one public holiday has to be worked by the employee. This is referred to as French solidarity day.
Health-Related Absences in France
In France, employees benefit from a good protection level in the case of health-related absences, such as sickness or maternity leave. This becomes particularly evident when compared to countries such as the U.S. or Canada. However, compared to European countries, France falls a little bit behind. Countries like Norway, Switzerland and Germany offer more substantial guarantees. In Germany, for instance, employees are guaranteed 100 % payment by the employer during the first six weeks of sickness. Whereas under French laws, employers only have to pay 90 % after a seven day waiting period.
In France, many collective bargaining agreements enhance the guarantees for their industry sector.
Variables impacting the employee's leave benefits In France
Absence management is a critical task of payroll management. From the employer’s perspective, absences can have a major impact on the business. Being compliant is of upmost importance. From the employee’s perspective, deductions must be comprehensible and transparent.
Absence management is one of the most complex part of payroll in France.
Different provisions apply depending on several variables:
- Type of absence:
Different provisions exists for ‘normal’ sick leave, hospitalisation, work accident, commuting accident, maternity leave. Better guarentees apply to certain absences, e.g. to work accidents. - Seniority of the employee:
Guarentees significantly increase the longer the length of service is. - Application of French laws or of one of the hundreds of collective bargaining agreement:
Many Collective bargaining agreements substantially enhance guarentees. - Employee status:
Many collective bargaining agreements provide for better guarantees for executive level staff.
Components of leave benefits in France
The employee’s leave payment can be made up of three components:
- Daily allowances paid by social security CPAM
These payments do not cover 100 % of the salary.
The remaining salary is fully or partially covered by the employer if salary payment obligations apply, or by the prévoyance. - Payments from the ‘prévoyance’
The ‘prévoyance’ insurance is a life and disability insurance that also covers salary payments in case of health-related absences such as sickness. This insurance is mandatory for executives and, based on the collective bargaining agreement, it is often also mandatory for non executive staff. - Complementary payments from the employer
The employer might be obliged to pay a complementary salary, either based on French labor laws or a collective bargaining agreement. The amount and the duration vary based on seniority and other variables.
Employee's sick leave benefits in France
Employees on sick leave receive the following payments if conditions are met.
First of all, the social security CPAM will pay daily allowances. For a ‘normal’ sick leave the allowance corresponds to 50% of the employee’s gross salary up to a maximum amount of 46 € gross per day. A waiting period of three days applies. In the case of a work accident, the daily allowance is larger and no waiting period applies.
On top of that, the employee might either receive a complementary payment from the employer, or the life and disability insurance.
Under French laws, any employee with one year of seniority in the company benefits from a complementary payment by the employer. In total, employees receive a compensation of 90 % for a certain duration, then 66.67 %. The duration depends on the seniority. A waiting period of seven days applies for ‘normal’ sick leave, no waiting period applies for work accidents.
It has to be noted that most collective bargaining agreements enhance the entitlements. If a bargaining agreement is applicable to the employer’s industrie, he will need to apply the more favorable rule to the employee. Many collective agreements remove the waiting period and increase the total compensation to 100% for a certain duration.
Lastly, employees may receive allowances from the life and disability insurance. The insurance refunds are paid to the employer. Only if the employee is not, or no longer, entitled to complementary payments from the employer, the employee will receive the insurance refunds via payroll.
Employee's maternity leave benefits in France
The duration of the maternity leave depends on the family situation:
| Familiy situation | Maternity Leave before birth | Maternity Leave after birth | Total Maternity Leave |
|---|---|---|---|
| expecting first child | 6 weeks | 10 weeks | 16 weeks |
| already has one child and expecting one child | 6 weeks | 10 weeks | 16 weeks |
| already has at least two children and expecting one child | 8 weeks | 18 weeks | 26 weeks |
| expecting twins | 12 weeks | 22 weeks | 34 weeks |
| expecting triplets or more | 24 weeks | 22 weeks | 46 weeks |
The employee will receive payments from the CPAM. Most of the time, these payments do cover almost 100 % of the salary. However, there is a maximum of 89.03€ gross per day based on the social security ceiling. Under French laws, the employer is not obliged to pay a complement. Consequently, employees with higher incomes might experience an income cut.
However, some collective bargaining agreements stipulate a complementary payment, often with a one year of seniority requirement.
Employee's parental leave benefits in France
The parental leave entitlement depends on the number of children born.
| Number children born simultaneously | Initial parental leave benefit | Possibility to renew the parental leave | Latest parental leave end |
|---|---|---|---|
| 1 child | 1 year | twice | 3rd birth day of child |
| twins | 1 year | twice | latest at the entry to pre-school |
| triplets or more | 1 year | 5 times | 6th birth day of child |
Mandatory Employee Insurance Benefits in France
Mandatory insurances in France are numerous. They include health care, life and disability, unemployment and pension.
In some cases the employer is free to chose the insurance company, in some cases the insurance company depends on the applicable collective agreement or on other variables. As your French payroll provider we will handle the set up of all insurances as part of our Payroll Services France.
Employee's health insurance benefits in France
The French health care system consists of the basic state health insurance as well as the additional health care insurances referred to as ‘mutuelle’.
The basic state health insurance partially covers medical expenses. This is managed by CPAM (Centre Primaire d’Assurance Maladie). Each employee can create an account on ameli.fr with his French Social Security Number to access to the different services.
As the CPAM does not fully cover the health care expenses, the employer is obliged to set up the complementary health insurances ‘mutuelle’. This will often cover the remaining costs, e.g. medical, dental, and vision.
For instance, in the event of an hospitalization in a public hospital, the state health insurance will cover 80 % and the remaining 20 % can be covered by the mutuelle.
Employee's life and disability insurance benefits in France
The life and disability insurance protects the employee and his family, covering the risks related to death, incapacity, invalidity and dependency. Most commonly employees benefit from it in the event of long-term sickness for which it partially covers the salary. This becomes particularly important when the employee is no longer covered by continued salary payments by the employer.
Under French laws, the life and disability insurance is mandatory for all executive level staff. It might even be mandatory for non-executive staff if stipulated by collective bargaining agreement. In case it is not mandatory in your company, it is still recommended to set it up in order to protect your employees’ interests.
Employee's pension benefits in France
The French pension scheme is based on three pillars:
- the mandatory basic pension
- the mandatory complementary pension
- the additional pension
The first two pillars are mandatory for all companies. Impatriates can opt out of the mandatory French Pension Scheme if conditions are met. The additional pension is only mandatory if stipulated in the applicable branch agreement. However, even if not legally mandatory some employers chose to offer an additional pension to their employees as part of their employee benefit package.
Mandatory Basic Pension benefits
The mandatory basic pension corresponds to the first pillar of the French pension scheme. The contributions are split between the employer and employee.
The statutory minimum retirement age depends on the date of birth (62 for someone born in 1955 or later). In order to qualify for a full pension the individual must have acquired a number of quarters that also depend on the year of birth.
Then, from an age between 65 to 67 the applicant will automatically receive a full pension.
Mandatory complementary Pension benefits
For private-sector employees, supplementary pensions are administered by the different Agirc-Arrco insurances. For instance, employees of foreign employers are declared to MALAKOFF HUMANIS INTERNATIONAL AGIRC-ARRCO.
It is a point-based system: each year, an individual’s contributions are converted to retirement pension points and added to the pension account. The amount of the pension is calculated by multiplying the number of points by the value of point, which is determined each year.
Complementary retirement pension contributions are split between employer (60 %) and employee (40 %).
This pension is awarded at the full rate:
- if the individual has reached the statutory age of 62 and has accrued the required number of quarters for entitlement to a full-rate basic retirement pension.
- after reaching a minimum age of 65 – 67 (depending on the date of birth).
Additional Pension benefits
The third pillar is the additional retirement plan. It is optional in most cases. Though, some branch agreement make it obligatory for certain employees.
If not mandatory by collective agreement, a company can still offer an additional retirement plan. Certain employer choose to set it up for their executive level staff. It can enhance the compensation package. It is also interesting from a financial point of view, as exemptions from social charges and payroll taxes may apply in some cases.
Employee's unemployment benefits in France
Unemployment benefits in France are generous. The French unemployment system is managed by ‘Pôle Emploi’. This government institute brings all employment services under a single body, with a single point of contact for registering, counseling, training and services related to daily allowances.
The unemployment insurance is financed through contributions paid by the employer. The unemployment contribution rate can vary based on a bonus/malus system.
In order to apply for unemployment benefits, several conditions have to be met including :
- having left a involuntarily (e.g. dismissal, but also mutual termination agreement) or for a legitimate reason (e.g. for instance moving to another region because of the spouse’s employment);
- having worked for at least six months (four months during covid crisis);
- being registered as a job seeker with Pôle emploi.
Duration of the allowances:
The duration of the unemployment benefits depends on the age of the jobseeker and the period during which contributions were paid. For instance, a jobseeker under the age of 53 who has contributed to the unemployment insurance for 24 months, can receive the allowance for up to 24 months. For a jobseeker of 53 years this is brought up to 36 months .
Employee's Training Benefits in France
Each year, a full time employee receives a training credit of 500 €. It is added to his training account CPF ‘compte personel de formation’. Over the years, this can add up to a maximum of 5000 €. Employees with a disability can receive a credit of 800 € per year within a maximum of 8000 €. It can be used for eligible trainings only. The employee can search for those trainings in his account. The trainings are financed with training taxes paid by the employer and declared via the DSN.
Setting up Employee Benefits in France
Even though these minimum provisions can serve as a guideline, to attract talent you might be required to offer more. My Payroll Pro France will not only assist with setting up the French employment contract and mandatory benefits such as the health care ‘mutuelle’ and the life and disability insurance ‘prévoyance’. We also assist you in the process of creating a competitive offer to set your company apart. This will often include optional employee benefits in France.
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