Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
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A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in France can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in France, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for France.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in France is not the same as paying workers in your own country. Employees have to be paid using France’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
A full-time workweek is 35 hours.
Overtime is work done beyond the weekly 35 hours. With an established agreement overtime pay must be no less than 110% of the regular wages. If no agreement is in place, overtime pay is 125% of the regular pay for the first 8 hours of overtime and 150% for every hour after.
The payroll cycle is monthly. While there is no fixed date when salaries must be paid, it is common to pay employees at the end of the month. It is also possible to have a pay date outlined in a collective labor agreement.
13th salaries are not mandatory, however, sometimes are set by national or industry agreements and are usually paid out at the end of the year.
After the first month of probation, employees are entitled to 5 weeks of annual leave.
There are 11 public holidays.
An employee must put in at least 150 hours of work in the past 3 months or 90 days immediately before the leave or have contributed based on earnings of at least 1,015 times the legal hourly minimum wage in the last six calendar months.
A payment of 50% of the insured’s daily earnings is paid after a three-day waiting period.
Paternity leave entitlement is 28 days, where at least 1 week is mandatory. This leave also covers same-sex (female and male) couples. Employers are responsible for paying 3 days of the leave, while social security covers the rest.
Employees who have worked for at least one year before the date of their child’s birth, (or before welcoming a child no older than 16 years to their home with a view to adoption) can take parental leave or choose to work part-time.
This right extends until the child’s third birthday, (unless the child was aged between three and 16 on arrival, in which case the adoptive parent can take one year’s parental leave from the date of arrival).
If employees take parental leave, their employment contract is suspended and the employer does not have to pay compensation. However, the employees can receive certain indemnities from the social security system.
Parents can also benefit from additional leave when their child is sick, which usually amounts to between three and five days depending on the child’s age and the parent’s number of children.
However, if the child suffers from a serious illness or disability, or an accident, which requires continuous parental presence or constraining care, the parents can take a specific leave of 310 days over three years.
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In France, it is not allowed to dismiss someone due to COVID-19.
Resignation: No specific labor code. Can be submitted verbally or written, however, it is advised to provide a written notice. A fixed duration of notice does not exist, but notice should always be given. Notice period is determined on contract, agreement, or practices by profession.
Mutual Termination: Employers and employees agree on termination conditions in permanent employment contracts.
Economic Dismissal: These are jobs cut due to economic or technological changes.
Individual Dismissal: A preliminary dismissal interview must be set up and take place. 2 days to a month after the meeting a letter of dismissal must be sent to the employee.
1 month for employment between 6 months and 2 years.
2 months for employment over 2 years.
3 months for executives.
Calculations for severance pay depend on which payment provides the most favorable outcome.
Monthly average of last 12 months of employment;
Average monthly earnings of all months preceding dismissal;
1/3 of the last 3 months.
