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France PEO (Professional Employer Organization)

VERDICT: The best France PEO in 2024 is Horizons. Horizons stands apart from other PEOs in France with their in-depth local expertise and support on the ground in France. 

Key Takeaways

  • A France PEO facilitates the hiring process without the need for a local legal entity.
  • Leveraging a PEO in France offers flexibility and cost savings for businesses expanding into the French market.
  • The top 5 France PEOs in 2024 are Horizons, Globalization Partners, Remote, Deel and Skuad. 

What is a France PEO?

Professional Employer Organizations (PEO) in France are an invaluable resource for companies seeking to expand their operations without establishing a full-fledged legal entity. A France PEO is an independent HR firm that acts as the co-employer of your workers in France. 

This means that the France PEO handles all the administrative and compliance tasks associated with employment, effectively leasing employees to the client. At the same time, the client remains the operational employer and supervises employees daily. 

A France Employer of Record (EOR) is a company that becomes the legal employer of your workforce in France. Often, the terms France PEO and France EOR are used interchangeably. 

Considerations for Choosing a PEO in France:

  1. Local expertise: Knowledge of French labor laws is crucial.
  2. Service offerings: Not all PEOs provide the same services.
  3. Cost efficiency: Analyze if a PEO is more cost-effective considering your business size and needs.

For businesses domiciled outside of France, partnering with a PEO is a strategic move to hire and manage a workforce competently in France. At the same time, the client company retains direct management of their employees’ day-to-day roles.

Top 5 France PEOs in 2024

  1. Horizons: Horizons, with its in-depth knowledge of French labor law, and extensive customer support on the ground in France, Horizons is ranked the No. 1 France PEO. Horizons can assist with all aspects of French HR including hiring, payroll, recruitment and visa support. 
  2. Globalization Partners: This PEO stands out with its ‘GoGlobal’ platform, providing an intuitive and user-friendly platform for companies looking to expand into France. With a reputation as a premium global PEO, Globalization Partners can support you with recruitment and visa services, as well as PEO. 
  3. Remote: Remote is an international PEO platform with a strong focus on compliance, hiring all employees (including in France) through its own entities.  Their robust platform ensures full compliance with French labor laws and EU data protection law. 
  4. Deel: Deel is renowned for its state-of-the-art HR platform and robust set of integrations. Deel is a valuable provider for all companies seeking to integrate their French hiring with other HR apps and platforms. 
  5. Skuad: Skuad is a global PEO provider with a reputation for cost-effective PEO solutions. This makes them a useful option for small to medium-sized businesses expanding into France. 

Business Expansion and Hiring in France

Why would businesses want to expand and hire in France in the first place? 

Firstly, France is renowned for its highly educated workforce; according to the OECD, over 45% of 25-34-year-olds in France have a tertiary education. This means a talent pool with in-demand skills and knowledge.

Secondly, France is strategically located in Europe, providing access to a large EU market. The World Bank’s Ease of Doing Business Index ranks France 33 out of 190 economies for its business-friendly regulations.

Finally, the French government offers various incentives for businesses, including tax credits for research and development, as noted by Business France. This environment fosters innovation and growth, making France an appealing destination for companies looking to expand and hire.

Tips for Doing Business in France

What Does a PEO in France Do?

In France, a Professional Employer Organization (PEO) is an invaluable partner for companies looking to expand their operations and manage human resources without establishing a legal entity. They ensure compliance with French labor laws and simplify the administrative complexities.

1. Hiring and onboarding services

A PEO can hire employees on behalf of a client company. This arrangement allows businesses to hire talented professionals in France rapidly, often within days, as opposed to the typical months it would take without a PEO. The EOR assumes responsibility for legal compliance, employment contracts, onboarding, and offboarding.

2. HR and Payroll Administration

PEOs provide comprehensive HR and payroll administration services, including managing payroll, creating competitive benefits packages, and ensuring adherence to local labor laws. Through PEO services, business owners can focus on operational growth while the PEO navigates the intricacies of HR management in France.

3. Compliance

The France PEO becomes responsible for ensuring labor contracts are compliant, that income tax is withheld, and that all payroll taxes are deducted and paid according to the law. 

Benefits of Using a French PEO

Utilizing a French Professional Employer Organization (PEO) offers substantial benefits for companies looking to expand into France without the complexity and risk of establishing a legal entity. They provide expertise in compliance, streamline the hiring process, and reduce employer liabilities.

1. Compliance With French Labor Laws

A French PEO ensures that a company’s employment practices comply with local labor laws known for their complexity. From handling taxation issues to adhering to strict working hours regulations and managing mandatory employee benefits, a PEO navigates the intricate legal landscape. This compliance is critical, as it mitigates the risk of legal penalties and helps maintain a positive company reputation.

2. Streamlined Hiring Process

Companies benefit from a simplified hiring process through a PEO’s established infrastructure. This includes swiftly onboarding new employees, managing work permits, and ensuring the contract details meet local standards. A PEO’s local expertise will expedite sourcing and onboarding talented professionals, which is particularly beneficial for companies that need to scale quickly in a new market.

3. Reduced Employer Liability

Partnering with a French PEO reduces the liability typically shouldered by the employer. The PEO becomes the employer of record, handling risks associated with employment, such as wrongful termination or employee disputes. This arrangement allows companies to focus on their core business activities while significantly reducing the potential legal and financial exposures.

Challenges Addressed by France PEOs

Professional Employer Organizations in France offer solutions to complex employment challenges faced by international companies. These PEOs ensure compliance, manage diverse teams, and help navigate the unique French business culture.

1. Navigating Local Employment Regulations

In France, employment regulations are stringent and continually evolving. A France PEO allows companies to hire employees without the risk of non-compliance with local laws such as the Code du Travail. For instance, PEOs ensure compliance with payroll tax regulations, taxes which can range from 29.50% to 31.30%. They also ensure adherence to the strict rules surrounding work hours and leave entitlements, avoiding legal pitfalls and fines.

2. Managing Multilingual Workforce

The linguistic diversity in France can be a barrier for international businesses. PEOs offer support by providing bilingual documentation and services. Employment contracts, for instance, are available in French and English, ensuring clear communication and understanding among employers and employees. This eases the onboarding process and helps maintain a smooth operational workflow.

3. Cultural Business Practices

Understanding French business etiquette and cultural practices is crucial for success in France. A PEO’s in-depth local knowledge helps international firms navigate these nuances. They guide companies on proper business conduct, from formal greetings to preserving a work-life balance, which is highly valued in the French corporate environment. This cultural insight helps international businesses build strong and respectful relationships with their French counterparts.

How to Work with a PEO in France

Setting up a PEO in France allows companies to streamline their HR processes and quickly establish a legal presence. This allows them to efficiently handle complex local labor laws and regulations.

1. Initial Setup and Onboarding

When engaging a PEO in France, the initial setup involves thorough planning. A PEO assists in recruiting talent while ensuring compliance with French employment law. Onboarding includes setting up payroll, benefits, and tax registrations, which are meticulously managed to align with local requirements.

2. Employee Contracts and Documentation

Employee contracts in France can be written or verbal; however, a written contract in French is legally advisable. A PEO will create compliant employment contracts, including necessary paperwork, and ensure that employees receive a copy in their preferred language for their understanding while maintaining that the French version is the legally binding document.

3. Ongoing Support and Consultation

A PEO provides ongoing HR support and consultations, addressing payroll management, tax filings, and employee benefits. Companies receive expert guidance on best practices and changing regulations, allowing them to focus on core business activities while managing their French operations effectively.

Key Considerations When Choosing a France PEO

Choosing the right Professional Employer Organization (PEO) in France involves carefully evaluating their service range, local expertise, and technological capabilities. These factors directly impact the efficiency and compliance of your business operations in France.

1. PEO Service Range

When selecting a French PEO, companies should scrutinize the breadth and depth of services offered. It is essential to find a PEO that extends beyond basic payroll and benefits administration. Look for a provider that can offer comprehensive HR solutions, such as talent acquisition, employee training, and performance management. 

2. Localization and Expertise

A PEO’s understanding of local French labor laws and business practices is non-negotiable. They must exhibit a high degree of local compliance and adeptly manage all aspects of employment law, taxes, and workers’ benefits. Providers must have a solid track record within France and a team of experts who can navigate local regulations proficiently.

3. Technology and Infrastructure

A PEO’s technical infrastructure is pivotal in managing your workforce in France. Evaluate their technological tools for HR management, payroll processing, and data security. An intuitive client interface proactively supports day-to-day HR operations, enhances communications, and ensures seamless integration with your company’s existing systems.

Regulatory Aspects of French PEOs

Professional Employer Organizations in France must meet strict regulatory requirements involving taxation and employee rights. Understanding these regulations is crucial for compliance and smooth operations.

1. Taxation and Social Security

In France, employers must contribute to the social security system, which includes health insurance, pensions, and family benefits. The rates at which businesses contribute can vary, typically ranging from 29.50% to 31.30% of an employee’s salary. As representatives of the employing company, French PEOs ensure accurate and punctual handling of payroll tax obligations.

  • Health Insurance: Mandatory contributions to healthcare are included within the social charges.
  • Pensions: Contributions to the state pension scheme are also essential and are split between employers and employees.
  • Family Benefits: These are additional contributions intended to support families, calculated as a percentage of employee salaries.

2. Working Hours and Leave Policies

French labor laws are explicit in defining acceptable working hours and leave entitlements. The standard working week in France is 35 hours, although companies can negotiate different terms under certain conditions.

  • Overtime: Any hours worked above the legal standard must be compensated, typically at a higher rate.
  • Annual Leave: Employees are entitled to at least five weeks of paid annual leave.
  • Maternity/Paternity Leave: Maternity leave can last up to 16 weeks, while paternity leave was extended to 28 days in 2021.

PEOs in France must ensure complete adherence to these regulations, offering necessary guidance and oversight to foreign companies employing staff within French borders.

Cost Structure of PEO Services in France

The cost of PEO services in France encompasses both direct and indirect employment expenses, influenced by stringent labor laws and tax regulations.

PEO services in France generally offer transparent pricing to ensure businesses can budget effectively. These models typically include a base fee for the comprehensive HR services provided, which may be a flat monthly rate or a percentage of each employee’s salary. Additionally, there will be variable costs that account for statutory employee benefits, taxes, and insurance. 

Before using a PEO in France it is worth carrying out a basic cost-benefit analysis: Engaging with a PEO can generate both tangible and intangible benefits for a company. While the initial costs might include the base fee and a percentage markup on employee salaries, companies often save on the expense of setting up a legal entity and avoid potential non-compliance risks. The PEO also absorbs certain employer liabilities.

Choosing a France PEO 

A France PEO helps global businesses hire and pay employees in France quickly and cost-effectively. By choosing a PEO solution, the international company doesn’t need to set up a local French subsidiary, which saves around 85 percent of the cost of expanding and hiring employees in France. 

When choosing a PEO provider in France, looking for a provider with an in-depth understanding of French tax and labor laws is essential. It is also necessary to check which other services the PEO provides (such as visa support and recruitment) to see if they meet your needs.  

France Business Guides

Frequently Asked Questions

A French PEO is similar, but slightly distinct from a portage salarial solution. Portage salarial services handle payroll taxes and social deductions for self-employed workers in France: They are the French version of a UK umbrella company. 

These terms are usually used interchangeably, with companies offering both services. PEO refers to a co-employment relationship, while an EOR service means the EOR company becomes the legal employer of your French team. 

Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.

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