New provisions governing the posting of foreign employees in France

In the wake of the EU Directive 2018/957 of June 28th, 2018, the French Legislator also provided for new measures related to staff secondment from foreign companies in France by adopting the Law n°2018-771 of September 5th, 2018.

For the record, the concept of secondment or posting refers to the situation where an employee who usually works outside France, for an employer himself established outside France, is sent to France to perform a temporary assignment or service (Article L. 1261-3 of the Labour Code).

In practice, this can cover four different situations (Articles L. 1262-1 and L. 1262-2 of the Labour Code):

• The performance of transnational service involving two companies;

• Intragroup mobility;

• The performance of a mission for the employer’s own account;

• The transfer of employees from a temporary work agency.

Foreign companies considering seconding employees to France must go through prior specific formalities which could – at some point – be really burdensome.

That is why, French new provisions aim at simplifying these formalities in certain cases of secondment in France. However, in turn, the Law reinforces the sanctions for non-compliance with secondment rules.

Simplifying secondments’ formalities

In principle, any foreign company looking at sending employees in France to perform a temporary work must:

• Proceed to a specific declaration to the French Labour Inspection (so-called “SIPSI declaration”);

• Appoint a representative of the company in France.

These formalities are often considered as being difficult to abide by for short-term secondments. That is why, from now on, companies outside France will be exempted from such formalities in two cases (Article L. 1262-2-1 of the Labour Code and Ministerial Order dated June 4th, 2019):

1. For short-term services or one-off events for artists, athletes, apprentices on temporary mobility, conferences, seminars and scientific events;

1. For employers seconding employees in France to perform an assignment for their own account (e.g. when there is no contract signed with a client based in France, for instance to prospect new markets, promote the company, attend a meeting or a training…).

Furthermore, the Law offers the possibility for foreign companies seconding employees in France on a regular basis to ask the Labour Inspection to benefit from specific adjustments (i.e. to be exempted from the declaration or the nomination of a representative). In this case, the Labour Inspection will ensure that the company complies with the so-called “hard core” rules provided by French Law, notably related to minimum wages, duration of work and occupational health and safety (Article L. 1262-4 of the Labour Code). These adjustments can be authorized for a maximum period of 12 months, renewable at the request of the company (Article L. 1263-8 of the Labour Code).

Reinforcement of administrative fines

The Law increases the sanctions in case of infringement to the secondment rules.

First, the maximum fines incurred in case of non-compliance increase from €2.000 to €3.000, and from €4.000 to €6.000 in case of repeated offenses, characterized by any reiteration of the infringement within 2 years since the notification of the first fine (Article L. 1264-3 of the Labour Code). Moreover, the employer must pay such fine even if he challenges it.

Besides, the duty of care of a company contracting with a foreign employer is extended. Now, when concluding a service contract, the client shall ensure that its foreign contractor is up to date with the payment of fines due for non-compliance with:

• its obligations related to the implementation of secondment (prior declaration, nomination of a representative…);

• its obligations related to the seconded employees’ rights;

• the suspension of activity ordered by the Labour Inspection further to a breach of the “hard core” rules;

• its obligation to display the information related to secondment on a construction site.

Furthermore, the Labour Inspection is now able to suspend the execution of an international service contract in case of non-payment of a fine consecutive to the non-compliance with secondment rules. To do so, the Labour Inspection must order in writing the concerned employer to pay the fine and inform its contractor. In the absence of payment before the starting date of the contract, the Labour Inspection can impede the provision of the service planned by the parties for a maximum period of 2 months renewable (Article L. 1263-4-2 of the Labour Code).

These new provisions clearly constitute a new opportunity for companies to temporary second employee easily and quickly. However, companies will have to be cautious and strictly comply with the existing obligations provided by French law to benefit from the advantages of this new scheme.