Secondment of employees to France: beware of new rules applicable since July 30th, 2020

The transposition in France of the EU directive governing transnational secondment of employees took effect on July 30th, 2020.

New provisions pursue 2 main goals : the reinforcement of employees’ rights and the fight against social dumping by reinforcing employers’ obligations.

Key changes are described hereinafter.

Compensation of seconded employees and reimbursement of business expenses

Article L1262-4 of the French Labour Code provides for a list of rights applicable to foreign employees posted in France, in order to guarantee them an equal treatment with employees working in companies established on the French territory in the same branch of activity.

Until now, the employer had to guarantee to its posted employees an equal treatment in terms of minimum wages.

Rights of posted employees were reinforced on this aspect since new Article L1262-4 of the French Labour Code provides that they benefit from rules applicable in terms of compensation.

Employees seconded to France therefore no longer only benefit from the minimum wage (so-called “SMIC”) or the minimum wage under the terms of the applicable collective bargaining agreement but receive all elements of compensation required by French law or collective agreements for the concerned branch of activity.

Also, employees seconded to France now benefit from the reimbursement of their business expenses incurred by transportation, meals and accommodation, on the conditions stipulated by a Decree.

Increased rights in case of secondment in France for more than 12 months

During the 12 first months of their secondment, employees benefit from the rights listed by Article L1262-4 of the French Labour Code (working time, striking, compensation, maternity protection, …).

In addition, after 12 months of secondment of employees to France, their employer will now have to comply with all provisions of the French Labour Code, except those strictly listed e.g. rules governing the conclusion, performance, transfer and termination of the employment contract, its modification for economic reasons, voluntary mobility, fixed-term contracts.

Prior declaration of secondment

Before seconding employees to France, the employer must proceed with a prior declaration of secondment to the Labour Administration (so-called “SIPSI declaration”). This must be done through a dedicated platform before arrival.

Remodelling of the procedure for prohibiting the secondment in case of non-payment of fines in order to strengthen the fight against fraud

French law already provided for the possibility for Labour Administration to order the prohibition of secondment in case of non-payment of an administrative fine by an employer or prime contractor for non-compliance with the rules governing secondment.

From now on, the controlling officer who will observe such a breach will send a report directly to the Labour Administration which will notify, in writing, the employer to put an immediate end to the breach by paying all sums due, upon receipt of the injunction and will invite said employer or its representative to present observations within 3 days.

Ultimately, the Labour Administration may notify a temporary ban to provide services, which may not exceed two months.

Information of the temporary employment agency concerning the rules applicable to seconded employees

The user company established outside France which seconds employees who were placed at its disposal by a temporary employment agency must now inform the latter, by any means and within a reasonable period of time prior to the secondment, of the posting of its employees to France as well as the rules applicable to them.

In a context where employment is already strongly impacted by Covid-19, there is every reason to believe that the French Labour Administration will be particularly cautious on controlling compliance with these rules, in order to fight against all forms of social dumping.