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France PEO (Professional Employer Organization)

 

Key Takeaways

  • A France PEO joins a client company in co-hiring French employees, but the client is the legal employer.
  • PEOs act as HR outsourcing organizations, providing services like hiring, onboarding, and payroll management.
  • Using a PEO in France requires the client company to own a registered entity.

As a foreign company, how can you connect with and hire talented French employees? Working with a France PEO is one of the best ways to hire talent in France. As the most-visited country in the world, with nearly 80 million tourist visits in 2023, France is back on its feet after the downturn created by the global pandemic. The country’s employment rate also rebounded after the pandemic and reached 68.4% by the fourth quarter of 2023, accounting for 30.45 million jobs. The job market is healthy but the unemployment rate is still sitting at 7.5%. This means there are still lots of skilled and qualified workers out there, even if competition for them is strong. 

In this article, we’re going to look at what a France PEO is, what one does, and how to choose one. You’ll also learn how a PEO can help you get French employees onboard quickly and easily.

What is a France PEO?

A Professional Employer Organization (PEO) is essentially an HR outsourcing organization. It links a client company and its employees in France by performing most HR functions on its client’s behalf. These can include recruiting, hiring, onboarding, paying salaries and benefits, making mandatory contributions, and managing legal issues related to employees. 

A France PEO is a co-employer with the client company, meaning they share employee responsibility. The PEO plays a role in HR and payroll while the client company manages employees’ day-to-day tasks. This contrasts with a France Employer of Record (EOR), which takes on sole legal responsibility for employees and hires them directly. In France, the term official term used for the EOR relationship is portage salarial or “salary carrying.” In this situation, the client company contracts the EOR as a legal entity in France, while for a PEO, the client company is required to set up its entity in the country.

Top 5 France PEOs in 2024

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. 

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. 

Remote

Remote is an international PEO platform with a strong focus on compliance, hiring all employees (including in France) through its entities.  Their robust platform ensures full compliance with French labor laws and EU data protection laws. 

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. 

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. 

How a France PEO Works

Using a France PEO creates a three-way relationship between the client company, the PEO, and the employee. Each has different responsibilities and obligations in the tripartite association, as we’ll see below:

1. Obligations of the Client Company

The client company is a foreign company looking to hire talent in France. The company puts together a contract with the help of the PEO and hires an employee directly. To be able to do this, it’s required to own a registered entity in France. The client company manages the employees on a day-to-day basis but pays their salary and benefits through the PEO. It also shares the responsibilities of hiring and firing with the PEO in a co-hire relationship.

2. Obligations of the PEO

The Professional Employer Organization’s role is essentially to act as an outsourced HR team in France. This means that the PEO takes care of recruitment, hiring, and onboarding of new employees. It will typically also help create contracts and handle payroll, tax, and benefits on behalf of the client company. In exchange, the PEO receives a management fee for these services.

3. Obligations of the Employee

In this relationship, the employee is recruited and hired by the PEO on behalf of the client company. However, the employee signs a contract with the client company directly and it’s with that company that they can negotiate for working obligations, salary, and benefits. The employee then performs work directly for the client company while the PEO pays their salary, manages their hours and holidays, and ensures all their work complies with French Labor Laws.

France Labor Law

France has a long and proud history of labor law going back hundreds of years. It’s also important to note that France is a member of the European Union, and EU law can supersede national law in some cases. Therefore, an excellent PEO needs to know both to advise its client companies effectively. Below are some of the stipulations of French labor law that you should be aware of when hiring French workers.

Working Hours

The standard workweek in France is only 35 hours long. No employee can work more than 48 hours per week. Overtime is very costly. Overtime hours are paid at a 50% premium after the first eight hours of work, which are also paid at a 25% premium

Social Security Contributions

France has an extensive social security system with great coverage, but this means large contributions. French employees pay into old age insurance, unemployment insurance, family allowances, and pension schemes for a total of 13-40% of their taxable income. These amounts are normally matched by employer contributions.

Paid Leave: French workers get a minimum of five weeks of paid leave per calendar year. This leave can’t be taken in chunks of more than 24 consecutive days. Also, employers must allow employees to take some leave between 1 May and 31 October and employees must use at least 12 days of leave during this period.

Maternity/Paternity Leave

Mothers can take 8-16 weeks of paid maternity leave, but this rises to 26 weeks if they already have two or more dependent children at home. Fathers are entitled to 28 days of paid paternity leave. These numbers rise for multiple births like twins and triplets.

Tips for Doing Business in France

Benefits of a France PEO?

The main advantages of entering into a co-hiring relationship with a PEO in France are two-fold. First, the client company can avoid the huge cost of setting up an HR department in France. This is what the PEO is hired to do and the client company can leverage their knowledge, experience, and networks to help manage French employees effectively. The PEO knows how to comply with French labor laws and this reduces the risks of hiring international employees dramatically.

The other major advantage of using a PEO is the speed of onboarding. If you need to hire a French employee fast, a PEO can likely have them recruited, hired, and onboarded in a matter of days. This way, your company can fill positions with talent efficiently and continue creating value the way it knows how.

Downsides of a France PEO

A France PEO solution is not for every company. Reasons why a PEO may not be the best hiring option include:

The cost for companies with an existing presence. If the company already has a presence in France and a significant workforce there, it is often more cost-effective to hire and pay employees directly through that French entity.  

Control over HR issues. Where a PEO is involved, if there is  an employment dispute or disciplinary issue, the PEO and the client company need to be involved. 

Legality. Hiring must be compliant with Portage Salarial rules in France. This may mean that the maximum duration of a PEO contract is 18 months only. 

Choosing a France PEO

With hundreds of PEOs looking to connect you with employees in France, choosing the best can be a real challenge. These are some of the important questions to ask to help you make an informed decision.

Does the PEO suit your needs? – Look for a PEO that covers all the HR functions you require like recruitment, onboarding, hiring, payroll, tax, benefits, and more.

Is the PEO experienced? – Established companies will have more relevant experience and problem-solving knowledge than upstarts.

Does the PEO have a great reputation? – Look at reviews and ratings to help you choose a company with an excellent professional reputation. Negative reviews from both employees and client companies will reflect poor management.

What fee does the PEO charge? – Get quotes for the services you need and ensure there are no hidden costs that will crop up later.

Is France PEO the Best HR solution for You?

A France PEO solution is ideal for companies that need a fast and effective hiring solution, especially where there need for staff is intended to be temporary. For companies looking for a more permanent hiring solution, it may make more sense to set up a legal entity in France. 

France Business Guides

Frequently Asked Questions

There are two main differences between the France Professional Employer Organization (PEO) and Employer of Record (EOR) situations. The first is that while a PEO handles recruitment, hiring, payment of salary and benefits, and many other HR functions, the employee is contracted directly by the client company, creating a co-employment situation. An EOR, on the other hand, handles all these functions and contracts the employee directly as the legal employer. For this reason, an EOR will already have a legal entity in France to use as the legal employer. However, a PEO relationship requires the client company to have its entity registered in France.

The French term portage salarial means “salary carrying” and is essentially equivalent to an EOR relationship. This is the legal term used in France, and the use of these relationships is carefully stipulated and strictly controlled.

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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