France: The "Independent Worker" and "Employee" Status

Last Updated: 14 June 2006
Article by Philippe Desprès

It is important to distinguish between employees hired under an employment contract and "independent workers" who carry out work for an "employer" whilst remaining self-employed. This distinction is crucial as an employee hired under an employment contract is entitled to the safeguards provided for by French labor law with respect to, for instance, wages and termination conditions.

"Independent workers" can refer their case to the courts, asking that their status be redefined in order to benefit from the advantageous provisions of French labor law.

Given the disparity between what an employee is entitled to pursuant to his/her employment contract, if dismissed, and what an independent worker is entitled to when the contractual relation ends, there is a real risk that an independent worker may ask for the reclassification of his/her works contract.


There are no legal provisions that set out both the employee and the independent worker status (i.e., no legal definition of an employee vs. an independent contractor). Indeed the French Labor Code contains no specific provision whereby determining whether or not an employment contract exists and what the criteria of the independent worker are.

However, criteria have been set out by the French Supreme Court regarding the employment contract. According to the French Supreme Court, an employment contract exists when a person undertakes to work in the name and under the supervision of another in return for remuneration.

Three elements, required to prove the existence of an employment contract, emerge from this definition:

  • the performance of an activity;
  • in return for remuneration; and
  • the existence of a superior-subordinate relationship between the parties.

Among these three criteria, the third is the most decisive.

Recently, these criteria of employment have become quite identifiable in light of labor and social security law. Indeed, in the last few years, decisions made in relation to registration with the mandatory social security scheme have been based on the same criteria invoked to determine the existence of an employment contract.

According to case law, the legal superior-subordinate relationship means that a job is performed under the authority of an employer, which has the power to give orders and instructions, supervise the performance of said job and apply sanctions in case of failures or breaches from its subordinate (French Supreme Court, March 22, 2006, appeal n°05-42346).

By contrast, an independent worker is a person who provides services to another party in an independent and non-subordinate manner.

Although the French Labor Code does not define the independent contractor status, it does however provide in Article L.120-3 that any person registered with the Commercial and Companies Registry or the Commercial Agents Register (whose registers are not for employees) is presumed not to be an employee and not to provide services in a subordinate manner.

However, this presumption can be challenged and that same article of the French Labor Code further provides that the existence of an employment contract can be established when the aforementioned person provides, directly or indirectly, services to a party under conditions that place such service provider under the permanent subordination of the other party.

Indeed, irrespective of the provisions of the contract, judges are always allowed to reclassify a works contract into an employment contract. It is well-established case law that the nature of the contract is not determined by the will expressed by the parties or the name given to their agreement, but by the conditions under which the work is provided (French Supreme Court, July 12, 2005, Mengelle vs. Groupe Envergure).


Obligations of the employer when hiring an employee

Prior to hiring a new employee, the employer must first proceed with a nominative declaration with the French Social Security authorities, no matter what the nature of the contract of the employee it intends to hire.

The employer must declare the new employee to the Social Security authorities no earlier than eight days prior to the employment start date (Article L.320 of the French Labor Code). The employer must also register the new employee with the competent Labor Inspector.

Prior registration of new employees to the authorities

The prior registration of a new employee to the authorities must be submitted eight days at the earliest before the new employee is hired. This prior registration must be made by the employer by way of a document referred to as a "déclaration unique d’embauche" (single declaration of employment).

This declaration must include the following information:

  • registered name of the company;
  • APE code;
  • employer’s address;
  • company’s identification number in the register of companies and its different establishments, or its number under which social security contribution payments are made;
  • employee’s first and last name, nationality, date and place of birth, social security number, if the employee already has one;
  • date and time of the employee’s hiring.

Within five working days from the date on which the declaration is delivered to the authorities, an acknowledgment of receipt is sent to the employer, which must in turn immediately give it to the employee.

Should the employer (i.e., the legal representative of the company) fail to comply with these obligations, it would be liable to a fine of €1,500. In addition, the company would be liable to a fine of €7,500.

Furthermore, the legal representative of the company may be sentenced for undeclared work ("travail dissimulé") (see "Under criminal law" below).

Staff register

Whatever the headcount, the employer must keep a register of all its employees in the order in which they joined the company (Article L.620-3 of the French Labor Code).

According to Article R.620-3 of the French Labor Code, the register must contain the following compulsory information:

  • employee’s first and last name;
  • nationality;
  • date of birth;
  • gender;
  • job;
  • qualifications;
  • arrival and departure dates with/from the company;
  • date on which official authorization to hire or dismiss was received;
  • for foreign workers who require a work permit: type and registration number of permit corresponding to a work permit;
  • for workers under an apprenticeship contract, the reference "apprenti" (apprentice);
  • for workers under a fixed-term contract, the reference "contrat à durée determinée" (fixed-term employment contract);
  • for part-time workers, the reference "travailleur à temps partiel" (part-time worker);
  • for temporary workers, the reference "travailleur temporaire" (temporary worker), as well as the name and address of the temp agency.

Should the employer fail to comply with these obligations, it would be liable to a fine of €750 for each employee unmentioned in said register while the company would be liable to a fine of €3,750 per employee unmentioned in said register.

This compulsory information must be kept on file for five years from the date of an employee’s departure. The register must be available for consultation by the Labor Inspector.

Obligations of the contracting company when entering into a contract with an independent worker

According to Article R.324-4 of the French Labor Code, when the work provider (i.e., the party that enters into a contract with a service provider) "is not a private individual, it must be provided with, at the time the contract is entered into and every six months until the end of its execution, 1° the following documents:

  1. A social declarations certificate (attestation de fourniture de déclarations sociales) from the social protection authorities in charge of collecting contributions and social security contributions that are incumbent upon the co-contractor and dated less than 6 months;
  2. an affidavit from the co-contractor of the filing to the tax authorities, on the date of the certificate, of all the mandatory tax declarations and the filing receipt to a business formalities center (centre de formalités des entreprises - CFE) when the co-contractor is not required to register with the Commercial and Companies Registry or with the Trades Register and is not in a position to produce the documents mentioned in a) or b) of 2° of the present Article;

2° When the co-contractor’s registration with the Commercial and Companies Registry or with the Trades Register is mandatory or when this concerns a regulated profession, the following documents must be provided:

  • a certificate of the registration with the Commercial and Companies Registry (K or K-bis – company details);
  • an identification card justifying the registration with the Trades Register;
  • a quotation, an advertising document or professional correspondence, on the condition that the name or business name, the complete address and the registration number with Commercial and Companies Registry or with the Trades Register or to a list or chart of a professional nature be mentioned therein, or the reference of the accreditation granted by the competent authority;
  • a receipt of the declaration filing to a business formalities center for physical or moral persons in the process of registration;
  • when the co-contractor employs employees, an affidavit established by said co-contractor, on the date the contract is entered into and every six months until the end of its execution, confirming that the work will be fulfilled by employees regularly employed in the light of Articles L.320, L.143-3 and R.143-2°".

According to case law, a person knowingly commits an offence of undeclared work when it fails to verify, although required to do so pursuant to both this text and Article L.324-14 of the French Labor Code, the regularity, in the light of Article L.324-10 of same, of the situation of the contractor whose services it employs (French Supreme Court – Criminal Division, November 4, 1997, appeal n°96-86.211) (please see 6.3 below for the sanctions applicable in case of undeclared work).



Employees are bound by an employment contract and benefit, in that capacity, from the provisions of the French Labor Code and the applicable collective bargaining agreements.

They therefore benefit from any compulsory and/or optional benefits paid by the company to its employees (e.g., stock options, profit-sharing rights, paid holidays, etc.).

Employees benefit from a special social security scheme called régime salarié (employee scheme). Both the employer and the employee contribute to such a scheme and the contributions are assessed on the employee’s gross salary and are calculated on a "Pay-As-You-Earn" basis.

Both the employer’s share of social security contributions (approximately 45% of the employee’s gross salary) and the employee’s share (approximately 25% of the employee’s gross salary) are paid directly by the employer that withholds the employee’s share from the employee’s gross salary.

Social security contributions include, in particular, contributions to (i) the national social security scheme (which includes health, disability and work-related accidents and illnesses coverage), (ii) the national mandatory pension schemes and (iii) the national unemployment scheme.

Independent workers

Independent workers perform their activity within the scope of a works contract (contrat d’entreprise), not an employment contract.

Consequently neither the French Labor Code nor collective bargaining agreements apply to them. Moreover, independent workers are not entitled to any compulsory and/or optional benefits paid by the company to its employees.

Independent workers do not benefit from (i) the national social security scheme, (ii) the national mandatory pension schemes or (iii) the unemployment scheme applicable to employees.

Independent workers are, however, required to register themselves with the social security scheme for non-employees within eight days from the beginning of their professional activity and must pay social security contributions at their own expense (i.e., the hiring of an independent worker does not trigger the payment of any social security contributions for the party that benefits from the services provided by such worker).

These contributions are evaluated based on professional income and usually amount to approximately 30% of the total remuneration.

As for work-related accidents and illnesses, independents workers are not entitled to any compulsory insurance scheme in relation to this specific risk, but can subscribe to optional social security insurance or to a private scheme.


Grounds for termination and process

The termination of an employment contract by the employer must be based on a "real and serious cause" and must comply with a specific process.

The employment contract can be terminated on the basis of either economic or personal grounds.

Real and serious cause based on personal grounds usually arises from the employee’s conduct at work or outside work (e.g., the employee’s absence) or his/her inability to perform his/her tasks.

Real and serious cause based on economic grounds usually arises from the existence of economic difficulties or the need to safeguard competitiveness. In both cases, the economic grounds put forward in support of a dismissal must be assessed at group level, and not at company level.

Moreover, the termination of an employment contract by the employer requires the holding of a pre-dismissal meeting with the employee, compliance with a specific time frame and, when the employer contemplates the dismissal on economic grounds of more than one employee, the information and consultation of the employee representatives.

In the absence of a real and serious cause, the dismissal is considered unfair and the employee is entitled to damages.

Conversely, the termination of a works contract is not subject to any legal requirement regarding the cause for termination or the process, and must only comply with the provisions of the contract.

Termination payments

In case of dismissal other than for gross or willful misconduct (faute grave ou lourde), the employee is entitled to different payments pursuant to the provisions of the applicable collective bargaining agreement and to French law. This would include severance pay, compensation in lieu of notice whether it is performed or not and compensation in lieu of paid holidays.

In addition and if the dismissal is considered unfair (see 4.1 above), the employee can claim damages for unfair dismissal before the court. In companies with at least 11 employees and for employees with at least 2 years of service, the amount of damages is at least equal to 6 months of their total compensation (base salary plus bonus, as the case may be). The amount of damages awarded by the court mainly depends on the employee’s situation on the date of the hearing (i.e., whether or not he/she is still unemployed) and the employee’s efforts in his/her search for a new job.

In addition, the company would have to reimburse the unemployment authorities for the benefits paid by such authorities to the employee, for a maximum of six months of such benefits.

Conversely, the termination of a works contract entered into between a contracting company and an independent worker is not subject to French labor law. Accordingly, the termination of the works contract is governed by the rules set out by the parties in the contract and by the general principles of the French Civil Code applicable to the termination of contracts.

Consequently, the termination of a works contract does not usually trigger the payment of any severance pay or damages, except if provided for by the contract or awarded by the courts in the event of an abusive breach of the contractual relationship, which is rarely admitted by the courts.


As mentioned above, notwithstanding the fact that a worker is registered with the French Social Security scheme for independent workers, it could be determined that there in fact exists an employment contract, if the independent worker provides services to the contracting company (donneur d’ouvrage) in such a way that it gives rise to a legal superior-subordinate relationship.

The following rules apply to the reclassification of a works contract into an employment contract.

Independent worker’s request for reclassification

A presumed "independent worker" can ask for the reclassification of his/her work contract into an indefinite-term employment contract at any time during the performance of the works contract or after its termination, if he/she can prove that a legal superior-subordinate relationship with the contracting party exists. Such a request must be submitted to the Employment Tribunal, which has exclusive jurisdiction over this issue.

Authorized agent/inspector’s request for reclassification

The URSSAF inspectors are not empowered to reclassify a works contract as an employment contract.

However, on the occasion of an inspection of a company with regard to the payment of social security contributions, the URSSAF inspector may consider that a presumed independent worker is in fact an employee. In such a case, the URSSAF authorities are entitled to make any social adjustment necessary, and the state sickness insurance fund ("caisse primaire d’assurance maladie") is entitled to affiliate any presumed independent worker to the general employee scheme ("régime salarié").

Consequences of the reclassification

Under labor law

Back pay and damages for loss of benefits

If the Employment Tribunal rules that an employment contract exists – which is necessarily an indefinite-term employment contract – the employer will have to comply with all labor law provisions regarding the employee, such as the statutory 35-hour work week, regulations on overtime, paid leave and rules relative to a potential dismissal.

Furthermore, the employee will benefit from the provisions of both the industry-wide applicable collective bargaining agreement and any company collective bargaining agreement.

In addition, there is a real risk that the worker will claim damages for all kinds of benefits that he/she would have received had he/she worked for the company from the beginning as an employee rather than an independent worker.

Indeed, pursuant to his/her newly reclassified employment contract, the employee could request that the Employment Tribunal order the employer to pay for any overtime performed as well as for all the benefits he/she would have been entitled to as an employee. These benefits should be considered salary-related sums, whose payment could also be requested before the Employment Tribunal. The statute of limitations for salary-related items is five years. The employee may also try to claim such benefits as damages, and not salary-related items, since the statute of limitations for damages is thirty years.

The employee could also file a claim for damages regarding other benefits, such as compulsory and/or optional profit-sharing rights. Though amounts relative to profit sharing are not considered salary-related sums, the employee may nevertheless request the payment of these sums before the Employment Tribunal, as they were acquired within the scope of the employment contract. As mentioned above, the statute of limitations for said amounts is not five years, as is the case for salary-related sums, but thirty years.

Back pay and damages for unfair dismissal

In case of reclassification of a works contract into an indefinite-term employment contract, the termination of this indefinite-term employment contract will automatically be considered an unfair dismissal, given that the dismissal procedure will not have been abided by, notably with regard to the preliminary meeting and the absence of real and serious grounds.

Therefore, in addition to the claims listed under 6.1.1 above, the worker should be entitled to request before the Employment Tribunal that the former employer be ordered to make the following payments: (i) severance pay provided for by the collective bargaining agreement, (ii) compensation in lieu of notice, (iii) compensation in lieu of paid vacation and (iv) damages for unfair dismissal.

In addition, pursuant to Article L.324-11-1 of the French Labor Code, an employer guilty of resorting to undeclared work must pay 6 months' salary to the individual concerned, when the work relationship ends. However, according to case law, such compensation cannot be cumulated with the severance pay provided for by the collective bargaining agreement, but can be cumulated with any damages relating to the termination of the employment contract, such as compensation in lieu of notice, compensation in lieu of paid vacation, damages for unfair dismissal – depending on the loss suffered by the employee.

Joint liability in the event of undeclared work

The Employment Tribunal could charge the employer with resorting to undeclared work ("travail dissimulé"). Indeed, pursuant to Article L.324-10 of the French Labor Code, "undeclared work is prohibited", and "work is considered undeclared by concealment of salaried work when an employer intentionally eludes one of the formalities provided for in Articles L.143-3 and L.320 of the French Labor Code", that is to say, when an employer knowingly fails to deliver a pay slip or to make the statutory prior registration of new employees.

Different authorized agents can be allowed to carry out an investigation on potential undeclared work and submit a report ("procès-verbal") directly to the public prosecutor’s office. According to Article L.324-12 of the French Labor Code, these authorized agents include Labor Inspectors and comparable agents, judiciary police officers and agents, agents of the Direction régionale des impôts et des douanes (Regional tax and customs division), and URSSAF inspectors (e.g., such an offence can be established by the URSSAF inspector when carrying out a control of the company with regard to social security contribution payments).

According to Article L.324-13-1 of the French Labor Code, "any person, charged with having resorted, directly or through an intermediary party, to the services of an individual performing undeclared work, is held, with the latter, jointly and severally liable to the payment of mandatory taxes and contributions as well as of penalties and surcharges owed by same to the Treasury and social protection bodies; to the payment of salaries, indemnities and contributions owed by same pursuant to the employment of employees, who were not the subject of one of the formalities provided for in Articles L.143-3 and L.320 of the French Labor Code; where applicable, to the reimbursement of the sums corresponding to government aid that was allocated to him/her".

Accordingly, the employer found guilty of undeclared work is jointly liable with the employee for the payment of social security contributions (both the employer’s share and the employee’s share) and the employee’s additional income tax that may be due.

Under social security law

Since the amendment of Article L.120-3 of the French Labor Code, when an independent worker obtains the reclassification of his/her status into that of an employee, this no longer implies the retroactive recovery of social security contributions.

Hence, the Social Security authorities may only request that the company pay all social security contributions due from the date of this reclassification.

However, the consequences differ if it is proven that the employee status was intentionally not declared to the URSSAF (i.e., if the employer deliberately decided not to register an employee with the URSSAF and did not pay social security contributions to such authorities).

In such a case, the employer would be required to pay to the Social Security authorities all the contributions it should have paid over the last three years had it declared the employee status, since three years is the statute of limitations for social security contributions.

Under criminal law

  1. Failure to make the statutory prior registration of new employees ("déclaration préalable à l'embauche")
  2. The employer that failed to comply with this obligation is liable to a fine of €1,500. In addition, the company is liable to a fine of €7,500.

  3. Undeclared work ("travail dissimulé")
  4. Pursuant to Article L.362-3 of the French Labor Code, the employer that knowingly failed to deliver a pay slip or make the statutory prior registration of new employees is liable to up to three years' imprisonment and to a fine of up to €45,000 and may incur, in certain cases, additional sanctions.

    Furthermore, the company is liable to a fine of up to €225,000.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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