Doing Business in France! (#4) (credit)  
French specificities...   Facts and figures ....

Doing business in France is not as difficult as one could expect, given many aspects of the image of the country (bureaucratic and even "Socialist", nobody works, etc.) but labor laws may look surprising compared to US managerial practices. Here are a few examples :

  • Do you know what the seuils sociaux (labor thresholds) are? French employers complain heavily and bitterly about the seuils sociaux and keep declaring that their existence is one the reasons for the high level of unemployment in France. What is this about ? Many provisons of the French Labor Code are directly linked to the number of employees, for example :
    • the rate of certains taxes becomes higher when the staff of a company changes from 9 to 10, 19 to 20 or 49 to 50 ; for example, the rate of the tax to finance education and training organizations (formation professionnelle) changes from 1.05% to 1.6% when the staff changes from 19 to 20 ;
    • certain employees' organizations must be created and their functionning is a cost for the company (roughly estimated at 4% of total wages) : a representative of the employees (délégué du personnel) (9 to 10), an employees' association (comite d’entreprise) and a Health and Safety committee (CHSCT) merge by law in 2017 under the name Comité Social et Economique (49 to 50), etc.
    • new obligations for employers : financing employees commuting cost (versement transport) (9 to 10), financing employees housing cost (Fonds national d’aide au logement + cotisation logement) and some positions reserved for handicapped people (19 to 20), mandatory sharing of the profit with the employees (participation), a mandatory annual negotiation on wages with the unions (negociation annuelle obligatoire), additional constraints on lay-offs (plan social) (49 to 50), etc.
This is why, in France, there are 2.4 times more companies with a staff of 49 than with a staff of 50! It is hard to be an entrepreneur in France…
  • The Medaille du Travail is another French specificity in business. By law, if you have worked 20 years for the same employer, the State and your employer show their recognition by offering you two gifts : the State gives you a speech and a medal (paid by the employer) and your employer gives you money (generally one month's salary). You're happy with the two gift (especially the latter) but your employer is not, especially if you stay until the next levels (30, 35 and 40 years) where you get another medal (Silver, Gold, Vermeil) and another gratification. Two comments :1/ in France, it is considered positive to remain with the same company during your whole career and, 2/ in France, the State does the pleasant job and companies pay.
    A personal memory! Webmaster Philippe Rochefort being awarded the Medaille du Travail by former President of France, then mayor of Neuilly, Nicolas Sarkozy in 2000 (you can't see it from the picture, but he is not congratulating me : he is saying "Neuilly is currently negotiating a loan with your bank and I would appreciate if you could do something about the rate ...")
  • More to come...
  • In spite of its often poor (popular) image, foreign investors like France and generally acknowledge the following main strengths : skilled manpower, high level of education and research, excellent infrastructures, central location in Europe, quality of life. Read about the strengths and weaknesses of France !

  • France is at the top of the list of countries receiving foreign investments (currently #3). With around a third of the total, the USA are (consistently) the first investor in France : see detailed figures. Main sectors ar : software and IT service, commercial and financial services, .... Read about US firms in France.

  • Working with the French can be quite different from working with Americans : read about it. The French do not see their job the same way Americans do (read more about it) and see a table about the mutual image of American and French managers !

USEFUL TIPS ! Beware of school vacation ! In France, all schools, from kindergarten to college put their students on vacation around two weeks every six weeks (except July and August, which are vacation months for everybody), in all for around 18 weeks a year. During these periods, it is more difficult to organize a meeting, make an appointment with your doctor, your hairdresser or your mechanic because some of them take this opportunity to leave on vacation too and many of those who won't be on vacation will be less available (they have to take care of idle kids). Since France is divided into three zones which have different dates of vacation, vacation time represents almost half of the year and, for instance, organizing a meeting of regional managers is a nightmare (there is always an idiot to say "it is not vacation for us but it's vacation period in zone X"...). Click for more details.

  • French legislators and government have no experience of private companies! The proportion of French politicians with a personal experience of private business is incredibly low. In a National Assembly of 577, only 17 entrepreneurs and 60 employees of private firms ; except 10 farmers, 20 MDs and a handful of lawyers, all the others are civil servants (State or local authorities' or teachers). The situation is the same in the Senate with more than 150 civil servants out of 288 senators. It is even worse in the government : in 2014, only 7 (out of 31) members of the cabinet have ever set the foot in a private company! In the 2014 Left Wing majority, almost all members of the Parliament and government are (or were) civil servants or are professional politicians. The situation is very different in other countries : in the US, 43% of the representatives are entrepreneurs or managers of private firms, in UK 38% of the Chamber of Commons, etc. No wonder, many laws are difficult or impossible to implement in a private company. A recent example is the Law on Hardness voted in 2014 which is just impossible to implement. (read more about it). Another example is the law on part-time jobs. (Source IREF 2014 reported in Le Figaro July 21, 2014). More about French politics and politicians.

  • However, there is now (2014) some Good News about business in France.

  • More to come : still under construction....

DID YOU KNOW THAT? To illustrate the excessive complexity of French labor laws, Herve Mariton, a French deputy, put on a scale the French and the Swiss labor codes in the Post Office of the National Assembly. Results : France 1.546 kilos, Switzerland 191 grams (8 times less). Switzerland wins ! (July 2014)
To related pages : working in France (#1), the anatomy of a paycheck (#2), history of American firms in France, education, life in France, etc...

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Harriet Welty Rochefort writes articles and books about France and the French. Order her books :

  • "Joie de Vivre", Secrets of Wining, Dining and Romancing like the French, St.Martin's Press, New York, 2012
  • "French Toast, An American in Paris Celebrates The Maddening Mysteries of the French", St.Martin's Press, New York, 1999
  • "French Fried, The Culinary Capers of An American in Paris", St.Martin's Press, New York, 2001

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Together or separately, Harriet and Philippe speak about Intercultural Differences : click here for information.