Process of umbrella companies
Work contracts in France are among the most rigid of Europe, so employers are reluctant to hire new staff and opt for on-demand services. At the same time, highly-qualified workers have embraced this type of collaboration with enthusiasm owe to the fact that traditional employment represents limited options for them.
The French government officially recognized the concept of umbrella companies in 2008. Since then, certain regulations have occurred in order to improve the legal framework. An order dated 2 April 2015 states that “the employee has the expertise, qualification and autonomy that allows him to seek his own customers and agree with them the conditions of his performance and price” and this definition adds clarification to the consultant figure.
France has been one of the most avant-garde countries in relation to the innovative work systems that benefit freelancers. Although in much of the world the scheme of the self-employer is growing and there is more and more demand from companies for their hiring, many countries are behind with their legislation in this regard, unlike those where the umbrella companies operate.
- The birth of umbrella company concept in France dates back as far as 1980 thanks to some unemployed executives who associated in order to offer consulting services while maintaining the status of employee. But it wasn’t until 2000 when the first companies of wage portage were born.
- Two years before, in 1998, the first representative professional body had appeared (National Union of Portage Salarial, SNEPS) and later, in 2004, the second union was created (National Federation of Salary Portage, FeNPS). Those were decisive moments to lay the foundations for the protection of consultants’ rights.
- The wage portage was registered in the Labor Code in June 25, 2008. Portage is then defined as « a set of contractual relationships between a company organized porting a person scope and client companies which include the wage-earning system and the remuneration for its delivery to the client by the porting company. It guarantees the rights of the person brought on his contribution of customers. «
- The two existing unions merged in 2012, thus creating the Professional Union of Employment in Portage Salarial (PEPS), which is currently the only representative of the sector. In 2015, the 2008 law was revised and its conditions were perfected. Finally, 2017 was the year in which the collective contract specific to the wage transfer was created.
What’s new in the 2015 Order
A governmental order definitely secured the profession with the reinforcement of the legal framework. It secures the conditions applicable to porting companies, employees and customers. Decree was published under the number 2015-1886.
- The conditions under which an umbrella company arrangement can be used with a business customer.
- The types of work contracts allowed between the employee and the umbrella company.
- Commercial provision that can be included in the contract between an umbrella company and the client company.
- The obligations of the umbrella company.
- The rules of internal governance applicable within an umbrella company, professional elections, voluntary participation in benefits, mandatory participation in profits and savings plans for employees.