What is Wage Portage ?
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Wage portage in France allows independent consultants to benefit the advantages of employee status while remaining autonomous in their activities.
The consultant concerned signs a contract with an umbrella company. Fees are converted into a wage. The consultant then enjoys his or her paycheck. In other words, wage portage consists of several steps :
- The independent consultant signs a contract with a wage portage company.
- The independent consultant is then an independent contractor.
- The independent contractor searches for his or her clients.
- The clients pay the invoice to the umbrella company.
- The company pays a monthly wage to the independent consultant.
It is important to stress that only a certified company can hire employees with this wage portage status. This constraint makes wage portage safer.
Types of contracts and labour law
The contract may take the form of a fixed-term contract (CDD in France) or an open-ended contract (CDI). The contracts are the same as for standard employees. Freelance contractors enjoy a specific framework. All these elements are included in the collective labour agreement on wage portage.
As an example, the independent contractors are completely free to define the commercial prospection strategy (Article 2), their schedule (Article 26), their business volume (Article 27) and their workplace (Article 23).
A portage contract ensures an efficient mix between entrepreneurship freedom and the safety of working as an employee.
How Umbrella Company services work ?
company wishing to work with independent contractors must follow a relatively simple procedure :
t is important to note that a mission under the wage portage system cannot exceed 36 months, meaning 3 years. On one hand, this prevents drifts, because a portage mission corresponds to a one-time job. On the other hand, the duration is still relatively long so that it allows to work in depth on certain subjects, if necessary.
The client company sets the commercial terms and the cost of the service together with the independent contractor. The client company may contact the umbrella company directly; this kind of contact allows to choose from several consultant profiles.
All companies can work with a freelance contractor. There are no constraints on this matter.
Calculating the cost of a portage mission
Compensation of independent employees is calculated per working day. Depending on the amounts collected, that will correspond to a certain number of working days.
The law sets a minimum gross remuneration of 2,483 €. Freelance contractors cannot set excessively low rates.
Missions under wage portage cover complex and qualitative services. These missions are considered as missions with high added value. For some companies, costs are lower when it comes to freelance contractors, compared with hiring new employees.
Payment of a Wage Portage service
The payment of the service provided is made to the umbrella company. In fact, the latter collects the fees to convert them into remuneration for the contractor. The freelance contractor provides the monitoring of payments. They set the cost of the service and give all the commercial elements to the umbrella company.
The attractiveness of Wage portage
In France there are more than 88,000 employees working under this portage system. This status is increasingly attractive to expert consultants; it offers many advantages to an independent contractor :
- Wage portage allows to combine several activities.
- The consultant can start a business without the need to create a company.
- The consultant pays his or her tax just like every other employee. He or she benefits from unemployment insurance and a more interesting pension.
- The freelance contractor can choose to work at certain times.
The missions provided by an umbrella company
An umbrella company carries out several missions for the consultant. These missions are, generally :
- Administrative management and activity tracking.
- Handling the contract and payslips.
- The safeguarding of documents.
- Legal and commercial support.
Thus, wage portage is a relationship of trust in which the independent consultant outsources all their administrative, social and accounting obligations to a portage company.
Furthermore, the umbrella company can ensure daily support if any difficulty should arise during the consultant’s activity. This is very helpful and provides real guarantees to independent consultants.
An independent employee will therefore focus exclusively on his or her mission. He or she is going to be more efficient than a conventional entrepreneur. The fulfilment of his/her mission is not disturbed. In some cases, freelance contractors are paid even if the mission has not been paid by the client. The umbrella company then pays its employees a salary in advance.
The positive aspects of Wage Portage
Wage portage status is rapidly expanding. The outlook is very positive. Studies conclude that there will be an increase in the number of independent contractors and in the total turnover.
The significant growth of wage portage will encourage new profiles, thanks to its extremely appealing prospects. It was once considered as marginal, and now it is becoming a normal and usual option for a specialist or a consultant.
The wage portage sector has experienced extraordinary growth as confirmed by the data provided by the PEPS. This association highlights the rapid evolution of wage portage in the past decade: France had only 15,000 independent contractors in 2006, against 88,000 at present.
In recent years, the total turnover of independent consultants has also experienced a significant and quantifiable rise. PEPS has shown a 50% increase in turnover between 2015 and 2017, going from 600 million euro to 900 million euro .
Wage portage is more and more appealing to both consultants and client companies. In fact, companies consider wage portage as particularly flexible. The expertise of independent employees is also particularly appreciated.
When I was consulting wage portage companies, I had the feeling when I met Links that we were sharing the same values. And I was not mistaken.
Links supported me for the first time on a mission in the DOM at 8 000 km from Paris.
Florian, my administrator, has always been reactive to my questions and have definitely a strong sense of the service that I would like to highlight and thank .
He did everything so that far from my roots, everything goes for the best for me in terms of wages.ERIC D., TRANSITION MANAGER