step by step - impatriation

making choices

When deciding to welcome a foreign employee to France, as an HR, some of the first questions are “what labor laws will be applicable to this employee ? ” and what “social security scheme will he be subject to ? ”. "What will his status be ? ", "Will he be considered as seconded or expatriated ? Why not having him sign a “local” contract ? ". These are confusing concepts for many.

Therefore, in order to avoid all confusions and help to ease the assignment to France, it is necessary to clarify the following concepts :

General definitions

The general definition of an “impatriate” is the following : it is a foreign employee who works in a company in France for a temporary period.

The definitions provided below are those usually used by most firms since to determine the particular status of its impatriate population. These are not legal definitions, but terms most commonly used.

Expatriate : In general, an expatriate is someone who benefits from a total expatriate package. He is sent to France for a period of at least two years, he is guaranteed the same social security benefits (or equivalent benefits) as per his home‘s healthcare scheme, he is paid premiums, benefits from a housing, car benefit-in-kinds, etc.

"Local" employee : In general, A “local” employee is a foreign employee who is hired locally. His home local contract is terminated or suspended for the duration of the assignment while a French “local” contract is signed. Therefore, he has the compensation of a French local employee, receives at least a minimum wage, contributes to the French mandatory social security scheme and does not receive any particular premium or benefit-in-kind.

"Local +" employee : “Local +” employee is an employee hired under a French “local” contract with certain premiums or benefit-in-kinds. For example, he benefits from a social security coverage equivalent to the one he benefited from in his home location or he benefits from a housing benefit-in-kind in France.

Split : A “split” is, in general, an employee with two work contracts in two different countries, or at least who works in two distinct countries. The reason to have two contracts can either be for legal or financial matters. A “split” employee can also benefit from premiums or benefits-in-kind.

Our website discusses mostly expatriate/impatriate assignments. However, if you wish to ask any questions concerning other types of assignments, please feel free to contact us or visit our blog.

The employee status in regard to social security

This topic can be confusing. Indeed, the term « impatriation » is not a term that exists in the French social security general code. Therefore, an employee impatriated and subject to French social security contributions will be considered as an « expatriate » for French social security purposes.

The employee seconded is subject to the mandatory social security scheme of his home location. The work contract of the home country remains applicable.

How to choose between the two status ?
The choice can be imposed to the employer. Secondment is only possible for citizens of the European community and for countries outside of Europe with whom France has signed a totalization agreement. You will find attached this list of countries on the following site : Centre des Liaisons Européennes et Internationales de Sécurité Sociale (CLEISS).

If you can choose between a secondment and an expatriation to France, the following reasons can also influence your decision :

- The cost of the French social security scheme is higher than the home social security scheme. More information on this can be found on the section Cost.

- Practical aspects can always play in favor of one situation or another : the expatriate, being subject to the French mandatory social security scheme, will need to have French payslips, the employer will have to register the employee (and maybe the firm) to the French social security authorities. The employee seconded must only contribute to the home mandatory social security scheme. A secondment requires fewer administrative obligations and the employee remains on a social security scheme he understands with only certain modifications (see below).

- The length of the assignment also matters, since a secondment can only last for a couple years.

Administrative obligations 
For a secondment, it is necessary to obtain a certificate of coverage from the competent authorities. For a secondment within the European community, it is necessary to obtain an A1 (formerly E101).

You will find on the CLEISS site numerous information concerning French social security obligations when assigning someone to France.

For an expatriate employee, the employee must be registered with the French social security authorities. In this case, either you request some assistance from the French employer or you can ask for assistance from a specialized firm.

Modifications to look for
In case of secondment, the social security coverage remains the same. The employee is still affiliated to the mandatory health, retirement, unemployment schemes, etc. In France, one of the main differences in regard to French mandatory social security results from the tax status of the employee. Therefore, if the employee is not a French tax resident, it is not necessary to subject the employee to the CSG/CRDS. Indeed, these two contributions are only due by French tax resident but the contribution to sickness will be equal to 6,45% instead of 0% for French tax residents.

For the expatriate employee, the main difference is that the employee is no longer subject to the home mandatory social security scheme but to the French mandatory social security scheme.

Labor law

There is no legal definition for a secondment or an impatriation in regard to French labor law.

Normally, the employee expatriated signs a new work contract with the French company, and the work contract in the home location is suspended for the duration of the assignment.

The employee seconded is tied to his home employer by his original work contract while on assignment in France.

Therefore, the importance of defining the labor law applicable in the addendum of the work contract during the assignment is  to identify clearly the employer's obligations toward the employee, and the rights of this latter.