A recent French decree to combat fraud in relation to the posting of workers and illegal work reiterates the requirement to notify in advance the French labor inspectorate of all assignments to France – whatever the length of the assignment – to appoint a representative in France, and to keep relevant documentation, as specified. Foreign companies sending assignees to France should be mindful of the rules as failure to comply may result in fines and criminal prosecution.
A recent French decree1 has been issued to combat fraud in relation to the posting of workers and illegal work. The decree reiterates the requirement to notify in advance the French labor inspectorate of all assignments to France – whatever the length of the assignment – to appoint a representative in France, and to keep relevant documentation, as specified.
The decree sets out the responsibility of the receiving company (client or contractor) for failures to comply.
The new rules took effect on 1 April 2015.
A non-French employer must declare in advance all assignments to France, whatever the length of stay and the purpose of the stay. In addition, receiving companies are held jointly responsible for compliance failures. Foreign companies sending assignees to France should be mindful of the rules as failure to comply may result in fines and criminal prosecution.
Clients or contractors are required to check that the sending employer has fulfilled its obligations. They must request that the sending company rectify its compliance failures and inform the labor inspectorate.
The so-called loi Macron, currently undergoing parliamentary review, is proposing to increase the fines to up to EUR 150,000 and to provide the labor inspectorate with the power to suspend the execution of a contract for a period of time, whilst maintaining employees’ rights under their employment relationship. (For prior coverage of the loi Macron, see Flash Alert 2015-013, 29 January 2015.)
Sending and receiving employers must familiarize themselves with the requirements so that they may effectively fulfill their obligations and avoid potential penalties and other sanctions.
1 See Décret n° 2015-364 du 30 mars 2015 relatif à la lutte contre les fraudes au détachement de travailleurs et à la lutte contre le travail illégal, published the Journal Officiel n°0076 du 31 mars 2015 page 5872. The decree is in application of Articles 1 to 5, 9 and 10 of Law No. 2014-790 of 10 July 2014 to fight unfair social competition which itself is a transposition of EU Directive 2014/67 implementing Directive 96/71 / EC on the posting of workers.
For further information or assistance, please contact your local KPMG International member firm GMS or People Services professional or the following GMS professionals with FIDAL Direction Internationale at tel. +33 (0) 1 46 24 30 30:
Alain Loehr, Partner
Ann Atchadé, Partner
Marie Lynn Simmons, Partner
Estelle Cupillard, Partner
Gérôme Gbaya, Partner
Cyril Klajer, Partner
The following information is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.
The information contained in this newsletter was submitted by FIDAL Direction Internationale in France. The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
© 2018 FIDAL, a French socit dexercice libral forme anonyme directoire et conseil de surveillance. FIDAL is an independent legal entity that is separate from KPMG International and its member firms. All rights reserved.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.