In companies, hiring, drafting of employment contracts, pay slips, calculation and declaration of social contributions and all other operations relating to the management of an employee are often complicated. We shall attempt in this article to give the reader a summary of these operations.
Formalities before hiring
Before any hiring, a nominative declaration called “DPAE” (déclaration préalable à l’embauche: declaration before hiring) must be sent to the URSSAF or the Mutualité Sociale Agricole (MSA). This declaration is compulsory, not doing it is punished by a strong penalty. Even when an employer hires the same employee through several successive contracts, he must make a “DPAE” per contract.
The “DPAE” is a declaration that allows to:
- Request the registration of the employer at the social security, unemployment insurance and occupational health service at the first hiring,
- Proceed to the enrollment of the employee in the social security scheme,
- Ask the hiring medical examination of the employee.
No labor administration agreement shall be obtained except in the case of hiring a young person under the age of 16 during school holidays or of a foreign worker.
At the time of hiring
The employee must undergo a medical examination before the end of the probationary period. In addition, the employer must register it immediately in the single staff register, which must contain all the salaries of the company in order of hiring.
The following information must be entered in the personnel register:
- Birth date,
- Employment and qualification,
- Date of entry and date of exit,
- Possibly the authorization of hiring.
The work contract
There are several forms of contract of employment that we will enumerate the main without providing details. However, it is obvious that an English speaking accountant will be able to give all the useful predictions for each.
- Full-time employment contract,
- Work contract of limited duration,
- Part-time work contract,
- Seasonal work contract,
- Contract of intermittent work.
It is very important to draft the contract carefully and to verify that it is fully in line with labor law and the collective agreement relating to the company’s sector of activity. An error in a contract of employment can lead to disputes and sentences of severe penalties.
When paying the remuneration, the employer must provide a voucher called a pay slip.
Mandatory information on the pay slip: the establishment of the pay slip is regulated by the Labor Code, which lays down several mandatory notices.
- Employer Information:
- Name, address of employer
- Reference of the organization to which the employer pays the social security contributions,
- Registration number under which the employer pays social security contributions,
- And APE code for companies registered in the INSEE directory.
- Information about the employee:
- Name and title of the employee’s employment;
- Position of the employee in the applicable conventional classification;
- Information on applicable legislation:
- The pay slip must indicate the name of the applicable collective agreement.
- Failing this, the references in the Labor Code concerning the length of holidays with pay and the notice of termination of the employment relationship should be specified.
- Monthly Payroll Information:
- Period and number of hours at which wages,
- Nature and volume of the lump-sum rate to which the salary of the employees relates under a lump-sum agreement,
- Indication of the nature of the basis for calculating wages when, exceptionally, this basis of calculation is not working time,
- Nature and amount of salary accessories subject to employee and employer contributions, such as bonuses and benefits in kind, for example,
- Amount of the employee’s gross remuneration,
- Nature and amount of all social and tax levied on gross remuneration (CSG, CRDS, employee contributions …),
- Net amount payable to employee and payment date,
- Where applicable, vacation pay dates and the amount of the corresponding allowance if a period of leave is included in the pay period,
- Amount of payment for public transport or personal transport costs
- Other mentions of the pay slip:
- It is obligatory to inform the employee that he must keep the pay slip without limitation of duration.
Every quarter or month (depending on the number of employees in the company), the employer must pay the deducted social security contributions to the employees as well as the employer contributions.
The main contributions are:
- Health and old age contributions,
- Unemployment contributions,
- the payment for supplementary pension,
- Occupational médicine,
- Professional training.
It can be seen that the hiring of an employee involves complicated operations which must imperatively be followed by a professional. An accountant can perform this work for the company in compliance with the legislation. This will avoid serious problems for the employer.
Finally, it should be noticed that very small companies can avoid a large part of the employment difficulties by using the “TESE”. This process can also have disadvantages, so it is advisable to contact a social law consultant at an accounting firm before choosing the “TESE”.
Please get in touch if you would like to talk to an English speaking Chartered-Accountant about your requirements.
Why not sign up for our newsletter!