Employer of Record Company in France: What International Employers Need to Know
An employer of record (EOR) company is a third party that legally employs staff in France on your behalf, becoming the formal employer on the payslip while your business directs the employee’s day-to-day work. This lets you hire in France without setting up a French entity — but you must understand that French labour law still governs the employment relationship, and using an EOR does not eliminate your compliance exposure.
DAIRIA Law advises and represents international companies choosing between an EOR, a French branch/subsidiary, or direct hiring. Below we explain how an EOR works under French rules, where the legal risks sit, and when this model is the right choice for your expansion into France.
What an Employer of Record Company Actually Does in France
An employer of record is a French-registered company that signs a compliant French employment contract with the worker, runs French payroll, withholds and pays social-security contributions (URSSAF), and administers statutory benefits. Your company contracts commercially with the EOR and reimburses payroll costs plus a service fee.
In practice the EOR handles:
- A compliant employment contract in French, respecting the applicable collective bargaining agreement (convention collective).
- Payroll and social charges — French employer social contributions typically add roughly 40–45% on top of gross salary, remitted to URSSAF and the pension/health funds.
- Statutory registration — pre-hire declaration (Déclaration Préalable à l’Embauche) with URSSAF before the employee’s first day.
- Leave, working-time and benefits administration, including the mandatory occupational health enrolment and supplementary health insurance (mutuelle).
- Termination processing according to French dismissal law.
Critically, an EOR is not a temporary staffing agency (entreprise de travail temporaire). Genuine labour leasing (prêt de main-d’œuvre) for profit is tightly regulated in France, and unlawful supply of labour is prohibited under Article L.8231-1 of the French Labour Code. A compliant EOR structures the relationship as a portage or service arrangement rather than illegal labour lending — a distinction you must verify before signing.
Your Ongoing Obligations Even When Using an EOR
Using an EOR does not make French labour law disappear. The person works under your instructions, so you retain practical and, in some cases, legal responsibility.
The employment contract still follows French rules. French law favours the open-ended contract (contrat à durée indéterminée, CDI). Fixed-term contracts (contrat à durée déterminée, CDD) are only permitted for defined reasons and durations under Article L.1242-1 of the French Labour Code; misuse can lead to automatic requalification as a permanent contract with damages.
Working time is capped. The statutory working week is 35 hours under French law. Hours beyond that are overtime with premium pay, and the applicable collective agreement may impose additional rules. You cannot instruct the employee to routinely exceed legal limits simply because an EOR is on paper.
Health, safety and anti-harassment duties reach you. As the entity giving day-to-day orders, you may share liability for working conditions and workplace harassment prevention. The EOR cannot fully shield a client that directs the work.
Dismissal must be justified. French law requires a real and serious cause (cause réelle et sérieuse) for any dismissal, and a strict procedure applies. Even where the EOR issues the termination letter, the underlying decision — and the reimbursement of severance and litigation costs — usually flows back to you commercially.
The Misclassification and Permanent Establishment Risks
The two biggest risks with the EOR model are misclassification and the creation of an unintended establishment.
Misclassification of independent contractors. Many companies use an EOR precisely to convert a French “freelancer” into compliant employment — a smart move, because French courts routinely requalify disguised independent contractors as employees when a subordination link exists. The tests are the power to give instructions, to control execution, and to sanction. If you keep treating French workers as contractors instead of routing them through proper employment, you face back-payment of social charges, penalties and undeclared-work exposure. Concealed employment (travail dissimulé) is a criminal offence under Article L.8221-1 of the French Labour Code.
Permanent establishment and durable presence. While tax is outside our scope, note that a fixed employment presence in France can trigger scrutiny about whether your business has a genuine establishment. An EOR reduces but does not automatically eliminate this question, especially for senior commercial staff who conclude contracts. Take specialised advice before deploying client-facing employees through an EOR.
Co-employment and joint liability. Where a client company exercises the full authority of an employer, French courts may recognise a co-employment or requalify the arrangement, exposing your company to direct labour claims. Documenting the split of responsibilities between you and the EOR is essential.
EOR vs. Setting Up a French Entity: How to Choose
The EOR model is fast and light; a French subsidiary is more robust for scale. The right answer depends on headcount, timeline and strategy.
| Criteria | Employer of Record | French Subsidiary / Branch |
|---|---|---|
| Setup time | Days to a few weeks | Several weeks to months |
| Upfront cost | Low | Higher (incorporation, capital, accounting) |
| Number of employees | Best for 1–5 | Better for growing teams |
| Control over HR | Shared with EOR | Full control |
| Long-term strategy | Market testing, short term | Permanent French presence |
| Compliance liability | Shared but not eliminated | Direct, but fully controlled |
Choose an EOR when you are testing the French market, hiring one or two people quickly, or bridging the period before incorporating. Choose a French entity when you plan a durable presence, need direct control of employment and collective relations, or expect to build a team beyond a handful of employees.
DAIRIA Law assists international employers in auditing EOR agreements, verifying that the underlying French contracts comply with the correct convention collective, and preparing the transition from an EOR to a wholly owned French subsidiary when the business scales.
Key Compliance Checklist Before Signing With an EOR
Before you engage an employer of record company for France, confirm:
- The EOR is French-registered and remits contributions to URSSAF and the mandatory funds.
- The applicable collective agreement has been correctly identified — it dictates minimum salary, notice periods and benefits.
- The contract type (CDI or a legally justified CDD) matches the assignment.
- Working-time rules, overtime and any forfait jours (annual-days) arrangement are compliant for the role.
- The allocation of liability for dismissal, severance and harassment claims is clearly stated in your service contract.
- Data protection obligations (GDPR) for employee data are covered.
- The arrangement does not amount to unlawful labour lending.
FAQ
Is using an employer of record company legal in France?
Yes, when the EOR is properly structured as a French employer or compliant service provider and does not constitute unlawful supply of labour prohibited under Article L.8231-1 of the French Labour Code. The EOR must run genuine French payroll, register the employee with URSSAF, and apply the correct collective agreement. Have the arrangement reviewed to avoid requalification.
Does an EOR remove my company’s labour-law liability in France?
No. Because your company directs the employee’s daily work, you may retain shared responsibility for working conditions, harassment prevention and, commercially, for dismissal costs. The EOR is the formal employer, but French courts look at who actually exercises the authority of an employer. Contractual allocation of risk is essential.
Can an EOR hire French employees on fixed-term contracts?
Only within limits. Fixed-term contracts are permitted for defined reasons under Article L.1242-1 of the French Labour Code — such as replacing an absent employee or a temporary increase in activity — and for capped durations. Improper use leads to requalification as a permanent CDI plus damages. For ongoing needs, a permanent contract is required.
How much do employer social charges cost through an EOR?
Employer social contributions in France typically add around 40–45% on top of the gross salary, remitted to URSSAF and the pension, health and unemployment funds. The EOR passes these through in its invoice, along with the mutuelle and its service fee. Exact rates depend on salary level and the applicable collective agreement.
When should we replace the EOR with a French subsidiary?
Generally once you have a durable French presence, several employees, or a need for direct control over HR and collective relations. A subsidiary gives full control and can be more cost-efficient at scale, though it carries direct compliance duties. DAIRIA Law assists employers in planning the transition and transferring employees compliantly.
Working with an employer of record in France? DAIRIA Law advises and represents international employers on EOR agreements, contract and collective-agreement compliance, misclassification risk, and the move from an EOR to a French subsidiary. Contact us before you sign to secure your hiring in France.
This article is general information on French labour and social-security law and does not constitute legal advice.