The concept of Employer of Records EoR in France


​​​​​​​​​​​​​​​​​​​​​​​published on 9 April 2024 | reading time approx. 3​​ minutes

Is the concept of EoR known in your country? Is the concept of EoR regulated by law in your country?

In the strict sense, the notion of "Employer of Record"(EoR) is neither defined nor regulated by French legal provisions. In practice, some companies refer to this concept, but what they actually do is to organise the “lease” of employees or a provision of services (which are regulated by law) and which do not fall within the notion of EoR.

Is the EoR concept similar to temporary employment in your country?

As mentioned above, the notion of EoR does not exist in France. The “lease” of employee would be the closest concept to a French concept of EoR.

In case of the “lease” of employees („mise à disposition de personnel“), French labour law strictly prohibits the leasing of workforce – except for temporary employment agencies ("entreprise de travail temporaire")  bene­fiting from specific approvals – if it is exclusive and for profit. 

The “lease” of employees is an exclusive, non-profit loan of employees: Only the employee's salary, social security contributions and professional expenses are to be charged to the user company. In addition, strict rules must be observed (loan agreement between the companies, amendment to the employee's employment contract, information of the respective works councils, etc.).

Special features of the activity within the framework of the EoR concept or temporary employment

In case of “lease” of employees from companies that are not a temporary employment agency or a placement company ("entreprise de portage salarial"), the rules are strict. 

The “lease” of employees is a legal operation according to which a company lends an employee to another company for a limited period of time. During the “lease” of employees, the employee continues to be part of the lending company's workforce, so that in principle he is entitled to all the provisions of the collective agreement that he would have had, if he had performed his work in the lending company.

However, the user company is responsible for the conditions under which the work is carried out during the “lease”. In particular, the employee has access to the collective facilities and means of transportation available to the employees of the user company.

As mentioned, several rules must be respected: 
  • loan agreement between the companies, amendment to the employee's employment contract, information of the respective works councils, etc; 
  • concerning the invoicing, it is only possible to invoice the remuneration, social security contributions and expenses (no margin).

What are the special tax features of the EoR concept in your country?

The EoR, through which its employees are provided to a foreign principal, could materialise a permanent establishment, particularly if these employees could be considered as the dependent agents of the foreign principal or, for example, if the EoR can be considered as a local office of the foreign principal. However, each examination must be undertaken on the facts and circumstances of the individual case.

The question of the location of the employer is important with regard to the “temporary assignment clause” provided for in the double taxation treaties. According to this temporary assignment clause, an employee, under certain conditions, can be exclusively taxed on their wages in the country of their tax residence, for example, in country A. Consequently, workdays in country B can still remain subject to taxation in country A. One of the conditions of this temporary assignment clause is that the employer is not established in country B. If this is the case, the temporary assignment clause does not apply, and consequently, the workdays in country B become taxable in country B and no longer in country A.

In this context, it should be noted that in principle, according to French literature and jurisprudence, the concept of employer is generally to be interpreted in its "legal" sense (e.g., who is the employer on the basis of the employment contract) and not according to who could be considered the employer "economically". How­ever, a de facto employer may arise from special facts circumstances in individual cases.

How do you anticipate the concept of EoR evolving in your country from your perspective?

As the law currently stands, it seems unlikely that this concept will develop in France.

As explained, some companies claim to be EoR, but this will inevitably be assigned to a different legal concept. Moreover, in the contracts, the foreign company bears all the risks related to the performance and termination of the employment contract (beyond the additional costs).


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Céline Kammerer


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Christophe Jolk

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