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FRANCE: New Law to Combat Fraud in Framework of Posted Workers

New Law to Combat Fraud in Framework of Posted Workers

A posted worker is one sent by a company in one EU member state to provide short-term services for a company (client or affiliate) in the host EU member state.  France's Act of July 10, 2014 (Act) against unfair social competition translates into French law a directive of the European Union (EU) of May 15, 2014, laying down a set of mechanisms to prevent and punish any violation or circumvention of posting procedures in the EU.

Most of these provisions are incorporated into the code of labor with immediate application.

Declaration of Posting

The Act strengthens the compulsory nature of the posting declaration, which was already required by Articles R. 1263-3 and the Labor Code.  The employer sends a statement of detachment to the labor inspectorate having jurisdiction over the work site.  The user or the client who contracts with the foreign service provider must ensure that a compliant declaration has been made.  In the absence of a compliant declaration, the end user and contracting parties may be jointly and severally liable for payment of an administrative fine of up to €2,000 per posted employee.  This penalty may be increased to €4,000 in case of repeated violations.  The total amount of the fine may not exceed €10,000.  The Act provides that the declaration of posting must be recorded in the statutory register of personnel of the company that hosts posted workers.

Due Diligence and Financial Responsibility of the Payer

The Act strengthens due diligence and accountability of the user or client.  The user or client has an obligation of "vigilance" with respect to the collective housing conditions of employees of the provider.  In case of failure, the user or client may be required to defray the costs of the collective accommodations of employees.

The required diligence of the user or client also applies to compliance by all contractual parties with labor laws.  In case of noncompliance, the user or client must order the other party to comply and, if the noncompliance persists, inform the public authorities.  If the user or client breaches these obligations, it is subject to a penalty prescribed by decree of the Conseil d'Etat.  In case of noncompliance with payment of minimum wages or if the user or client has failed to fulfill its obligations to order compliance and inform the authorities of noncompliance if it persists, it may be held jointly and severally liable for payment of salaries, allowances, and charges.

Online Publication of Sentences

The Act provides for the publication of court penalty sentences for a period of up to two years on a dedicated website.

Unions' Right to Sue

The Act creates the right of union representatives to defend before the courts the rights of a posted employee without having to show a power of attorney from that employee.  It is sufficient that the employee be informed and not object within 15 days.  The employee can always intervene in the proceedings initiated by the union and stop them at any time.

Consequences for Foreign Employers of Posted Employees

These new control mechanisms and sanctions apply to all foreign employers of employees posted to France.  The foreign employer posting employees as part of a service to a client in France should therefore ensure its compliance with labor laws applicable in France, including regulations on collective accommodations.  In the event of noncompliance, the foreign employer may receive an order from the user or French client to stop the offense.  Moreover, if the user or client does not issue a compliance order when appropriate or inform the authorities of persistent noncompliance, such user or client company may itself be penalized in France and be held severally liable for the cost of collective accommodations or payment of salaries, allowances, and expenses payable as compensation to the posted worker.

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