How a French Portage Salarial Differs from an Employer of Record (EOR)

Companies and entrepreneurs often confuse French wage portage and Employer of Record (EOR) services. While both involve a third company formally employing and paying a worker on behalf of the company that benefits from the worker’s services, there are important differences.

An Employer of Record (EOR) operates on a regional or global basis as the employer for companies that want to hire employees in other countries. A French wage portage company, or société de portage salarial, looks like an EOR, but is actually a staffing agency for freelance professionals and knowledge workers.

When hiring in France, you may need to consider each of these options.

Wage Portage Company vs. EOR

What is Wage Portage?

A business contracts a wage portage company when it needs workers in France who would otherwise work as freelancers or independent contractors. Wage portage involves three contracts:

• between the business and the wage portage company,

• between the wage portage company and its employee, and

• between the business and the employee that defines the project.

A wage portage employee cannot perform the same service for one client for more than three years.

Wage portage companies are regulated and must register with the government. They give legal protections to freelancers in France.

While a wage portage company is a legal employer, similar to an EOR with operations in France, employees of a wage portage company are freelance professionals who could be self-employed but work instead for the company. The employee may perform services for multiple businesses at the same time. The wage portage company is an intermediary between the business and the freelancer. Wage portage company employees benefit from the CBA that covers all wage portage companies and their employees.

How does wage portage work?

A wage portage company employee must:

• negotiate salary and other service conditions with the client and perform their work independently,

• be a professional with at least qualification level 5 (Bac +2) or at least three years of experience in the client’s industry, and

• submit their hours worked and time off to the wage portage company once a month.

The client must:

• use a wage portage arrangement for one-off, non-core activities or to fill an expertise gap,

• not use the wage portage company or its employee to replace a striking employee, or use them for personal services like childcare, gardening or tutoring,

• pay at least the monthly minimum wage set by the wage portage CBA, stated as a percentage of social security ceiling,

• pay at least 10% of the employee’s salary to a fund that pays the employee when they are out of work, and

• contract with the wage portage company and pay its service fees.

A wage portage arrangement works best for businesses seeking professional knowledge freelance workers such as designers, IT professionals, consultants, translators and editors. The worker enjoys the social security status of an employee with the freedom of self-employment. The client benefits by getting—and paying for—just the short-term specialist services it needs. A portage salarial in France helps both foreign businesses and French professional freelancers achieve their goals.

How does an Employer of Record work?

A business engages with an EOR service provider to hire employees for it in another country and, in some cases, to manage the company’s HR function there.

The business will partner with an EOR to:

• hire specialized talent in another country,

• explore new markets, or

• expand into a new market without incurring the costs of full-blown business operations.

For example, a business may want to hire a team of five workers who live in France. The EOR hires the workers and, as their employer, handles payroll, employee benefits, employee expenses and visa issues. It can even lease office space for the employees.

Using an EOR makes hiring a global workforce easy and eliminates many costs of setting up local operations—especially in France, which has more than 300 collective bargaining agreements (CBAs).

For more information about expanding your business within Europe, download the free guide below.