How to benefit from zero charges on new employees recruitment

By Valérie Aston on 30 October 2009 · Viewed 3418 times · Questions

In December 2008 the Plan de Relance de l’Economie (economy recovery plan) launched a new initiative entitled Zéro Charges. Aimed at small and medium size companies with fewer than 10 employees, this scheme offered a 12 month exemption of employer’s social charges contributions charges patronale on new employees. Used by over 500 000 small companies so far, the deadline should be extended until June 2010.

Christine Lagarde, Minister of the Economy recently said on France Inter radio that she strongly hoped the zero charge scheme would be extended, allowing very small businesses to receive a total exemption of charges for twelve months for any job created by 30th June 2010. The law is currently being voted by the Conseil des Ministres as part of the loi de finance 2010.

Zéro Charges completely exempts small businesses from employer’s social charges contributions (charges sociales patronales) on the hiring of new employees paid the minimum wage, also called SMIC. This financial help comes to about 185€ per month for a full time worker on minimum wage. The exemption then decreasing for salaries up to 1.6 SMIC. The Government is responsible for compensating the Social Security fund and unemployment insurance, as the employer does not pay expenses for his employee.

So how does it work and could your company benefit from this scheme? The applications criteria are flexible enough, as it applies to the hiring of a full-time or part-time, permanent (CDI Contrat a Durée Indéterminée) or fixed-term (Contrat à Durée Déterminée) contract of more than a month. It also applies to the renewal of a fixed term contract for a period exceeding one month, or for a CDD turning into a CDI. Interim contracts, however, are not eligible.

Valerie Lemiere: Start Business in France

About the author: Valérie Aston

I've been helping people who want to start or already have a small business set up in France since 2009. After graduating from a Master of Business Administration (MBA) degree, I worked as a senior marketing consultant in the UK and France for various International companies. I worked as a conseillère en création d'entreprises (senior business advisor) for BGE here in France and run this independent business on a daily basis.