Employment Grants in France

There are a few types of employment grants in France. This is especially true for grants for professional training and apprenticeships. An “alternance” contract is one under which a new employee, typically a young or inexperienced person, combines working in a particular industry so as to to gain practical and valuable experience in tandem with a vocational training course. By its nature, this is an attractive option for businesses which are in the market for new recruits. In addition, the training of an employee in alternance also entitles the employer to access a number of financial supports and exemptions which reinforce the appeal of this form of recruitment.

Depending on the type of alternance contract chosen, an apprenticeship contract or a professional training contract, the business may benefit from a number of forms of financial aids according to the size of the enterprise and the form of alternance training proposed.

Here is a table summarising the different forms of support available to businesses which are willing to recruit employees under training or apprenticeship contracts:

Summary of supports available for Alternance recruitment

	Professional Training Contract	Apprenticeship Contract	Beneficiaries	Amount
Small business young apprentice support	NO	YES	Small businesses; less than 11 employees	Up to €4,400
Small to medium sized business Recruitment subsidy	YES	NO	Small to medium sized businesses; less than 250 employees	Up to €4,000
Regional apprenticeship subsidy	NO	YES	Small businesses; less than 11 employees	Up to €1,000 minimum per year
1^st Apprentice / additional apprentice subsidy	NO	YES	Small to medium sized businesses; less than 250 employees	€1,000 minimum
*Flat rate Pôle emploi* subsidy 26+ years old**	YES	NO	ALL	€2,000 maximum
Aid for the recruitment of jobseekers aged 45+ years	YES	NO	ALL	€4,000 maximum
Aid for the recruitment of a disabled person in alternance	YES	YES	ALL	Up to €9,000 in 2 supports
Apprenticeship tax credit	NO	YES	ALL	Dependant on the number of apprentices
Deduction to the apprenticeship tax	YES	YES	ALL	–
Exemptions to social security contributions	NO	YES	ALL	–
Subsidy for the recruitment of the 1^st employee	YES	NO	Small businesses; less than 11 employees	Up to €4,000

Details relating to subsidies for alternance training contracts

Subsidy for the 1^st employee

A subsidy is available to help small businesses when they hire their first employee, and is not limited to any particular type of sector or business. The subsidy can range from €1,000 to €4,000.

The subsidy is transferred to the employer at the end of each quarterly period at a rate of a maximum of €500 per quarter maximum.

Exemption from social security contributions

This type of subsidy applies to all businesses provided that they are signatories to an apprenticeship contract during the current calender year. The exemptions apply to the social security payments paid on the apprentice’s salary, employer and employee contributions, national insurance and unemployment insurance.

These exemptions may apply throughout the entire term of the apprenticeship contract.

Reduction to the apprenticeship tax

At present there are three forms of tax deduction which may apply to the apprenticeship tax: in-kind donations, training costs and the “bonus alternants”.

Concerning the cost of training organised in a professional setting, the deduction is limited to 3 % of the total amount of tax due. Thus the daily rates of training costs are fixed at:

€25 for category A
€36 for category B

In-kind donations are deductible from the amount due out-of-quota.

Lastly, the “bonus alternant” concerns only those businesses which employ more than 250 workers, at least 5% of which are apprentices, with a maximum of 7% employed under alternance contracts.

Apprenticeship training tax credit

The tax credit is calculated based on the annual average number of apprentices and applies for the 1^st year or the training cycle of the apprentices.

This credit concerns businesses which are taxed on actual profits, as well as exempt businesses, which offer apprenticeship contracts that incorporate diplomas or equivalent professional qualification, such as a higher technician’s diploma, or a university level degree from an institute of technology recognised by the national registry.

Subsidies for the recruitment of a disabled person under an apprenticeship contract:

Agefiph currently offers 2 types of aid to encourage businesses to recruit disabled people under apprenticeship contracts, therefore permitting the latter to acquire a qualification at work.

These two forms of aid are:

Subsidy relating to the signing of the apprenticeship contract.
Subsidy for the perpetuation of contract following the apprenticeship.

The level of subsidy is prorated depending upon the type and duration of the contract.

Subsidies for the recruitment of jobseekers aged 45+ years under a professional training contract

This is a subsidy available from the Pôle Emploi which concerns all businesses which are party to professional training contracts.

As a requirement, these businesses must have hired a jobseeker aged 45 years or older under a CDD or CDI contract and the person concerned must not have formed part of the workforce of the business during the 6 months prior to the start date of the contract. The subsidy is limited to €2,000 and is to be paid in two parts on condition that the contract is still in vigour at the end of its 10^th month.

This can be cumulated with the subsidy available for employing jobseekers aged 26 years and over, therefore bringing the total amount to €4,000.

Flat rate Pôle emploi subsidy for employees aged 26+ years

This is a subsidy available from the Pôle Emploi which concerns all businesses which are party to professional training contracts.

As a requirement, these businesses must have hired a jobseeker aged 26 years or older under a CDD or CDI contract and the person concerned must not have formed part of the workforce of the business during the 6 months prior to the start date of the contract. The subsidy is limited to €2,000 and is to be paid in two parts on condition that the contract is still in vigour at the end of its 10^th month.

This can be cumulated with the subsidy available for employing jobseekers aged 45 years and over via a professional training contract.

Regional apprenticeship subsidy

This bonus concerns businesses which employ less than eleven people when they employ under an apprenticeship contract.

It amounts to a minimum of €1,000 per year of training. Furthermore, this bonus functions in addition to the subsidy for the recruitment of a first or additional apprentice.

Small to medium sized business recruitment subsidy

This subsidy is intended form small and medium sized businesses of less than 250 employees, and which pay salaries up to 1.3 times the minimum wage.

The business must employ at least one person under a professional training contract of at least 6 months. The employee concerned must have been hired no later than the 30^th of June 2017.

The subsidy amounts to €500 per quarter during the term of the contract to a maximum of 2 years, i.e. €4,000 in total.

Small business young apprentice subsidy

This is a flat-rate aid from the state for small businesses with less than 11 employees. To be eligible to claim it, a business must hire an apprentice who is under 18 years of age.

The subsidy amounts to €1,100 per quarter during the term of the apprenticeship contract, and is paid at the end of each quarterly period throughout the contract’s duration. An attestation that the apprenticeship contract has been signed and is being honoured must be provided.

About the Author

The author of this article, Eoin P. Campbell, is an honours law graduate (LL.B) and qualified as a solicitor in 2007. His professional experience includes personal injury litigation, business law, the law of contract, employment law and European law. Eoin is currently lecturing in the law faculty of a prestigious university based in Lyon, France.

N.B. Please note that the information contained in this article is intended to be advisory only. If you intend to commence employing people in France you are advised to discuss the issues raised above and any concerns you may have with an employment professional.