Short-term contracts – end of French taxation scheme

On 28 March 2017 the social partners met to take action on short-term contracts and unemployment insurance. The taxation scheme created on 1 July 2013 is canceled in order to allow companies to hire more.

Other changes were thought to include an increase in employers’ contributions.

The abandonment of taxation of fixed-term contracts

This scheme, introduced in 2013, has been redesigned to boost hiring in companies. The CDDs of a few months can thus be multiplied.

This new decision will be brought to the knowledge of the employers who will then be able to envisage a wave of hiring for replacements or periods of high activity.

This change takes place both for the fixed-term contracts for an increase in activity and for the fixed-term contracts for use in the company.

Revaluation of employer contributions

This new Memorandum of Understanding provides for an increase in corporate contributions for all short-term CSDs. The new calculation will work as follows:

  • For a fixed-term contract lasting less than or equal to 1 month concluded for an increase in activity, the rate of employer contributions increases from 4 to 7%
  • For a fixed-term contract with a duration of between 1 and 3 months, the rate of employer contributions increases from 4% to 5.5%
  • For usual fixed-term contracts, which have a maximum duration of 3 months, the employer contribution rate increases from 4% to 4.5%.

The implementation of this new system will take place as soon as new fixed-term contracts are signed for the increased activity. For fixed-term contracts, the contribution will be changed in 18 months. Employers will therefore have to comply with this new legislation for all fixed-term contracts.