MACRON ORDONNANCES – Encouraging the sublease of employees to start-ups and small companies

Macron Orders implement a new case of sub-leasing to favor and secure the sub-leasing between a group or large company on the one hand and a small company or start-up on the other.

The idea is to entice large companies to sub-lease employees to small companies or start-ups, in order for them to benefit from the knowledge of the staff, or even create partnerships.

What is sub-lease?

The sub-lease is codified at articles L. 8241-1 et seq. of the French Labor Code and is defined as the operation by which a company sends one or more employees to work in another company to perform a defined mission.
Initially, the sub-lease of employees was only authorized by the French Labor Code in the event of a non-lucrative sub-lease, safe for interim agencies, “portage salarial” (umbrella companies) for shared-time companies, and modeling agencies.
In other words, the sub-lease was only legal where the sub-leasing company only invoices the salary, social charges and professional expenses of the sub-leased employees, safe for limited listed exceptions.

New case of sub-lease provided by the Macron Ordonnance:

Article 33 of the ordonnance n°2017-1387 dated 22 September 2017 introduces a new case of sub-lease by creating a new article, article L. 8241-3 of the French Labor Code, in order to help small companies and start-ups.
The sub-leasing carried out under the conditions set forth in article L. 8241-3 of the French Labor Code is deemed to be non-profit, even when the sub-leasing company invoices more than the mere the salary, social charges and professional expenses to the hosting company.

The cumulative conditions set forth in article L. 8241-3 of the French Labor Code are the following:
a group or company temporarily sub-leases its employees to a young, small or medium size company in order to improve the knowledge of its workforce, promote professional transitions or create a business or common interest partnership ;
the sub-leasing group or company should employ at least 5,000 employees. The hosting companies should either have less than 8 years’ existence at the date of the sub-lease or maximum 200 employees ;
the sub-leasing provided in said article is not possible within two companies of the same group and is limited to 2 years.

Is there any paperwork?

The sub-lease operation is formalized through three documents:
an addendum to the work contract be signed with the sub-leased employees;
a sub-lease agreement be drafted between the two companies;
the minutes of the information-consultation of the workers representatives, as the case may be.
Specific clauses listed by the French Labor Code should appear in the addendum and sub-lease agreement.

Is there a change in employers?

As a general rule, the sub-lease does not imply a change of employer: the employee’s work contract with the sub-leasing company is not terminated or suspended, and continues to benefit of all its provisions.
The sub-lease is in that respect different from a secondment, where the initial work contract is suspended.
The hosting company has to ensure that all applicable provisions within its company are complied with. This does not exonerate the obligation of the sub-leasing company of its own obligations, in particular regarding health and safety rules (for example, the obligation to enquire on potential hazards that exist on the premises where the employee will be working).

What are the penalties?

Failure to comply with these provisions, employers could face up to a € 30,000 fine and two years’ imprisonment (article L. 8243-1 of the French Labor Code). The fine may be increased to € 150,000 for a legal entity. Additional penalties may apply such as prohibition to exercise certain activities, suppression of State subventions (social charges exonerations for example), etc.

If you need additional information, please do not hesitate to contact Gaëlle DE THORE or Laura MICHL.