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French workers are highly productive despite short working hours – but for how much longer?

The French working week is famously one of the shortest in Europe, but despite that the country regularly appears towards the top of worker productivity lists. However is all that about to change?

French workers are highly productive despite short working hours - but for how much longer?
A court's clerk office in France (Photo by JEFF PACHOUD / AFP)

The 35-hour week is the official length of the working week in France and it gives France one of the shortest working weeks in Europe.

Introduced 19 years ago by Socialist Prime Minister Lionel Jospin, it was intended as an economic measure to cut unemployment but has unsurprisingly become highly popular with workers who say it is a key factor in the healthy work:life balance that many French people enjoy. 

READ ALSO: Ten mistakes to avoid when working in France

But despite the shorter working week, France regularly comes out well in international productivity comparisons – proving that when the French are at work, they’re working hard.

There is also the fact that exceptions to the 35-hour week for certain kinds of workers mean that many people in France work longer hours than you might think. 

In the UK the standard working week is 40 hours, while people cannot (for the moment) work more than 48 hours unless they opt out of the European Working Time Directive. The USA is famed for its tough working culture and in 2014 a Gallup poll found that the average full time worker worked a whopping 47 hours per week.

But despite the difference in hours, since 1970, France has consistently been at or near the top of productivity comparisons with other EU and OECD countries.

And the most recent data analysis is no exception to this, the Conseil Nationale de Productivié report into productivity and competitiveness of France within the Eurozone again gives the country a healthy score.

The report says: “France is a country with a high level of productivity, which is similar to that of Germany. However, both productivity measures have slowed down in France and in the OECD since the late 1990s;”

The report, which all EU countries produce, goes on to issue a stark warning for French people who might be tempted to rest on their laurels in terms of the country’s productivity.

The authors warn of a serious skills gap in France, with people already in the workplace not developing their skills and schools not equipping pupils with the skills they will need for employment.

The report states: “The skills of the French workforce are below the OECD average and that there is hardly any sign of improvement.

“This is particularly problematic given the growing requirements related to technological change.”

Among the problems identified was a skills mismatch between the skills that people have and the ones they need to drive greater productivity.

The report says that there is a huge gap in skills between school leavers, with the high performers being well above the European average but poor performers (who are overwhelmingly from less affluent families) having significantly worse performance than the EU and OECD averages.

The authors are also concerned about low innovation levels within companies and warn that, while France does have companies that are at the cutting edge of new technologies and innovation, many other companies are lagging far behind.

France has also been slower than many other countries to embrace the productivity benefits of ICT and technology advances.

READ ALSO: EXPLAINED: Why is France’s 35-hour week such a sacred cow?

The French employment laws are famously worker friendly and give a high level of protection to employees, but the report’s authors say they cannot judge whether that is overall a bad thing which hinders innovation from companies or a good thing that fosters high levels of employee loyalty and productivity.

The culture at French workplaces has recently been under some scrutiny during the case of former France Telecoms bosses who were prosecuted after a wave of suicides from their staff.

It came as the company was moving from being state-owned to partially privatised as Orange France and when French companies as a whole were under pressure to become more competitive.

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The Local spoke to Hugues Poissonnier, an academic at the Grenoble School of Management, who said that the culture at France Telecom changed “too quickly, impacting employees more”. 

“It is an extreme example and it is difficult to talk about ‘French workplace culture’ as one thing,” he said. “You see different cultures in different kinds of companies.”
 
However, Poissonnier believes that French workplace culture is being slowly eroded, giving the gradual disappearance of the famous two-hour lunch break as an example.
 
“This was a tradition very specific to France but over time emphasis has been placed on what managers believe to be more productive which is working more rather than valuing the bonds that are created between colleagues when they eat and spend time together away from their desks.
 
“Long lunches are now seen as a waste of time but they have many benefits, including energising workers half way through the day.”
 
This is one of the reasons the younger generation are less engaged with their work life, he said, along with a decrease in loyalty from employers towards their staff.

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TAXES

Explained: France’s exit tax

Planning on leaving France? You may, depending on your circumstances, be charged the 'exit tax'.

Explained: France's exit tax

Like some other European countries, France does have an exit tax for those (French or foreign) who are leaving the country. It’s known by the English name l’Exit tax.

However, it won’t affect most people.

Only those who have been tax resident for a minimum six years of the 10 years immediately before they permanently move out of the country are liable to pay an exit tax – if, that is, they own property, titles or rights worth a minimum of €800,000, or that represent 50 percent of a company’s social profits.

If that affects you, the best advice is to seek expert individual financial advice before moving out of France for good. The relevant page on the French government’s impot.gouv.fr website says it is possible to defer payments, and some relief is available.

Because of the relatively high figures involved, this tax is irrelevant for most people. That said, however, you will still have to inform tax authorities that you are moving out of the country because you may still have income, property and capital gains taxes to pay.

Income tax

You must inform the tax office that you are moving and give them your new address so that your tax declarations can be transferred to your new address.

You are liable for tax on everything you earned in France prior to your departure as well as on any French earnings that are taxable in France under international tax treaties that you earned after your departure.

The year of your departure, you declare your previous year’s earnings as normal – declarations in spring 2024 are for earnings in 2023.

A year later, you will have to declare any earnings taxable in France from January 1st up to the date of your departure, and any French-sourced income taxable source until December 31st of the year of your departure.

If you continue to have any French-sourced income – such as from renting out a French property – you will have to declare that income annually, using the non-residents declaration form.

Property taxes

You will have property taxes to pay if you own a French property on January 1st of any given year – whether it is occupied or not. 

Property tax bills come out in the autumn, but they refer to the situation on January 1st of that year, so even if you sell your property you will usually have the pay a final property tax bill the following year.

Moreover, if you receive income from property in France or have rights related to that property (such as shared ownership or stock in property companies), as well as any additional revenue connected to the property, during the year you leave France, you will be required to pay taxes on these earnings.

If any property assets in France exceed €1.3 million on January 1st of a given year, you may also have to pay the wealth tax (IFI).

READ ALSO What is France’s wealth tax and who pays it?

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Capital gains tax 

If you sell your French property or share of a French property, you may be liable for capital gains tax at a rate of 19 percent. It will also be subject to social security contributions at the overall rate of 17.2 percent.

Capital gains tax varies depending on how long you have owned the property and whether it was a second home or your main residence.

READ ALSO How much capital gains tax will I have to pay if I sell my French property?

The good news is, if you move to another EU country, or any country that has a specific tax agreement with France, you may be exempt from capital gains tax for non-resident sellers on the sale of a property that was your principal residence in France.

If you move elsewhere, you may be able to claim exemption on capital gains tax up to €150,000. As always, you should seek expert financial advice.

Tell Social Security

Inform social security that you are leaving France permanently – and return your carte vitale if you have one. If you do not, you may be liable for any benefits you receive to which you are no longer entitled.

More mundane tasks involve informing utility and water companies, your internet provider, if you have one, the phone company, your insurance companies, banks – and La Poste, who will be able to forward your mail for up to 12 months, for a fee…

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