France passes bill to give extra financial support to self-employed

France’s Parliament has definitively adopted a bill aimed at providing extra financial support for the country's estimated 3 million self-employed.

France passes bill to give extra financial support to self-employed
Government minister Jean-Baptiste Lemoyne. (Photo by Bertrand GUAY / AFP)

The bill will cover all freelance, contractors, self-employed and small business owners and provides financial help if their business is struggling or fails.

It creates a single status for self-employed workers which distinguishes between their professional and personal assets, while – in theory – it becomes easier for independents to access state benefits if their business fails or is in trouble, recognised as a rising problem as many small businesses have struggled during the pandemic.

A compromise agreed in joint committee prior to the final votes meant the bill was passed unanimously in the Senate and the Assembly, with MPs from the left of the political spectrum abstaining from the vote, claiming its measures were “insufficient”. 

When the long-awaited law comes into force in about three months, independent workers’ personal assets will be exempt from seizure in the event of bankruptcy – currently only their principal residence is protected.

However, Assembly rapporteur Marie-Christine Verdier-Jouclas warned: “We should not expect miracles, because the most important creditors, including banks, will continue to require special securities on certain assets of entrepreneurs, including their personal property.”

Minister of Small and Medium Enterprises, Jean-Baptiste Lemoyne said: “We expect banking institutions to take all responsibility in the implementation of this reform. We will be very vigilant.”

Meanwhile, the €800-a-month allocation des travailleurs indépendants (ATI) allowance will be extended to include any, “total and definitive  and definitive cessation of activity that is not economically viable”.

“To estimate whether the activity is not viable, we will look if it has a drop in income of at least 30 percent,” Lemoyne said.

Created in 2018, the ATI is an alternative to unemployment benefits and is paid for six months.  It is currently only available to self-employed persons in receivership or liquidation. The government estimates that nearly 30,000 self-employed people could benefit from the ATI each year under the new rules, compared to about 1,000 currently.

According to a study by the Association pour le droit à l’initiative économique (Adie), 93 percent of self-employed entrepreneurs consider it “urgent” that their social rights are more closely aligned with those of employees. About 59 percent want unemployment rights as a priority and 49 percent want better coverage of professional risks.

At the end of January, the government announced additional financial aid for certain categories of self-employed workers affected by the health crisis.

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Tips for waiters in France are no longer taxed

The French government has introduced an official tax exemption on all tips for service staff, in an attempt to increase the attractiveness of the job.

A waiter works at a cafe in Paris.
A waiter works at a cafe in Paris. A new law states that service staff who are tipped do not need to pay tax on these payments. (Photo by Bertrand GUAY / AFP)

Tipping in France is optional and the French themselves have a bit of a reputation of being particularly stingy when it comes to paying extra for good service. 

Waiters and waitresses are not particularly badly paid in France, and it is a job that has a higher status than is some countries like the US and the UK, where it’s often seen as a low skill job done by students or temporary workers. 

Despite this, leaving a bit extra – une pourboire, literally ‘for a drink’ – for the waiter or waitress is still considered a friendly, if optional, gesture. 

READ MORE How much should you tip the waiter or waitress in France?

A new law brought in on January 1st decreed that tips issued to service staff in cafes, restaurants and hotels are now exempt from tax.

Previously, all tips were taxed – but in practice, many waiters did not declare bank notes or coins gifted to them by customers. Card payments were harder to avoid declaring. 

The new law states that whatever the mode of payment, tips are no longer considered taxable income. 

The rule is set to last until the end of 2023 and is aimed at “reinforcing the attractiveness of restaurant jobs particularly affected by the Covid-19 epidemic,” according to the official service-public website

According to a report from the statistical service of the labour ministry, the hotel and restaurant sector lost 237,000 staff in the twelve month period leading up to February 2021. Successive waves of Covid an accompanying restrictions have hurt the sector badly. 

READ ALSO ‘Give me a grumpy Paris waiter over US-style service any day’

But there is hope that the restaurant sector will bounce back. Figures released today show that the French economy grew by 7 percent in 2021, which means most people will have more money to spend on eating out – and perhaps on tipping waiters. 

Service staff earning more than €2,565 pre-tax per month will not benefit from the new tax exemption – although only a tiny minority will fall into this category.

In France, a waiter’s service charge is typically included in the bill, which is partly why most French people don’t leave tips. 

If you do want to leave a little extra, many French people say that five percent of the original bill is considered an appropriate amount.