Entrepreneurship in France | Full-Time Employees Can Explore Part-Time Freelancing!
Are you interested in starting your own professional venture as a freelancer but don't want to forfeit the benefits of your current employment contract? There's an option that might be perfect for you: you can hold the status of both a freelancer and an employee.
Are you interested in starting your own professional venture as a freelancer but don't want to forfeit the benefits of your current employment contract? There's an option that might be perfect for you: you can hold the status of both a freelancer and an employee.
How can you become both a freelancer and an employee? What professions allow for the simultaneous possession of long-term employment contracts and freelancer status? What are the advantages of this part-time arrangement, and how does it affect taxation?
Before diving into the details, it's essential to understand the you have also other options as well. For example: Micco.
Micco stands as an all-in-one financial platform tailored for business creators, facilitating a comprehensive array of services. These include streamlined procedures for company registration, professional bank account establishment, capital deposit management, and more.
Micco's commitment to empowering business creators extends to:
- Effortless company registration processes
- Seamless professional bank account setup
- Convenient capital deposit management solutions
- A suite of additional financial tools and resources catered to entrepreneurs
With Micco, business creators can access a one-stop solution designed to streamline their financial operations and support their growth endeavors effectively.
Content:
- Can You Simultaneously Be a Freelancer and an Employee?
- What Are the Limitations of Part-Time Freelancing While Employed?
- What Social Systems Apply to Freelancers and Employees?
- How Does Taxation Work for Freelancers and Employees?
- Can Freelancer Status Be Combined with Managerial Positions?
- Pros and Cons of Being an Employee and a Freelancer Simultaneously
- Frequently Asked Questions
1. Can You Simultaneously Be a Freelancer and an Employee?
Yes.
You can engage in freelancing activities while being employed as a full-time or part-time employee. In principle, regardless of the type of activity you pursue (business, craftsmanship, or freelance work) and the nature of your employment contract (long-term, short-term, temporary, internship, etc.), you can hold both freelancer and employee status concurrently. This part-time arrangement allows you to enjoy all the benefits of freelancing while maintaining your job security.
💡 For instance, you can combine freelancing with running an online store since this profession doesn't require inventory management, providing you with the flexibility to pursue both.
2. What Are the Limitations of Part-Time Freelancing While Employed?
As an employee, you have the right to engage in freelancing activities at the same time, but you must still comply with certain regulations.
These requirements involve both clauses that may be included in your employment contract and your duty of loyalty to your employer.
Terms Related to Employment Contracts:Depending on your profession, industry, or level of responsibility, your employer may impose varying degrees of restrictions on your activities as an employee.
These limitations may prevent you from engaging in specific activities or even from working outside of your job.
📝 These obligations can be part of your employment contract or included in collective agreements applicable to your company.
- Non-competition Clauses:Before embarking on entrepreneurial activities, you need to check if your employment contract contains non-competition clauses.
- These clauses are designed to prevent employees from working for competing companies after their contracts end. They are only valid for specific timeframes and within specific geographic regions.
- Therefore, they do not apply during the period when you are bound by your employment contract but come into effect upon contract termination or expiration.
- Exclusivity Clauses:Your employment contract may also include an exclusivity clause, requiring you to work exclusively for your employer and not engage in other work. This restriction applies to various types of professional activities, whether they involve employment or freelance work. This prohibition remains in effect throughout your employment.
💡 If you wish to work as a freelancer under the constraints of an exclusivity clause, you can apply for an exemption from your employer. However, it's essential to obtain written consent from your employer to ensure there are no issues.
Employee's Duty of Loyalty:Every employee has a duty of loyalty to their employer. This includes refraining from:
- Engaging in freelance activities during working hours.
- Using materials provided during employment for your independent activities.
- Disparaging your company in any medium.
- Recruiting employees and clients of your company for your independent activities.
Therefore, if you want to simultaneously enjoy freelancer and employee status, you need to inform your employer that you have established your own freelance business. Failure to adhere to the duty of loyalty may result in penalties, including the prohibition of your activities or the payment of damages.
Professions Incompatible with Part-Time Freelancing:As an exception, certain professions cannot be combined with freelancer status. Some activities and occupations outright forbid holding both freelancer and employee statuses. These include:
- Healthcare professions (doctors, nurses, midwives, veterinarians, etc.)
- Legal and judicial professions (judges, lawyers, clerks, notaries, etc.)
- Accountants
- Certified accountants
- Agricultural occupations
- Insurance industry professions
- Civil servants
💡 It is possible to be a civil servant and a freelancer, but certain requirements must be met: If your employment contract is full-time, civil servants can only engage in specific part-time activities during their free time. This part-time arrangement is valid for two years and can be renewed for one additional year. After these three years, you need to choose one status over the other.If your employment contract is part-time (less than or equal to 70% of statutory working hours), you only need to inform your superiors.
3. What Social Systems Apply to Freelancers and Employees?
When you decide to simultaneously be a freelancer and an employee, you may encounter conflicting social systems:
- Employment activities fall under the general social security system, specifically the Basic Health Insurance Fund (CPAM).
- Freelance activities are part of the social security system for self-employed workers (SSI).
Therefore, when engaging in both employment and freelance activities, you must pay insurance contributions to both systems while remaining under the general social security system.
💡 The protection systems differ in terms of healthcare and retirement benefits.
Healthcare Coverage:In terms of healthcare coverage, social insurance is provided by the department in which you earn the most income.
- If your freelance activities are part-time, you will be covered under the Basic Health Insurance Fund (CPAM) to cover your employment activity.
- If your freelance activities constitute your primary source of income, you will be covered under the social security system for self-employed workers (SSI).
💡 When working part-time as both a freelancer and an employee, you have the right to choose the method of payment for healthcare expenses.
Retirement Insurance:When you hold both freelancer and employee statuses, your retirement insurance is considered a special system.
Although part-time activities won't allow you to retire early, your retirement benefits will consider both of your activities. Therefore, you will receive allowances from both institutions depending on the specifics of each activity.
4. How Does Taxation Work for Freelancers and Employees?
Your statuses as a freelancer and an employee will impact the taxes you owe. Both sources of income contribute to your taxable income, subject to income tax. Therefore, you must report and pay taxes separately for each activity.
- Reporting Freelancer Income: Income from non-employment activities must be reported on Form 2042-C-PRO. Depending on the nature of your activity, your income will be categorized as business income (BIC) or non-commercial income (BNC).
- Reporting Employee Income: Employee income must be reported under the "Wages and Salaries" category on Form 2042.
5. Can Freelancer Status Be Combined with Managerial Positions?
In general, it's rare to see freelancers holding managerial positions. However, it's more common to find managers who also engage in part-time freelancing.
Managers can become freelancers unless they are the majority shareholder self-employed workers or are already registered in the social security system for self-employed workers (SSI). Being engaged in self-employment already disqualifies them from freelancing.
Individuals compelled to register in the social security system for self-employed workers cannot become freelancers. These include:
- Majority managers of SARL (Limited Liability Companies)
- Associated managers of EURL (Sole Proprietorship with Limited Liability)
On the other hand, the following individuals can become freelancers:
- Minority managers of SARL/EURL
- Presidents of SAS (Simplified Joint-Stock Companies) and SASU (Simplified Joint-Stock Single-Member Companies).
6. Pros and Cons of Being an Employee and a Freelancer Simultaneously
Pros:
- Test the feasibility of your ideas while retaining employee status
- Diversify and increase your sources of income
- Can take leave to start your business
Cons:
- Paying contributions to two social security systems without dual protection
- Unable to contribute more than 4 quarters per year
7. Frequently Asked Questions
- Employee and Freelancer: Which Is the Primary Occupation?
- Generally, non-employee activities are considered the primary occupation. To make employment your primary occupation, you must work at least 1,200 hours within a year and earn an income at least equal to your income as a freelancer.
- Can I request leave to establish my freelance business?
- Any employee can apply for a part-time contract or entrepreneurial leave. To do so, you must meet the following conditions:
- Must have at least 24 months of work experience
- Submit the application at least two months in advance of the leave start date
- The unpaid leave lasts for one year and can be renewed once. During this period, you still have social security coverage.
💡 Tip: After the leave ends, you have a guarantee to return to your position or an equivalent position.
- Can I perform tasks for my employer as a freelancer?
- No, you cannot. Labor law prohibits being both an employee and a service provider for the same company. In fact, when you are an employee, you have a subordinate relationship with the employer, which does not exist under freelancer status.
- Can I accumulate employee and freelancer statuses and still qualify for unemployment benefits?
- It is entirely possible to simultaneously hold freelancer status and receive unemployment benefits. Therefore, you can enjoy full or partial employment return assistance (ARE).
💡 Note: You won't be eligible for these benefits if you voluntarily resign.
If you are currently considering starting a side business or freelancing in France, Micco can assist you in registering your individual enterprise and obtaining a professional bank account. Our professional team will ensure a smooth registration process for your business and provide you with a dedicated bank account to efficiently manage your financial affairs, making your entrepreneurial journey smoother.
