HR & Payroll: employer obligations and best practices in 2026

Updated March 2026 ”“ Human resources and payroll management is one of the most regulated functions in business. The slightest breach can result in URSSAF (French social contributions authority) adjustments, industrial tribunal disputes or tax penalties. This guide presents the main employer obligations in France in 2026.

The Pre-Employment Declaration (DPAE)

The DPAE (formerly DUE) must be carried out before the employee takes up his position (at the earliest 8 days before). It is transmitted to URSSAF and automatically triggers:

• ▸Registration of the employee with Social Security if he or she is not yet there;
• ▸Affiliation to the supplementary pension fund;
• ▸Adherence to occupational medicine;
• ▸The opening of the right to unemployment insurance.

⚠️ The absence of a DPAE is punishable by an administrative fine and constitutes a presumption of hidden work (article L. 8221-3 of the Labor Code).

The employment contract

The employment contract formalizes the conditions of employment. In France, the CDI is the normal and general form of the employment contract (article L. 1221-2 of the Labor Code). The CDD can only be concluded in cases exhaustively listed by law (replacement, temporary increase in activity, seasonal employment).

Mandatory information in the employment contract:

• ▸Identity of the parties
• ▸Start and end date (CDD)
• ▸Qualification (job title, conventional classification)
• ▸Gross remuneration (base salary, contractual bonuses)
• ▸Duration of work (full-time or part-time)
• ▸Place of work and possible mobility clause
• ▸Applicable collective agreement
• ▸Trial period (duration and renewal conditions)

The employment medical examination

All new hires must receive a pre-employment medical examination from the competent Occupational Health Service (OSH). For high-risk positions (noise, handling, night work, etc.), this visit takes the form of a medical fitness examination prior to taking up the position.

The pay slip

The employer has the legal obligation to provide a pay slip to each employee each time remuneration is paid. Since the Labor law of 2016, the simplified pay slip is compulsory for all companies.

Mandatory information on the pay slip:

• ▸Identification of the employer and employee
• ▸Work period
• ▸Number of working hours (with distinction between normal / additional / additional hours)
• ▸Gross salary
• ▸Details of social contributions (employee and employer share) by type
• ▸Amount of taxable net
• ▸Net payable before tax
• ▸Amount of withholding tax (PAS)
• ▸Net paid
• ▸Annual totals

The Nominative Social Declaration (DSN)

The DSN has been the reference social declaration in France since 2017. It replaces all previous social declarations (DADS, DUCS, etc.). The employer sends each month, no later than the 5th or 15th of the following month depending on the number of employees, a DSN file summarizing all the payroll data of its employees.

The DSN automatically feeds:

• ▸Calculation of URSSAF contributions
• ▸Retirement rights (AGIRC-ARRCO)
• ▸Daily allowances from Social Security
• ▸Rights to unemployment insurance (France Travail)
• ▸Calculation of the IR withholding tax

⚠️ Late or incorrect submission of the DSN is punishable by a 5% increase in contributions due, with a minimum of €1.5 per employee per month.

The right to paid leave

All employees acquire 2.5 working days of paid leave per month of work, or 30 working days (5 weeks) per year (article L. 3141-3 of the Labor Code). The acquisition reference period is set by collective agreement or, failing that, from June 1 N to May 31 N+1.

Important since 2024: Following a decision of the Court of Cassation (September 24, 2023) and the law of April 22, 2024, employees on sick leave (of professional origin or not) now acquire paid leave for the entire duration of their leave. Check that your pay slips are up to date with this major development.

Paid vacation pay

Paid vacation compensation is calculated according to the most favorable method between:

1. ▸Maintenance of salary: 1/12th of leave taken × 12 months of average gross salary
2. ▸The rule of tenth: 1/10th of the gross remuneration received during the reference period (12 months)

Profit-sharing

Optional device allowing employees to be associated with the results or performance of the company. The profit-sharing bonus is exempt from social security contributions (except CSG/CRDS) within the limit of 75% of the Annual Social Security Ceiling (PASS) per beneficiary and per year (i.e. approximately €34,000 in 2026).

Participation

System mandatory in companies with 50 or more employees. Participation represents a share of profits distributed to employees according to a legal formula. It is blocked for 5 years (except in cases of legal early release).

The Company Savings Plan (PEE) and the PERCO

The PEE allows employees to save in the medium term with an employer contribution (up to 300% of the employee's payments, within the limit of 8% of the PASS). The contribution is exempt from social security contributions and deductible from the company's results.

The URSSAF regularly carries out controls of employers' payroll practices. The main adjustments relate to:

• ▸Benefits in kind (vehicle, company accommodation, telephone) not declared or poorly evaluated;
• ▸professional expenses exceeding the ceilings or not justified;
• ▸Expense reports that are abusive or without supporting documents;
• ▸Undeclared overtime;
• ▸Self-employed worker statuses reclassified as employees;
• ▸contribution exemptions (LODEOM, ZFU, apprenticeship) incorrectly applied.

The Hayot Expertise firm provides outsourced payroll management for VSEs and SMEs with 1 to 150 employees, mainly in Paris and Île-de-France:

• ▸Preparation of pay slips each month
• ▸Transmission of the DSN within the legal deadlines
• ▸Management of sick leave, work accidents, maternity leave
• ▸Preparation of end-of-contract documents (account balance, Pôle emploi certificate)
• ▸Advice on social optimization (profit sharing, PEE, mutual)
• ▸Assistance during URSSAF checks

📍 58 rue de Monceau, 75008 Paris | 📞 01 48 48 24 14 | 📧 contact@hayot-expertise.fr

Outsource your payroll with Hayot Expertise