Loan of labor between companies

Verified 02 August 2024 - Directorate for Legal and Administrative Information (Prime Minister)

A company may make use of the labor loan by making its employees available to another user company for a fixed period in order to cope with recruitment difficulties in certain sectors, for example. This labor loan must, in principle, non-profit. What are the terms of the inter-company labor loan? We're doing an update on the regulations.

The labor loan scheme allows an employer to to make employees available on the other company during a fixed duration.

The labor loan must not, in principle, be for profit. The lending company shall invoice the user company only for the wages paid to the employee, the social security contributions relating thereto and the professional expenses reimbursed to the person concerned in respect of the making available. The lending company must not make any profit of the operation.

The labor loan between companies must be at non-profit making. However, there are exceptions:

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General case

In the following situations, the for-profit labor loan is authorized:

  • Temporary work by temporary agencies 
  • Companies of timeshare work 
  • Manikin Agency by the holder of the Manikin Agency License
  • Loan of sportsmen made available to the delegated sports federation as a member of a French team
  • Provision of employees to a trade union.

Lending of labor to a young company, an SME or a facility of general interest or public utility

A large company of at least 5 000 employees or belonging to a group of at least 5 000 employees may make its employees available to a user company with a view to:

  • Enabling the EU to improve the skills of its workforce
  • Fostering job transitions
  • Establish a business partnership or a partnership of common interest.

User company must complete at least one of the following conditions:

  • To be a structure of general interest or public interest giving entitlement to tax advantages linked to the company patronage
  • Have less than 8 years of existence
  • Being a SMB: titleContent less than 250 employees.

Please note

The requirement of 5 000 employees does not apply where the loan concerns a structure of general interest or public utility.

The term of the loan is limited to 3 years maximum.

The lending company may charge the user company an amount lower than the cost of wages, social security charges and professional expenses incurred in connection with the operation.

This type of provisioning cannot be done within the same group.

Companies have to comply with certain obligations that are different depending on the situation.

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General case

Employee agreement

The labor loan requires prior agreement of the employee concerned.

This agreement is written in one agreeable to the employment contract signed by the employee.

The amendment to the contract of employment must contain the following elements:

Supply Agreement

The lending company and the user company must sign a release agreement.

The agreement shall contain the following information:

  • Duration of supply 
  • Identity and qualification of the employee 
  • Method of determining the wages, social security charges and professional fees charged to the user company by the lending company.

Lending of labor to a young company, an SME or a facility of general interest or public utility

Employee agreement

The labor loan requires the prior to the written agreement of the employee concerned. The law does not provide for any special formalism.

Supply Agreement

The lending company and the user company must sign a contract for each employee.

The agreement shall contain the following information:

  • Duration and purpose of the labor loan operation
  • Identity, qualification of the employee and tasks
  • Method of determining the wages, social security charges and professional fees charged to the user company by the lending company.

Please note

If the employee refuses the offer of making available, he or she may not be disciplined, dismissed or discriminated against.

Rules for informing and/or consulting the ESC: titleContent differ depending on the situation:

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General case

In the lending company, the employer must consult the ESC: titleContent prior to the implementation of a labor loan and to inform him of the various agreements signed.

The ESC must also be informed if the position held in the user company presents particular risks to health or safety.

In the user company, the ESC must be informed and consulted prior to the reception of employees made available in this context.

Lending of labor to a young company, an SME or a facility of general interest or public utility

The employer shall make available the ESC: titleContent information on the number of supply agreements concluded and the types of posts occupied in the user company by the employees made available.

This information is entered in the Economic, Social and Environmental Database (EESDB).

During the loan period, the employment contract between the employee and the lending company is neither broken nor suspended.

The employee continues to belong to the staff of the lending company and to benefit from treaty provisions. The remuneration shall remain paid by the lending company.

The user company shall be responsible for the conditions under which the work is performed during the making available.

At the end of the loan period, the employee returns to his original or equivalent job, without any change in career development or remuneration.

Please note

The making available does not call into question the protection enjoyed by a protected employee (example: a member of the ESC: titleContent).

The labor loan unlawful is punishable by up to 2 years' imprisonment and a fine of €30,000 (amount raised to €150,000 for a legal person).

These penalties can go as far as:

  • 5 years imprisonment and €75,000 fines in the following cases:
    • Offense against more than one person
    • An offense committed against a person whose vulnerability or dependency is apparent or known to the perpetrator.
  • 10 years imprisonment and €100,000 fines where the offense is committed in an organized band.

Additional penalties may be imposed (e.g. prohibition of certain professional activities, exclusion from public procurement, publication of the judgment in newspapers).

Administrative sanctions may also be imposed (e.g. withdrawal of public aid, reimbursement of public aid already received, temporary closure of the company).

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  • Telephone administrative information - Allo Public Service

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      For more information on this topic, you can contact Allô Service Public.

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