France: 2026 Social Security Reforms – What Employers Need to Know | iGlobal Law

France is introducing a set of social security reform measures from 2026 that will increase costs for employers and place new obligations on larger organisations, especially those with over 300 employees.

The reforms will also change rules on sick leave, speed up how work‑related illnesses are recognised, increase penalties for undeclared work, and create a new paid leave for parents. Most measures still require further government guidance, but employers should begin planning now.

Employer Contributions and Senior Employment Obligations

Higher Employer Costs on Terminations

The employer contribution applied to Mutually agreed terminations, and Employer‑initiated retirements will increase from 30% to 40%.

Senior Employment Planning Obligations

Companies with 300+ employees (or “community size” companies with 150+ employees in France) must negotiate or implement an annual plan on senior employment.

If a company does not negotiate or apply such a plan, it will face a penalty on its mandatory social contributions. The exact penalty will be set later.

Changes to Contribution Reductions

To encourage industries to increase their minimum pay rates, reductions to employer social contributions will be calculated using industry‑level minimum pay rates, rather than the national minimum pay level. This only applies when industry rates stay below the national minimum for the whole year. Further details will follow.

Overtime Relief Expanded

A flat deduction of €0.50 per overtime hour is now available to all employers, not just smaller companies. This applies from January 2026.

Regulation of Sick Leave and Indemnity Periods

New limits will apply to medical certificates for sickness absence:

Initial periods will be capped at one month.
Extensions will be capped at two months.

Doctors may go beyond these limits only if they provide justification.

For accidents at work and work‑related illnesses occurring from 1^st January 2027, daily payments will also be limited for the first time (the maximum duration will be confirmed).

Faster Occupational Disease Recognition Process

A faster process will be introduced where only the time‑limit condition is missing. In these cases, a small panel of medical experts will review the file, and their decision will be binding.

This is intended to shorten timelines but may increase the risk of employer liability where an employer is considered to have failed to take reasonable steps to protect workers. This change will apply no later than 1^st January 2027.

Tougher Sanctions for Undeclared Work

From 1^st June 2026:

Penalties for undeclared work will increase from 25% to 35% of the social contributions owed.
The same penalty will apply to businesses that use non‑compliant service providers and fail to carry out proper checks.

Introduction of an Additional Paid Birth Leave

A new paid leave for parents will apply from 1^st July 2026. It will:

last one or two months (can be split);
apply after other family‑related leave has been used;
be paid at 70% of net pay in month one and 60% in month two; and
require the employee to stop work fully during the leave.

It covers children born or adopted from 1^st January 2026, with transitional rights for children born earlier in 2026.

Practical Considerations for Employers

These reforms will increase labour costs and require updates to internal processes. Employers should begin to:

Review termination and retirement processes in light of higher charges.
Prepare senior‑employment plans where required.
Check compliance procedures to avoid increased penalties for undeclared work.
Update sickness‑absence management policies.
Assess potential liability exposure linked to faster recognition of work‑related illnesses.
Plan for the introduction of the new birth‑related leave.
Monitor further government guidance needed to finalise implementation.

This is a high-level general update only. Legal advice should be obtained on specific circumstances.