France Presents Measures to Boost Hiring at Small Companies

France’s Prime Minister Manuel Valls Tuesday presented a series of measures to facilitate hiring at small companies, saying that growth isn’t enough to reduce unemployment,

At a Paris press conference, Valls called the 18 measures a “Small Business Act à la Francaise,” in reference to the 60-year-old American program. Economy Minister Emmanuel Macron called the plan a French Jobs Acts, citing an Italian initiative earlier this year.

“We know that small business people, who are the heart of our economy, hesitate to hire because there are too many uncertainties,” Valls said. “The government must be on the side of those who strive for success, to make their country succeed.”

The measures include limiting severance pay for small companies, in most cases to a maximum of six months salary, and delaying for three years the extra payroll taxes due when companies expand to more than 50 employees.

The government will also offer a 4,000-euro bonus ($4,800) over two years to companies that hire their first employee. Labor Minister Francois Rebsamen said he expects about 60,000 of the 1.2 million French companies that have no salaried employees to take advantage of the measures.

Macron said the package of measures will cost the state budget about 200 million euros.

Valls also said companies will be allowed more rollovers of short-term work contracts, and that there will be greater controls on workers from other EU countries sent to France on short-term contracts.

“France is a nightmare for small companies, these measures are a move in the right direction,” Christian Person, head of Umalis, an employment agency, said in a statement. “These measures should help overcome the fear of hiring.”

Valls said he decided on a series of smaller measures rather than rewriting the main French labor contracts.

“We decided to concentrate on what would be most efficient, and not waste time,” Valls said.

France’s unemployment rate fell to 10.3 percent in the first quarter from 10.4 percent in the previous three months, the first decline in more than a year.

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