NO PROTECTION

June 2016

No Protection (1987) is the second album by Starship, the band that came after Jefferson Starship and Jefferson Airplane, all three of which were led by the singer Grace Slick. Many of the issues I address this month deal with maintaining, providing or diminishing protection for people. One twist, especially in France, is that once the law favors one party, the other is exposed to greater risk. France has insisted for centuries that the law must be fair, which means providing for "unequal treatment". The logic here is that the underdog must be protected and helped. The recently proposed labor law (loi travail) submitted by Labor Minister Ms. Myriam El Khomri would take away a lot of what is seen as protection for employees; as a result, a lot of demonstrations and strikes have been happening all over France. Nearly everybody agrees that the old way of addressing the situations where there is built-in inequality must be changed, but there is a lot of disagreement as to how it should be changed..

Even French divorce law, which seemed to be widely accepted, is now being criticized in the media, mainly for reasons I will explain below. Interestingly, and in a purely French way, changes that occurred decades ago in other Western countries could now definitively take place in France. This is being done by a liberal government led by Mr. François Hollande, a member of the Socialist Party. If one can see past the current demonstrations, violence and name calling, this is a very interesting time for France.

By the way, the weeks of "Nuit Debout" sit-in demonstrations at the Place de la République also show a desire to change, but in quite the opposite way.

Whether to maintain protection or reduce it, as well as whom to protect, is a very hot topic right now.

BREAKTHROUGH REGARDING DIVORCE IN FRANCE
Divorce has been possible without proving fault since the passage on July 11th 1975 of a law mostly drafted by the legal scholar Jean Carbonnier, which made the judge the cornerstone of the proceedings so as to ensure the fairness of the divorce.

There are four types of divorce proceedings, whose interpretations have changed over the years but which have pretty much kept the same name and logic.

  • 1. Le consentement mutuel is a mutually agreed upon divorce, in which the couple is in agreement on all issues needed to divorce.
  • 2. La demande acceptée, now called le divorce pour acceptation du principe de la rupture du mariage, means the couple agrees on at least one thing, the fondamental decision to divorce.
  • 3. La rupture de la vie commune, now called le divorce pour altération définitive du lien conjugal,indicates that the couple no longer live together and have not for a number of years (formerly seven, now two years).
  • 4. Le divorce pour faute used to entail any breach of the legal obligations within a marriage but now the grounds are limited to violence and various forms of coercion resulting in one spouse being truly scared of the other.

In all of these proceedings, the judge is seen as the person making sure each spouse fairly shares both rights and responsibilities. In consentement mutuel (mutual agreement) proceedings, the judge's role is to make sure that the agreement is fair and that neither spouse has been threatened to obtain the desired result.

On May 4th, however, the Chambre des Députés, the French equivalent of the House of Representatives, approved a provision in a judicial reform bill that would give notaires the responsibility of reviewing and recording mutually agreed divorces, instead of having the judge hear and rule on the case. This means the deputies believe the chances of coercion of a spouse are no longer of much concern. On this topic, I could write a lot about recent immigrants to France who are not yet integrated into French culture, so I disagree with the assumption that the risk is negligible and believe it should still be taken into consideration.

From what I understand of the vote, notaires, acting as neutral professionals, will determine if the split of assets and debts is fair, as well as the sharing of responsibilities regarding alimony, child support, visitation rights and so on. If they see any discrepancies, however, they cannot rule, since their involvement is purely to register divorces. We will see how often such proceedings work with only a notaire, and how often a judge will have to get involved and rule on certain issues. Also, a minor child can ask to be heard by a judge in mutual-agreement proceedings.

The couple can always go to a judge if they realize they were not in as complete agreement as needed and they cannot reconcile their views.

The reasons given by the government for the change are to make divorce cheaper (50€ is the recommended cost of the registration) and to clear crowded family court dockets of this type of proceeding. In much of France, mutual-agreement divorces constitute a majority of divorce decisions; they account for over 60% of Parisian divorces, for example. Clearly it would benefit the court system to be able to restrict its business to family cases that really need a judge's attention.

The lower cost may be illusory, as notaire proceedings will require each spouse to have a lawyer; before, a couple who managed to agree on everything could get a divorce with just one lawyer.

One small detail that could complicate matters, even though it looks like the people will be saving a lot of money, is that notaires have their own jargon and way of thinking, which lawyers readily understand but which can be very puzzling for French laypeople, and even more so for foreigners. In family courts especially, the judges are often women. Generally the judge met with both spouses, together and then individually, making sure they agreed with the contents of the document drafted by the lawyer. These three meetings are mainly intended to make sure the wife is not being coerced into the divorce and is not renouncing her rights. Today it is possible that men could be coerced through blackmail into an unfair agreement. In most people's experience, judges use plain language and couples rarely complain of trouble understanding what the judge says. The way notaires work in France is evolving towards more client service, including being better understood. But it remains to be seen if they will do as well as judges with this task. It is far from certain, since thus far in the legislative process, the three meetings have not been mentioned.

I just hope the use of the new proceedings will be for the best and notaires will be strong enough to refuse to register an agreement where the wife or husband gives up their rights to everything and states that they are fully OK with it. I also hope they will be wise enough to understand that some people may need clarification concerning the process, the consequences and the implications for both parties.

http://abonnes.lemonde.fr/police-justice/article/2016/05/05/le-divorce-par-consentement-mutuel-sans-juge-vote-par-les-deputes-en-commission_4914097_1653578.html http://www.lefigaro.fr/actualite-france/2015/07/11/01016-20150711ARTFIG00128-en-quarante-ans-le-divorce-par-consentement-mutuel-n-a-pas-conquis-toute-la-france.php

MOST WIVES IN FRANCE NOW HAVE A HIGHER EDUCATION THAN THEIR SPOUSES
Until the 1960s, men in France tended to marry women of low education; it was assumed in those days that higher education and being a good wife at home were not compatible. This belief was common among men born before WWII.

France continues to be a patriarchal society, therefore it is still harder for women to get a job than men; in addition, they continue to be paid less, by 19% on average. Studying longer is seen as a way to offset these two obstacles, and consequently today in a majority of couples in France, the woman has a university diploma. Meanwhile, uneducated men have the hardest time getting married or finding a long-term partner.

As this trend of women having university degrees continues, it will be more and more common for the wife to make more money than the husband. It does not need to be prevalent to modify the balance in society. I find this evolution very interesting.

http://www.lemonde.fr/campus/article/2016/04/14/les-femmes-sont-desormais-plus-diplomees-que-leur-conjoint_4902195_4401467.html#8TDtr9d51J4ftSRj.99

THE PNR DATABASE AND POSSIBLE CONSEQUENCES FOR TRAVEL IN THE EU AND THE SCHENGEN AREA
For over a decade the USA has kept a database of everybody traveling into and out of the country, with particular attention to foreigners entering the country legally without a visa. The US police have the ability to learn right away if a foreigner has stayed in the USA more than the 90 days authorized by the visa waiver program.

In Europe, there is no such database, though many governments have asked for it. For several reasons, the European Parliament was slow in approving its creation. In addition, some governments did not feel comfortable sharing information between their intelligence services so that terrorists could be tracked down.

Therefore, the recent creation of the Passenger Name Record (PNR) was approved only by a very small margin, 32 to 27. Right now everybody says they want the data to track terrorists and people involved in other serious crimes, and I believe that is true. I do not see any hidden agenda here.

On the other hand, once the database is created, it can be used for many other things. One that would be easy to set up is identifying and fining people who overstay the 90 days allowed by the visa waiver program. Several countries in the Schengen area already severely fine foreigners identified as having overstayed. Today these people are only caught when they get to a border and their passports are checked. Once the PNR is fully functioning, if all European police forces have full access to it, each member country can add software that matches people overstaying their visas with people traveling. The police could know in advance who is traveling in this situation, and handle them right off the plane if need be.

I have no idea if the French police would ever be interested in apprehending North Americans who have overstayed their visas. Right now nothing indicates that they are. But it would not take much for other Schengen area police forces to catch people. The absence of border controls does not mean there are no controls; on the contrary, there are many. My experience is that until recently they were mostly done near the Spanish and Italian borders, where a lot of undocumented aliens enter France, and at the Belgian border where drug smugglers come from the Netherlands. It is perfectly legal for Germany, Switzerland, Spain and the Netherlands to fine people who overstay at the Schengen level; as long as it does not involve a border control, it would be in full compliance with the Schengen agreement— for example, picking up a person getting off a plane.

People who are in this situation should not panic. The PNR has just been voted in and for many reasons it will be a long time before it is fully operational. Still, we now know it will exist and it will be used. The rest is speculation. My personal opinion comes from what is going today and what could happen when countries have full access to the information. Now may be the time to reconsider this lifestyle.

UBER IN FRANCE AND URSSAF'S REQUALIFICATION ATTEMPT
The French administration has won in court regarding one aspect of Uber's activities. But now the administration has found a more definitive way to get rid of Uber in France.

The key to Uber's system is that its drivers are self-employed and run their business the way they want. In several US states, this arrangement is being challenged on the grounds that the drivers should be considered employees. Now URSSAF is doing the same thing in France. The key difference is that in France the financial consequences are much worse. Social charges are calculated differently between the self-employed status and the employee status.

Two things are happening and are independent one from the other. The first most important one is that the employer is said to owe the employee's and employer's social charges calculated on the money the driver has received. This means that the entire amount of the social charges is owed by the employer. The second consequence is that the drivers are reimbursed the amount of social charges they have paid as self-employed.

This amounts to a huge amount of money, to which URSSAF adds fines and penalties with interests for late payment going back as much as three years. If URSSAF wins its case, Uber might have to file for bankruptcy to handle such a debt. One nasty twist is that even if Uber takes the matter to court and obtains a favorable decision, it still owes the money the entire time. This means URSSAF can use all the collection methods at its disposal, including freezing bank accounts, blocking money that Uber's creditors owe, and so on, so it can dry up Uber's cash fast.

The legal ground for this action is that, under French law, if an individual is a subordinate of a company, he is an employee no matter what his legal status is. URSSAF is trying to prove that this lien de subordination exists between Uber and its drivers.

I do not wish to comment on the quality of the service Uber offers, or on the fact that many black and Arab drivers, those who have the hardest time getting decent jobs, have found working with Uber to be a good opportunity. As far as the big picture goes, whether this attack on Uber is a good or a bad thing for France is a very complex question. One thing I am sure is that there will be intense lobbying by employers to stop or reduce this attack, as it is clear that French business owners are part of the trend to make their workers self-employed as much as possible.

It has reached the point where people speak in French about the uberisation de la société, which describes the disappearance of social protection for French employees, as well as for tenants and so on. That gives an idea how important this action is for France, as it will set the trend for the rest of French society.

An article in Le Monde also illustrates very well the evolution towards less protection for the employees.

http://www.lemonde.fr/economie-francaise/article/2016/05/17/l-urssaf-poursuit-uber-pour-requalifier-ses-chauffeurs-en-salaries_4920825_1656968.html#Z8ThiT8Otb0xpmj4.99

INCREASE OF MY FEES ON OCTOBER 1st 2016
It has been about six years since my fees last increased. On October 1st, I will raise my initial retainer from 250€ to 270€ and the hourly rate from 100€ to 110€.

 

MY OFFICE WILL NOT CLOSE DURING THE SUMMER VACATION
Since my office situation has not been resolved and I do not anticipate being able to move before August or early September, I am not planning any vacation time and do not expect to go away for any length of time this summer. Depending on the outcome of my office search and how quickly it proceeds, this could change some € but not much, considering the fact that any changes would be last minute. By the way, I have formed a new corporation, called "A Survival Kit For Paris."


Best regards,
Jean Taquet

THE CONSEQUENCES OF AN UNWELCOME PROMOTION

QUESTION

After many years in France, I hold a carte de résident and I have been working for my employer for years. It is a job, and only a job … I do not want to say more. About two months ago I got a promotion and my new boss is plain awful. One could speak of harassment and degrading methods. I have worked on some projects with him and he is very abusive. Without waiting for me to sign the addendum to my contract, they gave me a new office, a new boss and more work to do with a meager increase in pay. I am reminded daily that if I do not sign the contract, I will not keep my raise. Considering the situation, I truly miss my former position; at least I could work in relative peace and get things done.

Do you think it is possible to get my job back? I never accepted the change and I have no intention of signing at this point. So what do I risk?


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ANSWER

I would like to analyze your situation in such a way that you can see the consequences of your actions even though you have your heart in the right place. First, I understand how you feel and I respect what you want to do. It is perfectly honorable and the fact that you feel so guilty shows that you want to change the situation as soon as possible. Ideally you would like your good faith and your desire to fix the situation to be known to the landlady so that she does not worry anymore and just gives you a little bit more time to start not only paying the rent again but also reimbursing the back rent. But no matter how well you communicate and how genuine your feelings are, your chances of success are about zero.

You are up against two very specific aspects of this situation that you desperately need to understand and make yours if you want to get out of the situation in good shape:
1 - French people tell lies more than Americans in such situations. In the eyes of French landlords, all tenants are potential liars and cheaters who can never be trusted and everything must be verified. Try to understand that nearly all French tenants who stop paying rent come up with excuses with as much credibility as yours, and express feelings that seem to be totally genuine. So no matter what you write, no matter what you say in a conversation, your landlady will see it as lies, lies, more lies and insults. You have absolutely zero chance of getting a fair hearing if you say what you want to say. So do not do it.

2 - The other side of the coin is that French people often credit Americans with being professional and square in their business dealings. This is your best asset, the reputation of Americans for getting the job done and having a professional approach to things. Therefore what you should do is wait to contact with her until you have something "American" and "professional" to say, such as:

  • I owe you X amount.
  • I earn X amount.
  • I start working on X date.
  • Therefore I propose to resume full rent payments on X date.
  • I propose adding X amount toward paying what I owe you.
  • I expect to be paid up by X date.
  • At the end ask the landlady if she approves of your plan.

Such a letter from a French person would be received quite suspiciously, as the Civil Code pretty much states that a debtor, especially a tenant, who proposes a schedule of payment cannot be considered as totally defaulting. Thus an unscrupulous tenant might propose a schedule of payment, without intending to honor it, simply to extend the procedure, which can last several months.

However, if you send two checks with the letter – one toward the rent owed and one for the resumption of regular rent payment –you are more likely to be believed until the next payment is expected, and so on. This is, I admit, an ideal scenario. You really need to be very cold-blooded about matters; stay in control and do not let your American reflexes take over.

It is possible that she will start proceedings to evict you. If you follow the advice of a professional and fight this, it will take about three years to expel you for being a bad, non-paying tenant. In other words, time is on your side, but I strongly advise you to settle matters before you find your belongings on the sidewalk!

If you receive a summons to pay (commandement de payer) from a bailiff, that means the legal proceedings have begun and your landlady will take the matter to court. At that point, you need to find a job and earn money as fast as you can, and you should leave the proceedings to a lawyer. You do not qualify for legal aid as you are an undocumented resident of France.

Looking at the bigger picture, you have lost your immigration status and you are behind paying rent. Objectively I do not see how you will be capable of finding a job that allows you to pay your rent and the debt of past rent when you do not have the right to be in France anymore. Maybe cutting your losses and moving back to the USA for a while could be the best solution.

WHAT IS TAXABLE INCOME IN FRANCE?

QUESTION

Having lived here for many years, I have to fill out US tax forms as well as French. One thing about the French system I've never really understood is their "logic" about income: Brut, Net, Abbatu [sic], Imposable € each one is different. But why not just say you made this much and this is what you owe in taxes?


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ANSWER

Your question is very interesting, as it shows how different the two fiscal systems are. The French system involves different ways of defining income depending on its nature. This is what makes the French logic appear complicated, and you have described only the tip of the iceberg. How to know what is called the revenue fiscal de référence is complicated  on that I agree with you.

I would like to illustrate this first with the French salaried income, which the simplest:

  • 1 - The employee signs a labor contract that states a gross income. It is also mentioned at the beginning of the pay slip, though it is often hard to find.
  • 2 - The pay slip lists the social charges that are taken out, as well as the CSG and CRDS, and other costs related to the employee's position, such as transport pass, mutuelle and restaurant tickets, to mention only the most common. A portion of the CSG tax is put back in the taxable income as non-deductible.
  • 3- The December pay slip usually mentions the amount of aggregated taxable income that needs to be declared. This amount should be checked against the one mentioned on the standard blue form called #2042. It is very rare for a mistake to be made but it is important to check this and amend the form if needed.
  • 4 - This amount, representing all the salary you have received, is subject to the abattement forfaitaire, the standard 10% deduction that everybody takes, with very few exceptions. The logic is that it is difficult for employees to itemize their professional expenses.
  • 5 - The end result is the net imposable, i.e. the taxable portion of the total salary.

Do not forget that the long list of deductions finances all the benefits France offers, such as global health coverage where nobody is left out and there is no maximum limit on the amount of coverage, plus retirement and unemployment benefits, continuing education and so on.

A more or less similar calculation is done for these other forms of income:

  • Profit on income made as a self-employed person.
  • Profit on rental income
  • Financial portfolio income.

All this combined is the revenu fiscal de référence.

In conclusion, the so-called taxable income is calculated using either standard deductions, which are for the most part a ratio, or itemized professional deductions.

The fact that the American system has set amounts for standard deductions does not seem as fair to me, since it has less impact on higher incomes than on lower ones.

To recap, let's define the words you mentioned:
Brut is the gross income, which is also the legal one.
Net is the net income, the amount you receive in your bank account.
Net imposable is the portion of the net income subject to income tax.
Abattement (not Abbatu) is a deduction.

What seems to confuse foreigners regarding French income tax is that unless the person is single with no family obligations, the tax rate applied is difficult to define. The French system taxes a household, from a single person to a couple with several children. The basic rule of thumb is that the more people in the household, the lower your taxes are.

I hope that I have made all this clearer for you.

 

DISCLAIMER
Please forward this message to all those who would be interested in its contents. The information contained in this newsletter is intended only as general information. I strongly urge readers to seek professional guidance concerning the legal and tax matters mentioned. This newsletter is intended as a general guide and is not to be taken as professional advice.


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