There is a war

Febuary 2020

New Skin for the Old Ceremony (1974) is the fourth studio album by Leonard Cohen. “There Is a War” is the first song on side two.

There is a war between the rich and poor,
A war between the man and the woman.
There is a war between the ones who say there is a war
And the ones who say that there isn't.
Why don't you come on back to the war, that's right, get in it.
Why don't you come on back to the war, it's just beginning.
Well I live here with a woman and a child,
The situation makes me kind of nervous.
Yes, I rise up from her arms, she says, “I guess you call this love.”
I call it service.
Why don't you come on back to the war, don’t be a tourist,
Why don't you come on back to the war, before it hurts us.
Why don't you come on back to the war, let's all get nervous.
You cannot stand what I've become,
You much prefer the gentleman I was before.
I was so easy to defeat, I was so easy to control,
I didn't even know there was a war.
Why don't you come on back to the war, don't be embarrassed.
Why don't you come on back to the war, you can still get married.
There is a war between the rich and poor,
A war between the man and the woman.
There is a war between the left and right,
A war between the black and white,
A war between the odd and the even.
Why don't you come on back to the war, pick up your tiny burden.
Why don't you come on back to the war, let's all get even.
Why don't you come on back to the war, can't you hear me speaking?

First of all, I would like to wish all of you a very happy and prosperous 2020!
French custom dictates that New Year’s wishes can be expressed until the end of January,
so I have managed it a few hours before the deadline.

WHICH WAR, AGAINST WHOM?
From Wikipedia
The word “war” is now so misused that it rarely describes a military conflict between two or more countries. Today, in all the countries I am familiar with, almost all cases of opposing interests expressed forcefully are called wars. The fact that disagreements within the population of a country are described as a desire to annihilate the other side illustrates the extreme polarization of society. Yet several countries, including the USA and France, have actual military personnel deployed in places where they have to fight enemy forces.

I find it striking that, 46 years ago, Leonard Cohen was able to describe so vividly and accurately the situation many countries now face. Extremely violent demonstrations occurred in many countries in 2019 and some are continuing in 2020. France is one of the countries affected. Even as I write this, a massive strike is under way, involving multiple demonstrations.

Each side is expressing sadness about the situation and asking for changes, which are not coming. The division seems to grow ever wider.

People can isolate one topic, one procedure, one reform and decide who is right and who is wrong. I chose this title when it appeared there could be a military conflict between the USA and Iran. The risk then was a real war.

Many of us have New Year’s resolutions; the vast majority of people long for a more peaceful life, some security, a stable job, a secure home. At the same, many are calling the population to get involved, to become militant because what is at stake is too important to stand by and do nothing. In short this means taking a stand and fight for it.

Leonard Cohen’s song states “I was so easy to defeat, I was so easy to control,” and concludes, “Can't you hear me speaking?” Sad ending, given the current lack of dialogue.

THE STRIKES AND PENSION REFORM
The strikes over pension reform that until recently crippled French public transport started on December 5. The world got wind of the situation and followed the events closely. There are many reasons international journalists covered the story. Tourists were stranded at airports and could not get into their destination cities. The traffic jams in Paris were spectacular, lasting pretty much the entire day. Flocks of people walked for hours, traveling to their offices and meetings. Increased numbers of bicycles and scooter riders, coming out of nowhere, invaded the streets and sidewalks as their dedicated lanes became too small for the unforeseen level of traffic.

That was what could be witnessed daily and was easy to show on TV. It made for striking broadcasts and good ratings. But such obvious effects of the strike say nothing about why it happened.

As in many countries, the media in France is politically biased. Conservative news sources describe the country’s retirement system as favoring some professions so much that it is unfair to the rest of the population. Liberal sources describe the proposed reform as causing a significant loss of income for everyone and thus see the strikes as protecting the interests of the entire populace, not just certain people fighting for their own interest.

Without boring you with technical details or taking sides, explaining a few points should make it easy for you to understand the real reasons for the strikes.

Because the French administrative system tried to tailor services to the needs of the public, France ended up with 42 retirement plans. All the special ones predate WWII; the first ones were created in late 19th century. One was that of the cheminots or railway workers. This is the main one being fought so hard right now. It would be easy to narrow down this debate to the confrontation between employees of the public transport system (SNCF and RATP) and the government. But the police, lawyers, French opera companies and firefighters are also unhappy about the reform. When they expressed their opposition very strongly, the government soon backtracked.

Working at the SNCF, the national rail company, used to be very hard, and the cheminots managed to get benefits to match. Today everything is electric; the former kind of hard work, such as operating coal engines, does not exist anymore. Does that mean they have an easier job than the rest of the population? Many jobs in France are just as hard and some even worse: would it be fair to recognize that? This is where the dialogue is going nowhere. Over the years there have been several attempts to look at the physical toll jobs take on the employees so as to find a way to compensate this, especially at retirement age. Such efforts never go anywhere. The end result would be to give more to worn-out employees when they retire, without increasing the payments into their pension plan.

What is happening now is a fight between what I would call an American viewpoint and the French traditional viewpoint. The former envisions the same social security system for everybody, with employers addressing factors specific to certain jobs. The latter holds that the public system must be fair, that this means it is not equal, and that French employers cannot be trusted to protect their employees’ rights.

What I fear is that, as happened in 1995, when similar strikes were held over the very same issue, this needed reform will be abandoned altogether and buried for another decade or more. But I am just as afraid that the reform will go through the legislative process with no transparency about the issues the strikers rightfully raised. Clearly there is a need to streamline the pension system, but it is just as clear that there should be ways to address the hardship of some jobs.

To sum up: If you take away benefits without compensation, offering nothing in exchange, and the government treats people with contempt, they have every reason to be angry and chances are they will express their anger forcefully and loudly. Since December 5 this is what has been happening, and French residents, especially those in Paris, have had to deal with the consequences.

www.lemonde.fr/societe/video/2019/12/29/regimes-speciaux-pourquoi-le-systeme-de-retraite-francais-est-si-complexe_6024332_3224.html

www.nytimes.com/2019/12/17/world/europe/france-pension-protests.html

THE MACRON REFORM IS BROADER THAN PEOPLE THINK
The section above addresses the origins of the strikes that have crippled France, and especially the Paris region, since early December. This section is about the other side of the streamlining of the French administration reform, which is health coverage reform.

Because of the way labor has been organized since the early 17th century under Louis XIV, the administration has created specific systems for each type of work when it comes to health coverage and retirement funds. Over the years, since long before Emmanuel Macron was elected, the health coverage and retirement systems have slowly been merged, but they always follow the division of labor between the merchants (commerçants), craftspeople (artisans) and professionals (professions libérales).

Since his election, President Macron has pushed forcefully on both the health coverage and retirement sides. The steps taken regarding health coverage had be completed by January 20, 2020, when the merger of the Sécurité Sociale des Travailleurs Indépendants (ex-RSI) with the Caisse Primaire d'Assurance Maladie (CPAM). So now there is one organization left covering the entire French population.

I could expand a great deal about this, but I would like to focus on just a couple of issues that I believe may shed light on the bigger picture.

CPAM has always been the best in terms of coverage and efficiency. No one has complained about the merger upgrading the overall level of service, so this reform has been out of the spotlight, including in the French media. By contrast, in the pension reform, the proposed consolidated system offers lower benefits than either the special regimes or the existing generic one.

Even though the pension reform is needed and will secure the system for the generations to come, it is clear that lowering the service level for everybody, without offering compensation of any kind, can only anger the people affected. There probably would have been little if any opposition to the retirement reform if it had been done the same way as the health coverage one.

In the health reform, people formerly covered by RSI as independents need to update the data on their Carte Vitale as soon as possible so it can be used by the medical profession and ensure continued coverage by the system.

Pharmacies and CPAM branches have the machines that can update the Carte Vitale. This will not change the link with your mutuelle.

RECRUITING FOR THE WEDNESDAY SESSION AT ACP
Since 2003, I have run what is now called the Immigration Clinic (IC, formerly the refugee ministry). It is under the Mission Outreach Committee, the social service arm of the American Church in Paris. The sessions are held at the church every other Wednesday from 5:30PM to 7:30PM except in July and August.

In 2019, our team lost three members, so we need a few new volunteers. There are two teams, one led by a lawyer, Daniel, and the other by myself, with at least one assistant for each of us. The assistant does not need legal background or expertise in French immigration procedures.

But since we often deal with people in difficult situations who may be emotional and scared, the members of our team do need solid experience working with the homeless, refugees, domestic violence victims, drug abuse victims and the like, in order to be able to handle moments of crisis. Please contact me directly if you are interested.

www.acparis.org/worship-mission-63276/mission-outreach/missions-in-our-community

THE DEFINITIVE CLOSING OF THE GAITE (C.R.E.) THE CENTRE DE RÉCEPTION DES ÉTRANGERS
The C.R.E., the centre de réception des étrangers is a branch of the central office of the prefecture de police de Paris. There are two in Paris and exist to provide immigration services. The office located on the south side of Paris was hosted by the general police station (Commissariat Central) of the 14th arrondissement. It was the last one in need of a complete makeover. On January 21st, I learned the hard way that it had moved to a different location. I showed up with a client on that very day at 2PM and discovered that it had been moved to 42 Rue Charcot, 75013 Paris. There it is hosted by the French equivalent of the Department of Motor Vehicles (DMV), where the titles of cars are issued. Practical information - RER / Métro : Bibliothèque François Mitterrand (RER C, ligne 14) or Chevaleret (ligne 6). The opening hours are 8:35 – 4:30 pm Monday through Thursday and 8:35 – 4:00 pm on Friday.

For the vast majority of those in need of immigration services, this is the place to go to obtain a récépissé, which is necessary in order to maintain legal residency while waiting for the appointment to renew the immigration status, whether that involves keeping the current status or changing to another one. It is also where undocumented aliens (les sans-papiers) first go to submit their initial request in the hope of getting an appointment at the central office in the Cité headquarters and submit once and for all the request to obtain a legal immigration status. As a result, early risers can see a lengthy line of applicants at the entrance quite early in the morning, long before opening hours.

Best regards,

IS PRORATING A BONUS BECAUSE OF AN ABSENCE IS FAIR?

QUESTION

I work with a client and I wanted to know how to calculate my day rate. My rate with this customer is 2750€ per month so my daily rate is 126.90€ (dividing by 21.67 days). When I make the goal I receive 250€ more.

One month, I was absent one day. I calculated 3000€ (counting the premium) divided by 21.67 days. I find it weird that my day of absence changed my bonus even though I achieved the goal.

Here is the answer of the accountant: “In fact, the premium is prorated as well. Because the premium amount of 250€ is the amount for a full month. Someone, for example, who works 4 days a week has only 4/5ths of the bonus of someone who works full time.”

This is wrong! Don’t you agree?

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ANSWER

Although many would think it obvious that this is wrong, I would like to put it in a French context. I have no intention of absolving this client, but I believe you need to understand what is why it happened and how to protect yourself from it happening again.

The error is obvious: the accountant is treating you as an employee and not as a contractor, i.e., an independent person who runs their own business.

Especially since WWII, French labor law has been changed repeatedly to ensure that employees are paid at the end of the month for the time spent at work. Being paid by performance alone is not legal. Everybody is paid at least minimum wage, after which an employee can earn commissions, profit-sharing, bonuses and so on. The logic is clear: the salary is first and foremost linked to time spent working. Therefore everything related to the salary is prorated according to time spent, and by the same reasoning, bonuses, commissions, profit-sharing and the like are calculated the same way.

On the other hand, independents are paid for work done. It is obvious when you think of a mechanic, a plumber or a baker. There might be issues regarding how long it takes and one could charge penalties if the work is not done according to the terms of the contract, as is often the case with contractors. But you are paying for a service. You want to get what you are owed, which is linked to work performed.

You are charging a daily rate. It is pretty obvious that if you work one day less in a given month, that part of the compensation needs to be adjusted according to your fee policy. As an independent contractor with compensation linked to achieving a goal, however, you are entitled to the full bonus because it is linked to successful performance.

While it is possible that the client acted in bad faith, there is another aspect of the situation to consider. There used to be a huge dichotomy between salaried employees, who were thought of as good people, and independents, who were considered bad: it was assumed that they cheated their clients and the tax collector.

In 2009, President Nicolas Sarkozy fulfilled a campaign promise by creating the auto-entrepreneur status. It enabled employees to run their own business on the side so as to earn more money and work more hours than the 35 hours a week that employees were allowed. Thus, for the last ten years, the wall dividing good employees from bad independents slowly but surely crumbled. Today it feels like almost everyone has a job on the side, when they have not chosen to be independent altogether.

Another factor is that French employers have laid off huge numbers of employees and replaced them with independents registered as auto-entrepreneurs, to the point that French HR offices tend to treat new independents as what they really are – “employees,” according to French law, which defines employment in accordance with le lien de subordination. (Check the February 2018 issue for further details.)
https://www.jeantaquet.com/out-with-the-old-in-with-the-new/

I am just trying to illustrate this evolution, which could explain why you got cheated. The solution could be to have a template contract that strongly underlines the independent nature of the contract and distinguishes between performance compensation and everything else. It would make clear that if you meet the objective, the money is owed.

You should reread your contract with this explanation in mind, and avoid language that even vaguely refers to anything resembling employee status.

 

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WHERE TO BUY REAL ESTATE IN PARIS

QUESTION

I’m wondering if there are certain arrondissements I should stay away from because you feel them to be unsafe? I know this may be a very broad generalization because there may be large sections that are dangerous in each. The maps on the websites for apartment location are so broad it is impossible to pinpoint where they are. I got lucky on the one I had the address for. I was told to stay away from the Barbès area in the 18th!

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ANSWER

The answer to this common question depends on who is answering and who is asking. Many foreigners, especially North Americans, have a hard time realizing that Paris and many other major cities in France were initially built by the Romans and have over 2,000 years of history, so there are almost no square blocks and none are the same size.

I believe that in order to properly buy real estate in Paris, one should study the history, starting with the French Revolution (1789), to evaluate the atmosphere the location had then and how it has evolved up to today. You might think that is excessive and knowing what are currently the so-called right locations is enough. But my point is, how does one define “right location” in Paris?

Let’s start with two different statements that are both true. It all depends on what these statements mean to you.

1 – All 20 arrondissements have residential neighborhoods and you should not rule out any of them.
2 – All 20 districts have bad/unfriendly neighborhoods that you must stay away from, depending on what you are looking for.

One thing to bear in mind is that the arrondissements are numbered in a snail pattern starting with the first in the center of Paris. So the number does not indicate any kind of hierarchy.

Next, what do you define “unsafe”? In other words, what is your basis of comparison? Just considering crime statistics, the New-York city is about as dangerous as Paris. What am I supposed to evaluate here?

Bearing that in mind, and understanding that this is a very imprecise description, here is the list of locations I would not want to live in, from outer to inner arrondissements.

17th – the northeastern part of Paris, north of Batignolles
18th – everything except Montmartre, including the southern part, which is a red-light district with the Moulin Rouge
19th - everything except the area around the Buttes-Chaumont park and the Mouzaïa quarter with its individual houses
20th - most of it except along the border with 11th around Pere Lachaise cemetery; the southern part is better than the northern side
12th - along the périphérique
13th – all of Chinatown, south of Place d’Italie
14th – along the périphérique
10th – the eastern side of Gare de l’Est and the western side of Gare du Nord all the way to the Barbès district, as well as around the Chateau d’Eau metro near the mairie
9th – the northern edge with the Pigalle red-light district
1st & 4th – the Les Halles and Beaubourg areas
2nd - around rue St Denis, some of which is still a red-light district.

This is still very vague; a better analysis would be refined even more depending on your personal tastes, as well as whether the property will be for your use as a primary residence or short-stay pied-à-terre and whether you intend to rent it out or keep it for yourself.

Many websites just use the postal code, which is little help unless you want to buy only to serve tourists who would be renting your place on Airbnb.

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THE BEST IMMIGRATION STATUS FOR RUNNING A BUSINESS IN TWO COUNTRIES

QUESTION

I am currently in Paris for work but on a tourist 90/180 visa from the USA. I have my own business in the USA, but my press office and sales team are based in Paris. I know I will need to return to the States before the end of 90 days but return before the next 90 day period of the 180 is completed (I have to be back in Paris very soon). I have been working between Paris and NYC for the past year and a half with Schengen visas but at this point it is obviously in my best interest to procure either a talent visa or another type of long-stay visa.

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ANSWER

More and more people, for a variety of reasons, are feeling pressured by enforcement of the Schengen regulation by more and more EU member countries. The French police at airports are increasingly either frowning at foreigners overstaying Schengen visas or, on rare occasions, imposing a small fine. Some people lose interest in coming because of that. Others, like you, decide to obtain French immigration status that allows them to stay in France at their convenience. This relieves them from the strict regulation of having the right to stay 90 days within a given 180 days in the Schengen zone. By the way, this is called the Schengen visa waiver program and it is not a visa but rather an absence of visa. There is no such a thing as a “tourist visa” for Americans. One either has a long stay visa or the absence of one.

You and your business are legal and fiscal residents of the USA but you have strong business ties in France, which is currently an unsustainable situation if you are making longer and longer stays in France. Thus you need to decide which immigration status would best suit your situation. With visiteur status you would maintain everything in the USA and come to France to supervise your representation and production here. Or there are several subcategories of the passeport talent linked to creating a business in France.

You clearly need the right to stay in France as long as required, and this means asking for a visa. Your description would initially seem to fit the passeport talent, but I have significant reservations about it, as I will explain later.

I would like to review your situation to see what would be the best solution for you.

I – A long stay visa
You could ask for a non-renewable long stay visa for up to one year. If you stay in France one or two solid blocks of time, you might consider asking for a visa once a year. The file resembles that for the immigration visa and renewal of status at the prefecture. As time goes by, renewal in France gets easier and more user friendly. So I advise you against this non-renewable visa solution.

 

Therefore the solutions I can think fall into two categories:
• You stay an American fiscal resident
• You move your fiscal and legal residence to France

 

A – Staying an American fiscal resident
1 – With the long stay visiteur visa, you can choose to remain an American fiscal resident while becoming a French legal resident. It is by far the easiest and fastest to obtain. Its renewal at the prefecture is easy and it requires little to maintain this status. It is also the one that will cause the least upheaval in your life. The only potential drawback is that you cannot work under a French contract. But this does not affect you since you run an American corporation and are paid entirely in the USA.

 

2 – With the passeport talent expat status, you again are still an American fiscal resident and become a French legal resident. The uncertainty lies in the setup you have with your sales team, as you need a corporate presence in France. Obtaining this status requires several corporate documents as well as supporting documents defining your mission in France. But once you have the visa, it requires very little to maintain the status with the prefecture; if the project is well described, the carte de séjour is valid for four years. This status also involves relatively little upheaval in your life.

 

 

B – Becoming a French fiscal and legal resident
This means moving most of your life to France. You would have two businesses, one in the USA and one in France.

Let us review the statuses this carte de séjour offers so you can see the benefits of each.
1 – Passeport talent - business owner (créateur d’entreprise)
The first requirement is to either have a master’s degree or prove you have had at least five years of experience in your field. You then need to assemble a big file, including a complete business plan proving that you will invest over 30,000€ the first year. Since your press office and sales team are already in France, I am sure you can meet this requirement. You must register your French business by becoming a profession libérale with URSSAF or registering with the court (tribunal de commerce), either as a commerçant by yourself or by creating a corporate presence in France. But if you think the latter looks more appropriate, you might prefer one of the next alternatives instead.

 

2 - Passeport talent - creating a French corporation (mandataire social)
Being a mandataire social means you are the managing director of a French corporation. You must create this corporation before you can put together the file for the visa. This is a huge endeavor and might not be worth it.

 

3 - Passeport talent - internationally famous (notoriété internationale)
I am not sure if your activity fits this requirement, but if it does it will lighten the amount of paperwork considerably, as the main goal of the file is to prove you have a business in both countries that enhances culture or education. That is the big unknown, which is why I mention it as a third option.

 

4 - Self-employed - profession libérale
This is not a passeport talent status and does not come with as many goodies, such as a card valid four years, the spouse getting a private life immigration status that grants all rights to work and VIP treatment at the prefecture. But I believe it could be a good deal for you provided that you scrupulously follow some very strict guidelines.

The file just needs a good business plan in terms of projected sales evolution over three years and expenses, both personal and professional. The good news is that it requires no investment or other requirements. The review of the request for the visa is quite short: two to four weeks. It is issued easily. In that sense it is closer to visiteur status with the business plan and supporting documents.

The first year in France is documented with confirmation from the Office Français de l'Immigration et de l'Intégration, which issues the foreign ID number you would keep as long as you live in France. Renewal is done at the prefecture and if the annual profit is at least the amount of the annual minimum wage, you get a four-year card. And the spouse gets visiteur status.

The drawback is that this technically is the creation of a consulting activity, which means leaving untouched what exists today: an American business and the press office and sales team paid by it. Being in France most of the time, you would work alongside the sales force and help with public relations efforts, invoicing your American corporation as your client. This is risky because you are supposed to have more than one client, but it would be unwise to disperse your energy. On the other hand, if your efforts are successful, in a couple of years the business should have grown enough to create a subsidiary or branch of your American corporation. Creating this while in France holding a four-year card becomes a much simpler endeavor. If it does not work, very little has been spent creating a business presence in France for your American corporation.

As you see, there is no single ideal solution, as is often the case in France. Still, depending on your priorities and how large your American business is, you do have several solutions to choose from. You need to decide which is best for you.

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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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