# Why France Has So Many 49-Employee Companies **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [May 10, 2012, 5:32pm UTC](https://boards.straightdope.com/t/why-france-has-so-many-49-employee-companies/621526 "2012-05-10T17:32:45Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [May 10, 2012, 5:32pm UTC](https://boards.straightdope.com/t/why-france-has-so-many-49-employee-companies/621526/1 "2012-05-10T17:32:45Z")
[http://www.businessweek.com/articles/2012-05-03/why-france-has-so-many-49-employee-companies](http://www.businessweek.com/articles/2012-05-03/why-france-has-so-many-49-employee-companies) Here’s a curious fact about the French economy: The country has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons. … “For the 100 employees we have in France, we have 10 employee representatives, for whom we have to organize weekly meetings even when there is nothing to discuss,” Haan says. “Every time a social security contribution changes, which is frequently, we have to update software and send our HR people for training. We can’t fire anyone without exorbitant costs.” … The code sets hurdles for any company that seeks to shed jobs when it’s turning a profit. It also grants judges the authority to reverse staff cuts years after they’re initiated if companies don’t follow the rules. The courts even deem some violations of the code a criminal offense that could send executives to jail. ======================================== Ahhh the wonderful socialist Europe. ---
**Author:** ![Agent\_Foxtrot](https://avatars.discourse-cdn.com/v4/letter/a/9fc29f/32.png) [@Agent\_Foxtrot](https://boards.straightdope.com/u/Agent_Foxtrot)\ **Post date:** [May 10, 2012, 6:14pm UTC](https://boards.straightdope.com/t/why-france-has-so-many-49-employee-companies/621526/2 "2012-05-10T18:14:03Z")
Thanks? ---
**Author:** ![Zebra](https://avatars.discourse-cdn.com/v4/letter/z/c0e974/32.png) [@Zebra](https://boards.straightdope.com/u/Zebra)\ **Post date:** [May 10, 2012, 6:21pm UTC](https://boards.straightdope.com/t/why-france-has-so-many-49-employee-companies/621526/3 "2012-05-10T18:21:22Z")
A government that actually puts business executives in jail when they break the law? I don’t believe it. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [May 10, 2012, 6:53pm UTC](https://boards.straightdope.com/t/why-france-has-so-many-49-employee-companies/621526/4 "2012-05-10T18:53:56Z")
You guys laugh. But just you wait. Another few centuries and Europe is going to collapse. And that’ll show you that they were wrong. ---
**Author:** ![CalMeacham](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/calmeacham/32/35_2.png) [@CalMeacham](https://boards.straightdope.com/u/CalMeacham)\ **Post date:** [May 10, 2012, 7:37pm UTC](https://boards.straightdope.com/t/why-france-has-so-many-49-employee-companies/621526/5 "2012-05-10T19:37:12Z")
The result of this restriction isn’t that companies don’t grow – it’s that employers simply create new companies, and employ more than 49 people under different company names: > [@](#): > > Creating Companies > > France has about 1,500 companies with 48 employees and about 1,600 companies with 49 employees, but only 660 with 50 and 500 with 51, according to a December 2011 report from state statistical unit Insee. > > French businesspeople often get around restraints by creating new companies, rather than expanding existing ones. > > “I can’t tell you how many times when I was minister I’d meet an entrepreneur who would tell me about his companies,” Thierry Breton, CEO of Atos Origin SA (ATO) and finance minister from 2005 to 2007, said at a Paris conference pm April 4. “I’d ask, ‘Why companies?’ He’d say, ‘Oh, I have several so that I can keep them under 50.’ We have to review our labor code.” [http://webfarm.bloomberg.com/news/2012-04-26/france-unemployment-near-10-fueled-by-laws-election-omits-jobs.html](http://webfarm.bloomberg.com/news/2012-04-26/france-unemployment-near-10-fueled-by-laws-election-omits-jobs.html)