WHO IS THE FOOL?

March 2016

Who the fool is depends on which side of the issue one is standing. It happens that in France and in the USA in very different ways, there is an ever-growing portion of the population that is looking for new ideas, new solutions, and aspires to radically change the society. At the same time, there is probably about the same number of people who fear those changes and express the desire to at least keep things the way they are and even to go back to some better situations that existed in the past. In the USA, this is illustrated in the presidential race by Bernie Sanders for the first group and Donald Trump for the second. Interestingly enough, in France the first group could be represented by Emmanuel Macron, the finance minister, and the second group, by those in professions who have been violently demonstrating these last months. It is interesting to see that Bernie Sanders and Emmanuel Macron have opposing views on many topics, to start with, their opinions concerning whether big business should be favored or opposed. One evolution everybody agrees on is the fact that the Internet delivers a gargantuan amount of information to absolutely everybody and for the most part absolutely free of charge. I see the consequences in France of this worldwide evolution linked to the Internet. Not all segments of society have yet been able to use it to their advantage. This said, the traditional French society was not equipped to deal with modern-day expections of customer satisfaction. France has considerably improved the quality of its service and this started even before the Internet was created. Today the French population accepts a much wider range of culture and tradition, and pays more and more attention to what people want. Most of the issues I address this month show how a profession, an administration and some people are disconnected from today’s reality in France. More and more often the individual is informed and therefore makes an educated choice, and the professional discovers too late that the client was not captive, and that he has lost his client. Old-fashioned restaurants, cafés, taxis and landlords are feeling the pressure. One illustration of this trend is shown by a recent study – regarding the decline of the traditional cafés in France. The main two reasons were the poor service and the unwillingness to offer soft drinks people wanted, especially the so-called diet ones. It is also interesting to see that even the French administration is being forced to adapt to people’s expectations – very slowly, as expected, but still moving in the right direction.

So who is the fool, the French taxi driver hoping he can keep his job and sell his license for a reasonable price when he retires, or the Uber driver who thinks he has a promising future in France? Rather than answer this question as well as the one of this month’s title, I will let readers decide for themselves.

CHANGE IN MY BUSINESS
I have carried out my work as an employee of the company Alliage for more than fifteen years. I had many reasons to choose this set-up, the most obvious being that employee status, even though quite expensive in terms of taxes, offers substantial peace of mind since France favors the employee status. Now, after significant improvements in the self-employed status in France, I am envisioning doing business through my own set-up. At the same time, Isabelle Russo, Alliage senior manager, has decided to dedicate most of her time to her career in the entertainment industry. A few years ago, she qualified as a show producer and has since built a business.

As the situation evolves I will keep my readers and clients informed.

MORE READER TESTIMONY ON PROBLEMS WITH AMERICAN AIRLINES
I wrote an article in the AAWE news publication on my daughter’s and my experiences with the Open Skies program of AA, British Airways, Iberia, Qatar Airways, etc., in Newark last July. Several other AAWE members had similar experience with this program at that time and I would bet it was the same situation that your reader described. I do believe that attention should be directed to abuses by this consortium, often chosen because of price. Having worked for Pan Am in Africa, I was appalled by their inconsideration for their passengers’ welfare. I would like to describe what happened to us this past summer, which is now common American airline behavior, leaving passengers stranded.

“In July, our travel agent here arranged a three-week trip from France to the U.S. for us. All went well until we checked in at 3:30 p.m. to board our return flight for Paris, scheduled to leave at 6:45 p.m., a flight confirmed by American Airlines four months previously. The British Airways service manager informed us that our flight had been canceled but that he had chartered a plane from another company and that we would be boarding about 8 p.m. The plane and an Iberian crew arrived and we boarded. There was a long wait before we taxied to the take-off runway. Once there, there was another long wait before one of the crew announced that they had “heard” something and that we needed to return to the terminal. At the terminal, the captain announced a fifteen minute wait for a mechanic and, after another wait, we were told to disembark. The British Airways staff avoided our questions about a future departure, instructed us to pick up our luggage and, if necessary, line up for hotel vouchers or for taxis to return home, for those living in the area. For the large number of us returning home to France, they offered the phone number of British Airways and told us to call for onward reservations. Faced with protests, the station manager commented that he had no facilities for making reservations and a staff member added that, if the staff were to do this, they would be at the airport all night! It was up to each passenger to make his own onward reservations.”

FOOD WASTE RECYCLING IS NOW MANDATORY IN FRANCE FOR SOME RESTAURANTS – DOGGY BAGS ARE BECOMING COMMON IN FRANCE
Bringing doggy bags home could be seen as a non-issue but since it happened in France, it indicates a significant change in French culture. For a long time, the main reason French restaurants would not agree to prepare doggy bags for their customers was that leftovers would not taste as good as freshly prepared food so there was a risk of damage to their reputation.

The truth is that the vast majority of French restaurants are not so exquisite that eating their leftovers would be an insult to their cooking.

Another reason brought forward was that in modern cuisine the portions are so small that there is nothing left over, since servings are supposedly just the right quantity to allow one to fully appreciate the meal. It is true that modern cuisine in France is often characterized by a very large plate with a small quantity on it. But it is always possible to make a mistake and order too much. So this is not sufficient to refuse to pack leftovers in a doggy bag.

What I truly find interesting with this issue is that a law had to be passed before restaurants would agree to box up leftovers: the clients did not have enough power to change the professionals’ attitude about this. This says a lot about how professionals resist change and customers are left with hardly any power to bring about change themselves.

Even more interesting is the motivation for this law. It has nothing to do with customers’ rights. The French parliament is determined to reduce waste, especially food waste, for environmental and fairness reasons. The new legislation approaches the issue by obliging businesses to decrease the amount of waste they generate, ideally to zero. An initial law in 2012 has forced businesses producing more than ten metric tons of waste per year to diminish this volume.

On January 1st 2016, another step in this effort went into effect, requiring restaurants with capacities of around 150 to 200 people to find ways to diminish their waste. As one aspect of this campaign, it is suggested (although not obligatory) that large restaurants give out doggy bags (or, as the government has suggested calling them, “gourmet bags”). On the other hand, the reduction of waste is mandatory, and the doggy bag is the simplest way to do so.

During the COP21 climate conference held in Paris in December, the city of Paris launched its own campaign by making free deliveries of special boxes, meant to keep leftovers safely, to 100 Parisian restaurants. This and other incentives could bring about the charge faster.

Culturally speaking this is a revolution in France and it will be interesting to see how fast French society can change on this issue. Perhaps one day all French restaurants will offer doggy bags, not because of waste reduction laws but because French people expect it. We shall see, but it is worth paying attention to this development.

UPDATE REGARDING NOVEMBER 2015 Q/A: FRENCH LAW DOES NOT EASILY ACCEPT NAME CHANGES
The November issue presented the situation of an American woman whose first name on her passport did not match that on her birth certificate so the city hall in her French town refused to marry her using her passport name and would only issue a marriage license under her birth name.

Now we have some good news: when the prefecture got the French marriage license, which had a different name from the passport and the woman’s oldcarte de séjour, it chose to ignore the discrepancy and issued her a newcarte de séjour, based on her marriage to a Frenchman, using the name on her passport and previouscarte de séjour.

One might have worried that the discrepancy would create some problems. The French administration is very picky regarding this matter. French law pretty much forbids use of a name, whether first or last name, that differs from the birth certificate or marriage license name, unless it has been approved.

The prefecture’s decision illustrates quite well what I called “French law and its blind eye” in the July-August 2009 issue, trying to explain the French understanding of what is legal, illegal, and “tolerated.” 
A reader asked a question to which the answer was much more complicated than it might have seemed. The usual understanding in many countries is that what is not clearly defined as illegal is considered to be legal. This is as black and white as it gets, but it does not apply in France.

Here the prefecture chooses to ignore the law in favor of the individual, preferring common sense and avoiding making waves over the normal application of the law. This type of bending is critical for France, which has way too many laws and would be even more crippled by them if what I have called this “grey” system did not exist. Sometimes there are provisions that institutionalize personal evaluation of a situation, such as theopportunité des poursuites and therequalification des faits. The first, in criminal law, allows the state not to prosecute a proven criminal deed. The other is an attempt to fight a loophole in the law.

STATISTICS ON THE NUMBER OF FOREIGNERS LIVING IN FRANCE AND ON FRENCH NATURALIZATION
In December 2015 I addressed the issue of making it easier to obtain French nationality. Since then I have come across some data on which it is interesting to comment.

In January 2016, the Direction Générale des étrangers en France published data regarding foreigners living in France. Last year, 2,734,413 held an immigration ID granting a legal stay in France, i.e., atitre de séjour.This included EU citizens. Overall, the estimated number of all foreigners in France was 4 million. And 212,365 foreigners immigrated legally in France in 2015, a 0.7% increase from 2014. Also, 86,608 foreigners became French.

A little bit of background is needed to understand what happened. During the Sarkozy presidency, from May 2007 to May 2012, the policy was to restrict naturalization. In 2009 and 2010, 90,000 naturalizations occurred (the procedure takes about two years). But in 2013, the worst year, there were fewer than 70,000. Since then things have improved, almost reaching the level prior to the restrictive policy.

In 2015, 28,529 undocumented aliens in France obtained residency permits, down from 32,244 in 2014. And 26,700 people obtained political refugee status, up 22%. Most were Syrian or Sudanese, with 5,000 requests each. The approval rate increased by 33.3 % from 2014. However, the rate of success, including requests on appeal, was less than 32% in 2015, at 26,700 approvals for 79,130 requests. This is still very low, so refugees should decide early what they will do in the case of a definitive refusal.

For more information (in French), see www.lemonde.fr/societe/article/2016/01/15/regularisations-demandes-d-asile-visas-les-chiffres-de-l-immigration-en-2015_4848157_3224.html

SHORT-TERM RENTAL AND THE PARIS CITY HALL RAIDS
On January 12th the Paris city hall launched another major raid in the 1st and 6th arrondissements to find short-term rental apartments.

Last May, 80 buildings were checked in three days in the Marais. On average, the city checks 400 to 500 apartments a year. In 2014, 20 owners were sentenced in court and the total fines for the year came to 560,000 €. The average fine is 10,000 € and the maximum is 25,000 €.

City hall claims the fines are way too low compared to the rent, which it says averages 1,000 € a week. It is asking the government to quadruple the fines so as to fight this problem more efficiently. Furthermore, the city plans to increase its team of inspectors from 20 to 25 people in the near future.

Currently the law allows an owner to rent out a primary residence no more than four months per year and the city clearly is not going after such people. Instead it is targeting people who rent out apartments all year round and in effect run a business this way. Paris has become the top destination for clients of Airbnb, which has about 50,000 apartments in the city advertised on its website. At the current rate of inspection it would take 100 years to check them all, so clearly the odds are still in favor of the short-term rental industry.

But if the maximum fine eventually reaches 100,000 € per sentencing, is it worth it to take the risk? Many owners would not have this kind of money.

For more information (in French), see www.lemonde.fr/immobilier/article/2016/01/12/a-paris-une-nouvelle-operation-coup-de-poing-contre-les-meubles-touristiques_4846091_1306281.html

CONSEQUENCES OF A TAX AUDIT FOR AUTO-ENTREPRENEURS AND, MORE IMPORTANT, TO THEIR SO-CALLED CLIENTS
Despite years of articles in the French media detailing the horrid consequences ofauto-entrepreneur status, it continues to be seen by the public as a wonderful solution. The tax authorities, URSSAF and labor inspectors are all working toward the same goal: determining whether eachauto-entrepreneur is really an independent worker. This means checking that each one has established a legitimate business with several clients and a real range of services, and a related fee policy.

Under the French legal concept called thelien de subordination, employees are defined as subordinates. If anauto-entrepreneur is not free to offer his/her services on his/her own terms, the inspectors have the right to requalify the person as an employee. The main consequence is a significant financial burden for the employer in terms of social charges. The newly defined employee is reimbursed for the social charges paid and the employer is charged the related taxes, since the amount paid is now considered net salary. As the sums were not paid on time, the inspectors add the usual late fees and interest. This can be lethal for the business and the employee is almost certain to be out of a job right away.

As I have explained several times, catching the companies that abuse the system is quite difficult. On the other hand, systematically checking theauto-entrepreneurs themselves is very easy and fast. One looks at their invoices: if the same name appears several times and constitutes the majority or sole source of income, the inspector knows that corporation can be nailed for fraud. There is no more need to search for a needle in a haystack.

• These are the points the inspector checks to evaluate the situation:
• How many clients: just one or several?
• Is theauto-entrepreneur a former employee of the company?
• Is the work organized by theauto-entrepreneur or by the so-called client?
• Is theauto-entrepreneur in a position to take initiatives and change the way the work is done?
• Does theauto-entrepreneur use his own material and equipment or that of the client?
• Does theauto-entrepreneur choose the schedule and location of his work?
• Does theauto-entrepreneur must report frequently to the client?

All this enables the inspector to determine how much the freedom theauto-entrepreneur has to perform the work. If there is not enough freedom, subordination is proved and the consequence isrequalification with its dreadful financial consequences for the employer. If the fraud is considered blatant, it becomes a felony, travail dissimulé (Article L. 8221-5 of the Code du Travail). The employer then faces three years in jail and a maximum fine of 45,000 €, above and beyond the tax bill explained above.

Now a new scam has appeared, just as horrid but harder to catch. Almost all employers, when hiring a new employee, require a trial period ranging from one to six months, during which the employer can dismiss the employee without giving any reason, although the employee is covered by French law in all other respects. But a growing number of employers, once the right candidate is chosen, require the relationship to start withauto-entrepreneur status instead of the regular trial period. The registration is quick and easy, and the person wants the job, so they register for the status. The employer can then ask for insane working hours without having to pay overtime and can keep theauto-entrepreneur on his/her toes the entire time. At the end of the contract, there may be no more need for theauto-entrepreneur who is dismissed after having been used and abused.

For more information (in French), see www.lemonde.fr/emploi/article/2016/01/20/travailler-avec-des-auto-entrepreneurs-attention-au-salariat-deguise_4850689_1698637.html

THE MOST COMMON SCAMS FRENCH LANDLORDS PULL ON TENANTS
Here are the most common scams of French landlords, according to data published in Le Monde. The link to the article is at the end of this section.

Some 2,500 emails received by the Confédération Générale du Logement in 2014 have been classified by topic.

• 1 – The most common complaint is the poor condition of the lodging, with factors such as severe dampness, water leaks, defective electrical systems and unsanitary living conditions. This represents 13% of the complaints and the share is growing, which shows that landlords are unwilling to do the minimum repairs needed.
• 2 – The second commonest complaint is failure to reimburse the security deposit, which accounted for 12% of the emails. In 95% of the cases, the landlord claimed repairs were needed as justification for keeping the security deposit.
• 3 -In third place is a sudden increase in condo charges that the tenant must pay. It is almost always accompanied by a demand to pay the past balance, which can go back several years. This represented 8.5% of the complaints. The bad news is that the money is owed since the tenant uses the services of the condominium.

For more information (in French), see www.lemonde.fr/argent/article/2016/01/07/locataires-contre-proprietaires-les-litiges-les-plus-courants_4843172_1657007.html

Best regards,