In recent years, more and more workers are looking for autonomy and freedom in their working life. This is why they are more interested in entrepreneurship and self-employment. Do you want to make this choice in order to earn a living without having to submit to an employer? Then one of the first things to choose is your status. Which option is better, freelance or freelance administration? You can find the answer in the following.
What is freelance administration?
To begin with, it is important to know that freelance administration was created in 1988. It has therefore been in use since that time, but was not included in the Labour Code until 2008. This is when this particular status was officially recognised by the legislation. It is considered as a kind of contract or relationship between three different parties:
- The self-employed person
- The portage company
- The client
The self-employed person is the employee who benefits here from freelance administration. He provides intellectual services in various fields and offers his services to a specific clientele. This clientele can be made up of private individuals and companies, public or private companies, also evolving in different fields of activity.
The freelance administration company may specialise in a particular field. In this case, it can only offer freelance administration to workers in this field. There are also generalist portage companies, which diversify their field of expertise and are therefore open to all kinds of self-employed professionals.
When we speak of "portage salarial", this means that the professional does not deal directly with the client, at least as far as the financial aspect is concerned. The freelance administration company is responsible for invoicing the client and then paying the salary to the worker, rather like an employee-employer relationship.
It should also be noted that the ported employee is bound to the portage company by a contract which may be an open-ended contract or a fixed-term contract. In any case, there is a subordination link between these two parties. This explains why some workers, in order to retain their full autonomy and freedom, prefer to avoid the status of ported employee.
What do I need to know about the creation of freelance administration?
As mentioned above, freelance administration has been in existence for several decades. It came into being in the 1980s. It was first set up by an association whose mission was to reintegrate various unemployed executives. At that time, the concept of "portage salarial" mainly concerned senior executives.
When they found themselves unemployed after several years of experience, they could offer their services as consultants to other companies. This work served as a stepping stone to a permanent job. It was only later that freelance administration was extended to all workers and finally introduced to the world of work.
This happened in 2008, and from then on the concept has been growing steadily. There was a real craze for it, even among young graduates, especially those who wanted to be self-employed, while enjoying the benefits of employee status.
In order to ensure optimal management of the portage companies and their activities, various trade unions have been created. The first was created in 1998, and was called the SNEPS. The second was created in 2004, and was called the FENPS. Later, in 2012, these two unions eventually merged. This is how PEPS was created. To date, it is the union representing the largest number of freelance administration companies.
What are the implications of freelance administration for the worker?
Freelance administration is a choice that has several consequences, both positive and negative for the worker. It should be noted that this status offers the worker the guarantee of a framework for his activity, but also an organisation that is beneficial for his development.
About the employee status
Working as a freelancer certainly offers autonomy and freedom, but it should not be forgotten that employees enjoy several very interesting advantages. You will therefore be delighted to know that freelance administration allows you to work as a freelancer, while having access to the status of employee and the related benefits:
- Paid holidays
- Social Security
- Access to training
- Company mutual insurance
- Unemployment insurance
- A provident contract
- Retirement.
Your umbrella company also provides you with civil and professional liability insurance. You can therefore carry out your activity with complete peace of mind and confidence.
About the new work organisation
The second change involved in freelance administration is the organisation of work. It is much simpler, which is of course a major advantage for the worker. Indeed, by opting for freelance administration, you have the possibility of devoting yourself solely to your activity.
You will be able to concentrate on finding new clients and new ideas for developing your business. You will have plenty of time to negotiate your assignments, develop your professional network and define your fees.
You will even have free time to follow professional training courses that will be useful for improving your skills. All this is possible because with freelance administration, the company takes care of all the legal, administrative and accounting aspects of your activity.
You won't have to collect customers or worry about collecting unpaid bills. You won't have to draw up invoices, or deal with the payment of taxes, social security contributions, or anything else. In short, your work is limited to the most interesting aspect of your business: doing what you love, what you are good at, without worrying about the rest.
What type of worker is freelance administration intended for?
Freelance administration is currently a very popular status in the professional world. Since it is recognised by the Labour Code, it is aimed at different types of workers, young or senior, with different projects or objectives. More precisely, we can say that this status is aimed at :
- Active employees or managers who wish to become self-employed while retaining the benefits of their employee status
- Young graduates who want to enter the world of entrepreneurship without taking too many risks
- Project owners, entrepreneurs or freelancers, who want to manage their business without the hassle of administrative details
- Professionals who want to try their luck in a new field and become self-employed
- Retirees or early retirees who wish to continue working occasionally for a few more years
- People who are looking for a job, who are looking for support to start a business and try their luck in entrepreneurship.
How does freelance administration work?
One of the main advantages of this legal status is the way it works. Indeed, it is very simple and therefore easy to set up. To begin with, workers wishing to turn to the portage option must find a company offering this service.
However, before contacting the company, you must first find an assignment that falls within the scope of your skills. It is this assignment that you can present to the umbrella company in order to sign a contract. Once the terms of the employment contract have been established, it is signed by both parties. After this, the umbrella company contacts the client who has taken on the assignment, and also signs a contract with them. In this case, the contract signed is a service contract.
The worker can then set about carrying out the service as agreed with the client. Once the work is finished, the portage company is responsible for collecting payment from the client. It also takes care of all the administrative and accounting work, the payment of taxes, contributions and insurance for the worker. The worker, for his part, is content to choose his clients and assignments, and to receive his salary every month like any other employee.
What are the advantages of freelance administration?
Freelance administration is an interesting choice for workers because it offers several advantages for their business. To begin with, it offers you the possibility of working directly as a freelancer, without having to change your status. You will also not need to set up a company before becoming self-employed.
This means that with this status, you save a lot of money and make it much easier for you to set up your business. In effect, you go straight to self-employed status, with the freedom to choose your clients, fees, assignments, etc., without having to set up a legal structure.
Secondly, thanks to freelance administration, even though you benefit from the freedom of self-employment, you also enjoy the advantages of employee status. You will therefore be entitled to health insurance, retirement and unemployment insurance, not to mention the company health insurance scheme. In addition, just like employees in traditional companies, you will be entitled to paid holidays. Even the precariousness bonus is included when necessary.
As you can see, the status of ported employee offers you the possibility to enjoy a real comfort in your professional life. You benefit from a more secure economic situation compared to freelancers.
The ported employee is not an employee
It is also important to know that, contrary to what one might think, working as a freelance worker and being affiliated to a company does not deprive you of your autonomy. Indeed, the employment contract signed with the umbrella company does not mean that you are subject to the control of a hierarchical superior. You retain all the autonomy you need to carry out your activity.
The proof of this is that the umbrella company does not interfere in the choice of your assignments or your clients. Nor does it intervene in negotiations, as this part of your activity is left to your own discretion.
Note also that in some cases, the network of professionals connected with your umbrella company can be of great use to you. Indeed, you will be able to obtain more assignments and more clients thanks to the company's contacts, opportunities that you will be free to seize or not.
Freelance status: what does it actually mean?
It is important to know that a freelancer is a self-employed person just like a salaried employee, but with a few differences. A freelancer is someone who sells his or her services to companies or individuals. They work in complete freedom, without having to answer to anyone. They set their own rates, choose their assignments, decide on their working hours, choose the payment methods that suit them, offer their clients any discounts or reductions they wish, etc.
Basically, they have complete freedom in the exercise of their professional activity. Depending on their profession, they can work from home. They can also work on the client's premises or in a coworking space. This all sounds very interesting, but the problem is that the freelancer must also manage his or her own finances, accounting, legal procedures, administrative tasks, etc.
In addition, it should be noted that by simply being a freelancer, you do not have any legal status as such. This means that before starting your activity, you must take steps to choose a legal status that will enable you to define your activity legally. You will have to complete the formalities to obtain a SIRET number, as this is essential for drawing up invoices recognised by the law. As far as the self-employed regime is concerned, you can choose between :
- Sole proprietorship
- THE EURL
- The SASU
- THE EIRL.
What are the advantages of being a freelancer?
The main advantage of freelancing is the freedom it gives you. Indeed, as mentioned above, freelancers enjoy total independence in their professional activity. They can also take advantage of the aid provided by the government to encourage self-employment. Thus, depending on your situation, you may be eligible for :
- THE AER
- ACRE
- THE ARCE.
Another advantage of freelancing is that it gives you access to unemployment benefits. In other words, you will be able to keep your unemployment benefits and aids, even while being a freelancer. This will of course not be a possibility if you become a ported employee. So if you want to have a secondary activity until you find a job in a company, freelancing may be a good option. You will be able to enjoy the income from your activity without losing your unemployment benefits.
Are there any similarities between freelance and permanent employee status?
The reason why it is so difficult to choose between freelance work and the status of an employee is that there are several similarities. Indeed, just like freelancers, employees are self-employed. They are free to carry out their activity as they see fit, and can choose their clients according to their own criteria.
Like the freelancer, they are not accountable for their activities and have no line manager. Both are excellent choices for professionals who want to work independently. However, you will have to decide between the two, because although they have similarities, freelancing is ultimately very different from being a contractor.
Read also: The 15 countries to expatriate to when you are a freelancer
Portage salarial or freelance: in brief
It is up to each professional to choose for themselves which status would be most suitable for them, between freelance and freelance administration. It is true that at first sight, being a freelancer offers much more freedom. However, wouldn't the real freedom be to be able to carry out your activity without having to worry about administrative or legal management, as is offered with freelance administration? You can answer this question according to your ambitions, your objectives and your vision of your professional life.
Have you ever tried freelance work or freelance administration? Which of these two solutions would you recommend?
