Back-to-school employment law news 2025

Paid leave entitlements - reversal of case law

On September 10, 2025, the French Supreme Court issued two major rulings to bring French law into line with European Union law on paid leave.

Paid leave and illness: the right to defer

Since 1996, an employee who fell ill while on vacation could not carry over his days. However, the European Court of Justice has made a distinction between leave (rest/leisure) and sick leave (recovery), rendering this case law obsolete.

In order to comply with European provisions, the French Supreme Court (Cour de cassation), in its ruling of September 10, 2025, recognizes the right to defer leave if illness effectively prevents the employee from benefiting from rest time.

Vacation pay and overtime

Until this decision, paid vacations were not taken into account when calculating the threshold for overtime. However, European law stipulates that no practice should discourage employees from taking annual leave.

In its ruling of September 10, 2025, the French Supreme Court (Cour de cassation ) now stipulates that paid vacations must be included in the calculation of the weekly overtime threshold. As a result, an employee on part-time leave for one week can receive the overtime he or she would have earned if he or she had worked the full week.

In conclusion, past practices and the treatment applied to the situations concerned may give rise to disputes and the recognition of rights before the competent courts. Particular vigilance will be required in future situations, in the light of current case law and European Union law.

Phased retirement from age 60

Two decrees dated July 15, 2025 lower the age of entitlement to phased retirement from 62 to 60.

As a result, from September 1, 2025 , employees wishing to take advantage of this scheme must be at least 60 years old and have completed 150 quarters of contributions under all basic schemes. The employee will be able to work part-time, representing between 40% and 80% of a full-time job.

New law to protect employees involved in a parental project

Law no. 2025-595 of June 30, 2025, which came into force on July 2, 2025 and aims to protect people involved in a parental project from discrimination in the workplace, has been published in the Journal Officiel. It provides protection for all employees involved in a PMA or adoption project, and grants them leave of absence.

1. Equal treatment
Protection against discrimination has been extended. As a result, they now apply to :

• All employees, men and women, involved in a PMA or adoption process.
• Accompanying partners (spouses, civil partners, cohabitants).

2. Prohibition of discrimination
No professional decision (hiring, remuneration, promotion, etc.) may be based on a commitment to a parental project.

3. Confidentiality guaranteed
Employees are not obliged to reveal their situation, except to benefit from a specific right (e.g. leave of absence).

4. Leave of absence

• PMA: Paid absences for necessary medical procedures, for those concerned and their accompanying partners (up to 3 examinations per protocol).
• Adoption: Paid time off for accreditation interviews (maximum number to be set by decree).

5. Maintaining rights
All absences provided for by law areremunerated and treated as time actually worked (seniority, paid leave, etc.).

Update on smoking ban obligations

The summer of 2025 saw the adoption of new rules concerning smoking bans, notably in terms of signage and the extension of the areas concerned.

Two new signs:

An order dated July 21, 2025 imposes new models of signage to be affixed in enclosed and covered work areas, as well as in all places already subject to the ban

However, signs created, printed or published before this date remain valid provided they meet the following four criteria:

• Explicit smoking ban;
• The national quit-smoking helpline number (Tabac-info-service);
• Reference to article R 3512-2 of the French Public Health Code;
• A reminder of the penalties for non-compliance.

The decree also imposes a model health warning to be displayed at the entrance to smoking areas. Previous models will remain valid until January 23, 2026.

Smoking ban extended:

Since February 1, 2007, smoking has been banned in all enclosed and covered areas for collective use, whether they are open to the public or are workplaces, as well as in certain areas outside company premises.

Decree no. 2025-582 of June 27, 2025 extends the ban to new areas: outdoor areas of libraries and sports facilities; beaches adjacent to bathing areas during the bathing season; public parks and gardens.

In addition, the order of July 21, 2025 extends the ban to a 10-meter perimeter around entrances to schools, facilities for minors, libraries and sports facilities, during opening hours.

As a reminder, employers who do not comply with these rules, or who tolerate their violation, are liable to penalties that can go as high as a 4th class fine.

VAE developments: supported by the CPF

As part of the reform of the Validation des Acquis de l'Expérience (VAE), a new decree (2025-663 of July 18, 2025) specifies the methods of funding via the Compte Personnel de Formation (CPF).

To remember:

• VAE courses can now be financed by the CPF, subject to certain conditions.
• Support must be provided by a certified organization listed on the France VAE portal.
• The CPF covers the entire course, including jury fees.

For further information or to initiate a procedure, please visit the vae.gouv.fr website.

Change of withholding tax (PAS) rate for married or civil union couples on September 1, 2025

Each year, the rate of the withholding tax (PAS) on income tax is revised on September 1, based on the income declared during the tax year (April-June). In 2025, a new feature comes into force for married or civil union couples.

What's new :

Before September 1, 2025 : the overall rate for the tax household applies by default to both spouses/partners.

From September 1, 2025: the individualized rate becomes the default rule, unless the couple explicitly chooses to retain the global rate.

Possible answers to employees' questions :

The PAS rate is updated each year on September 1, based on declared income.

• In 2025, married/partnered couples will automatically switch to the individualized rate, unless they opt out.

• This change may increase or reduce the withholding tax, depending on the difference in income between spouses. The neutral rate remains applicable if the employee has opted for confidentiality.

• Rates (individual, spouse, household) can be consulted on impots.gouv.fr via the "Gérer mon prélèvement à la source" service.

• Any change of option will result in an update of the rate in the following month's DSN, with a 2-month deadline for application.

Employment of disabled workers: AGEFIPH contribution

Companies still have a few months to verify compliance with their obligations to employ disabled workers. As a reminder, companies with at least 20 employees are required to employ 6% disabled workers, failing which they are liable to pay a contribution to URSSAF or MSA.

The contribution due for 2025 could be higher, however, as some mitigation mechanisms disappear:

• On the one hand, the modulation of the increase in the OETH contribution, which limited its progressive increase (75% in 2022, 66% in 2023 and 50% in 2024), will no longer apply from the contribution due in 2026;
• In addition, a number of expenses that could have been deducted are no longer taken into account, such as participation in events promoting the employment of disabled people, certain partnerships with associations, and professionalization and purchasing initiatives with the sheltered sector.

Employers can contact their usual contacts to check that they are complying with their obligations to employ disabled workers or, if necessary, to identify solutions for reducing the amount of contribution due.

Our teams are at your disposal, so don't hesitate to contact us.