Tax-free French OT

May 18, 2007

Europeans have always had a different take on work than we Americans. That could be changing, at least in France.

New French president Nicolas Sarkozy wants to do away with his country’s cherished, at least by employees, 35-hour work week.

Currently, French employees who work more then 35 hours a week get comp time. Sarkozy wants to tweak the system so that instead of more time off, workers who clock in for hours 36 through 40 would get tax-free overtime pay.

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According to this report on NPR’s Morning Edition, Sarkozy is listening to foreign (i.e., American) employers, who argue that the 35-hour week puts them at a competitive disadvantage. Until the companies get a full 40 hours from all staffers, they say they won’t be investing more in the country.

Economists, however, say the shorter work week isn’t a drag on the French economy. In fact, many point to data that indicate French workers already are as productive or more productive per hour worked than we American wage slaves. The Organisation for Economic Co-operation and Development says the short week has a neutral effect on business.

Personally, I think it’s primarily a control, rather than competition, issue. Even if we workers can do the same job in 35 hours instead of 40, the proverbial man still wants us working on his terms, rather than ours.

That mindset is part of the reason why telecommuting, which has been championed as the employment wave of the future for more than 30 years, today is still viewed as more a complement to rather than a substitute for the old-fashioned office.

And, as a former U.S. cube farm dweller, I want to leave my French working brethren with one word of warning: Watch out. Your annual August holiday could be next!

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More possible bleu, blanc et rouge tax tweaks:
In addition to tax-free OT, Reuters reports other Sarkozy-supported changes include his previously promised lower tax rates that are luring some expatriates back to France, as well as a U.S.-style tax deduction for home-loan interest.

But, as noted in this Bloomberg article, while the tax changes will help entrepreneurs and other businesses, Sarkozy has his work cut out in implementing them.

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