Do you want to change your legal status or start your first independent activity? Have you thought about Veg Portage?
This form of employment, which combines the benefits of self-employment and employee status, is attracting more and more freelancers. It must be said that Portage is practical, full of assets and suitable for beginner entrepreneurs as well as experienced business leaders.
Let’s find out together how Veg Portage works and the benefits for your business!
What is Veg Portage?
Carefully introduced in the mid-1980s, wedge portage is a rapidly growing market with a turnover of 1.3 billion euros, according to the Federation of Veg Portage Companies (FEPS). Currently, over 100,000 freelancers work under this hybrid status, which provides job security and entrepreneurship freedom.
The definition of wage portage in accordance with L1251-1 of the Labor Code sets out this situation as a tripartite relationship between the freelancer, the client and the portage company:
Veg portage refers to the organized whole of:
“1° On the one hand, the relationship between a company called a “pay portage company” performing a service for the benefit of a client company which gives rise to the conclusion of a commercial contract for the provision of pay portage;
“2° On the other hand, an employment contract is concluded between a wage portage company and an employee designated as a “ported employee” who is remunerated by this company.
So, in a nutshell, how does this contract work?
How does Veg Portage work?
Portage in Achievement of a Mission features 3 actors:
- The freelancer (or salaried employee), an expert in one or more areas, finds and provides services for his clients.
- The customer, which can be an individual, a company, an administration, a local authority or an association. He will order a service from the freelancer.
- Veg Portage Company, which acts as an intermediary between the client and the freelancer. She takes care of preparation of contracts and all administrative part related to service. It also includes invoicing and collection.
To better understand this tripartite relationship, salary portage company ITG has drawn this diagram:
Umbrella Company Responsibilities
In order for the cooperation to be legal and long-lasting, the veg portage company must honor a number of obligations towards the freelancer:
- The wage portage company should establish an employment contract with the self-employed person and take care of the administrative, accounting and social formalities required for its activity.
- It must pay the employee a remuneration commensurate with the services rendered (minus the management costs and mandatory social security contributions stipulated in the contract).
- It has to be invoiced to the mission between the client and the freelancer, as it was negotiated before.
- It assumes obligations related to occupational therapy (information and prevention travel, management of sick leave and accidents at work, etc.).
- Ideally, the Veg Portage company should support the freelancer in the development of their services. It can also provide assistance during the negotiation and drafting of commercial contracts between the employee and his clients.
- Veg Portage Company is transparent about the activity account of the freelancer. The latter should have details of his remuneration, fees charged and his training account.
- It has to be associated with professional liability insurance to the freelancer.
Responsibilities of a Supported Freelancer
Of course, the freelancer also has obligations to the wage portage company:
- Freelancer manages and undertakes prospecting missions. It is up to him to develop his clients and negotiate the terms as well as the prices of his service.
- He undertakes to fulfill his mission in accordance with the terms and conditions defined by the contract.
- The moved employee must be transparent and notify the carrier company in the event of difficulty in carrying out their service. Similarly, if he has to face temporary difficulties that prevent him from working at all.
- He should have proven expertise in his field of activity. Minimum Level III Professional Qualification (BAC+2) is required from 1st July, 2017. Freelancer must have 3 years or more experience in their field of activity, if applicable.
- Freelancer has to submit an activity report to Waze Portage Company on monthly basis. This document includes the number of hours worked per service. This allows the company to invoice the customer and pay, rightfully, the employee.
What are the possible activities in Veg Portage?
Pay is open to portage services, except for individual service missions. This position is for freelancers specializing in marketing, IT, graphic design, management, training, consulting (regardless of sector), secretarial work, etc.
However, the freelancer should never become a “hidden employee” of his client. In addition, he or she must work for multiple clients, never replace an employee (suspended or arrested) and must have a service lasting less than 36 months.
Benefits of Wage Portage for Freelancers
Now that you have a better understanding of how wedge portage works, it’s time to learn about the benefits of this position. And they are very…
Financial security guaranteed by regular remuneration
Opting for wage portage means availing salary from the first month of your activity. In fact, as the portage company takes care of the collection from the customers, it can advance if the latter has not yet paid the invoice.
In addition, as per the collective agreement for supported employees, the minimum remuneration is set between 70 and 85% of the Social Security limit.
In a company like ITG, the salary terms offered to freelancers are:
- Minimum income equal to 75% of the monthly Social Security limit (€2,568 gross in 2021).
- Business Contribution Allowance of 5% to remunerate prospecting and mission preparation time.
- Uncertainty bonus of 10% (on gross pay).
- A reserve amount of 10%, calculated on the remuneration of the previous mission, to compensate for any loss of income between the two services.
If you want to know the salary to be received, you can simulate on ITG Salary Simulator.
freedom from administrative hurdles
When you subscribe to the Pay Portage Agreement, the Company charges you a management fee. According to companies, this rate is between 3 to 15%. For example, in ITG, it is 10%.
These management fees are aptly named because they free you from all the administrative hassles inherent in your self-employed activity. No more VAT declaration, account keeping, invoicing, collection, reminders for unpaid bills, payment of social security contributions… Portage Company takes care of them all!
All you have to do is focus on prospecting and completing your missions.
reinforced social security
You are an employee, so you have the right to full Social Security coverage, which is more beneficial than being self-employed. You get the benefit of daily allowance in the event of sick leave, more lucrative pension rights and even unemployment rights (under certain conditions).
You limit the risk in the event of a decline or loss of activity, but also in the event of illness. With a more permanent guaranteed income, you’ll be better protected.
full autonomy without separation
Even if you are an employee, you remain independent and therefore completely autonomous in the management of your activity. You can select missions, specialize in one area of activity, manage your schedule and work from wherever you want.
You are alone in control of your business, but not isolated! In fact, Veg Portage Company dedicates you a consultant to assist you in the growth of your business.
In addition, it occasionally hosts workshops, training, and networking events that allow you to meet and discuss with other entrepreneurs. Opening up new perspectives, enriching moments that lift you out of loneliness.
Reduction in fees and fixed costs
The management fee for wage portage can sometimes affect and suggest that opting for the second position is more financially beneficial. In fact, choosing this type of business eliminates certain fees and fixed costs such as:
- business asset contribution
- civil liability insurance
- Possible tax or URSSAF audit related costs
In addition, all professional expenses may be subject to exemption from fees, which is not the case with micro enterprises, for example.
You have no turnover limit when you subscribe to a wage portage contract! You are free to develop your activity as you wish, without worrying about any limitations.
On the other hand, you have to achieve minimum turnover to get salary. The average daily rate is between 250 and 300€ to be able to take advantage of this position.
Now you have all the information about Veg Portage! If you choose to take this position, remember to carefully compare offers from different companies on the market.
Important elements to check out, you’ll find its expertise (does the umbrella company know your business?), management fees (be careful, low fees sometimes hide a lack of services), additional services (dedicated consultants, workshops) and training, EC , etc.) or seniority (and therefore experience) on the market.
And to grow your business, you can count on Codeur.com! Every day, project leaders are looking for freelancers to support them.