Auto-entrepreneurs: Employers or Suckers?

Facing members of the public on a live television debate in 2009, French President Nicolas Sarkozy defended his economic policies. On the show was a carefully selected young entrepreneur, Elodie, a wedding planner, who took advantage of the new tax-incentived “Auto-Entrepreneur” status to launch her own business. To Nicolas Sarkozy the plan is one way to reduce unemployment; now the status of Auto-Entrepreneur is fast becoming a “social phenomenon”. In the first two years alone 600,000 people in France created their own companies.
Journalist Jean-Louis Perez took a close look and discovered under-hyped realities. Behind the apparent success, we find many abuses and a new kind of insecurity. Some employers are using the opportunity to avoid hiring employees under classic labour law to save on payroll taxes. Others dismiss employees with permanent contracts hiring them back immediately as auto entrepreneurs without any job security.
Jean-Louis Perez highlights the case of Miroslav in the Paris region. Unemployed, he took the status of auto entrepreneur to start his own business, assembling computers in his own living room. But after five months his turnover was still zero. Which is the case for one in two auto entrepreneurs in France. Because most of these enthusiastic new businessmen and women conduct no market research whatsoever. Sandrine, an interpreter and guide, denounces the practices of a travel agency that forced her to take the status of auto entrepreneur.
Stephane was an ambulance man on a permanent contract. He explains how his former employer made him take up the entrepreneur status and then sacked him overnight. During a job interview where journalist Jean-Louis Perez pretends to be a candidate, the boss even offers him to complete the application procedure on the official government website on his behalf. Although the auto entrepreneur status was never specified as a requirement in the job offer.
Interviewed for the documentary, the creator of the auto entrepreneur regime, former Minister Herve Novelli, insists it’s a success. Even if half of the businesses have generated no financial activity and those who manage to scrap some revenue averagely earn less than 800 Euros a month.