Social protection is a set of mechanisms put in place for collective welfare. It allows the citizens of a country to better manage social risks (accidents, illnesses, childbirth, disability, unemployment, retirement, etc.).
If public sector employees and private sector salaried workers benefit from it thanks to a contribution system, what about the independent workers ? Umbrella employment is an interesting solution because it allows freelancers to benefit from the same social advantages as private sector employees.
Discover how the umbrella company offers better social protection for independents.
Social protection: what exactly is it?
Social protection is made up of several systems (general, special, self-employed, etc.) put in place to anticipate the financial consequences of social risks that can compromise a person’s or their family’s economic security.
1- There are two kinds of social protection mechanisms:
Social benefits that are paid directly to households in the form of allowances, pensions, or reimbursements for health care;
Social service benefits consist of free or low-cost services in hospitals or nurseries. Social protection organizations finance them directly or through donations.
2- Social protection: methods of coverage
Social benefits fall into three modes of support:
Social insurance which protects affiliates against loss of income (illness, workplace accident, unemployment, old age, etc.) in exchange for contributions calculated based on wages. This protection is provided for contributors and their dependents;
Social assistance intervenes to support individuals and their families against all forms of poverty. This benefit guarantees a minimum income, but it does not necessarily cover a clearly defined risk. Granted subject to means testing, this form of social protection does not require contributions: it is therefore “non-contributory.” Social assistance includes the ten social minima, the RSA (Active Solidarity Income) and the AAH (Allowance for Disabled Adults).
Universal protection provides coverage for certain types of expenses for all individuals, without means testing and without contributions to be paid. For example, universal health coverage allows all workers or residents in France to benefit from coverage of their health care costs.
What about social protection in the context of umbrella employment?
Portage salarial (umbrella company employment) is a form of work that offers many advantages for independent workers and self-employed micro-entrepreneurs. It allows them to have the status of a salaried employee under an umbrella company and to benefit from all social coverages provided for traditional employees while remaining independent.
Umbrella company employment is also attractive because it eliminates the need to carry out administrative steps to obtain social coverage. The salaried employee under an umbrella company benefits both from the freedom and autonomy of self-employment and from the social protection reserved for employees. Discover in detail the features of social protection for this form of work.
1- Social security coverage in umbrella employment: the general scheme
The umbrella company’s mission is to employ qualified workers who can offer intellectual services such as training, consulting, engineering and management. To establish the relationship with the salaried employee under the umbrella company, the umbrella company draws up a proper employment contract that both parties must sign.
Thus, the salaried employee under the umbrella company is like an employee of the umbrella company and not of the client companies. Indeed, it is the umbrella company that pays social contributions (employer and employee contributions) for the self-employed worker. This allows the umbrella employee to enjoy all the benefits granted to a conventional employee in terms of social security, health coverage and medical expenses. Hospitalization costs and certain medications can also be reimbursed.
Independent workers who choose the umbrella-employee status can also have paid leave at a rate of 2.5 days per month, or 30 days per year. They also have sick leave coverage and professional liability insurance.
2- Social protection in umbrella employment and daily allowances
When the umbrella employee encounters a health problem and is no longer able to work or carry out the assignments entrusted to them, daily allowances are paid during the sick leave. Since the 1st January 2016, this form of social protection is granted regardless of the insured person's length of service.
The umbrella employee on sick leave must inform the umbrella company and their Primary Health Insurance Fund (CPAM) within 48 hours. The amount of the daily allowance is calculated based on the base salary. Thanks to this system, consultants and independents can receive daily allowances during this waiting period.
3- Social protection in umbrella employment and unemployment benefits
The umbrella employee can also pay contributions to protect against unemployment. It can also benefit from the Return to Employment Allowance (ARE). It is possible to combine partial ARE and a salary (under conditions) when the umbrella company takes the time to declare all its umbrella employees to URSSAF.
The unemployment benefits are only granted to consultants who meet certain conditions. They must demonstrate a minimum of 44 days of work or 610 hours during the 28 months preceding the application date. Consultants in umbrella employment can aggregate the days or hours worked across the different assignments carried out.
To be able to receive unemployment benefitsthey must be registered with Pôle Emploi. They must also be able to provide documents proving they actually completed the assignments under umbrella employment or the employer's certificate. It is a umbrella employment company such as ITG, our partner in social protection.
The unemployment allowances in umbrella employment are calculated based on the SJR (Reference Daily Wage). They amount to either 57% of the SJR, or 40.4% of the SJR + €11.84.
4- Social protection in umbrella employment and health insurance
The umbrella worker benefits from social protection that falls under the general social security scheme. In general, they benefit from a company health plan to cover complementary health expenses that Social Security does not cover. Each umbrella company is free to choose its health plan. It can also offer additional supplementary health coverage to each umbrella worker.
5- Social protection in umbrella employment and pension contributions
To prepare for their retirement, self-employed workers in umbrella employment can to pay contributions. The umbrella company deducts retirement contributionsThe amount of the pension is calculated based on an average annual salary and a revaluation coefficient that can vary over the years.
So, as you have understood, umbrella employment is a scheme that offers many advantages in terms of social protection, social security, sickness benefits and pensions. In addition, the umbrella company handles all administrative procedures. Consultants can therefore focus on their work and make their activities profitable.
Social protection within reach of independent workers thanks to umbrella employment
Umbrella employment is an appealing solution for entrepreneurs and managers who want to benefit from a better social protection in exchange for lower charges. It also allows you to benefit from a unemployment insurance.
You can free yourself from all constraints related to administrative, accounting and tax procedures. You also benefit from the experience of other entrepreneurs to adapt more quickly to this status.
Umbrella employment is the solution you need if you are looking for a efficient system to ensure a smooth and secure transition when you are considering trading your salaried position for that of an entrepreneur or freelancer to start working on your own.
ITG is an umbrella company that guarantees you social protection tailored to your needs in case of sick leave, hospitalization, retirement, family difficulties, etc. Whatever your specialty, a team is available to handle administrative procedures, training and follow-ups. Take advantage of the expertise of qualified professionals to enjoy all the benefits of the status of a salaried umbrella employee in terms of social protection.
Our tip for better social protection thanks to umbrella employment
Our partner ITG offers a effective solution for social protection to independent workers and freelance service providers.
To start, use the ITG income simulator to achieve the best salary level and thereby improve the expected coverage.
With over 25 years of experience, the ITG team guarantees a completely transparent service. You are always well informed before any commitment. You also benefit from personalized plans for improved social protection.
