Small business holding its breath

However, according to the national stastic group INSEE, 40 per cent of auto entrepreneurs are not using the status legitimately. Newly elected President François Hollande believes that in many instances, employers will force their employees to register as an auto entrepreneur in order to pay lower social contributions. Not only does this provide statistical errors in terms of employee/unemployment data, it also leaves the employees with fewer benefits, notably a pension.

INSEE also found that a large percentage of auto entrepreneurs are not actually doing the work that they are pretending to do on paper. Hollande believes that it makes it difficult for legitimate and accredited small business to survive when auto entrepreneurs are doing the work, often for a fraction of the cost.

Relax. He doesn't plan on eliminating it, only reforming it.

Despite common belief, Hollande insists that he does not want to eliminate the auto entrepreneur status, only reform it. He views the current "relaxed" running of the auto entrepreneur scheme detrimental to job growth for those legitimately seeking employment and detrimental to small business who are being undercut by unqualified auto entrepreneurs. 

What does this mean?

Hollande believes that the auto entrepreneur should be a way for people that are in the transition of starting their own business to grow organically, without the financial and administrative constraints involved in running a traditional business in France. As such, he may attempt to limit the amount of time that one can be an auto entrepreneur to three years, with the chance of an extension at the end of the third year.

Another one of his propositions is to force auto entrepreneurs to submit a yearly accounts book to ensure that the auto entrepreneur was actually doing their own business rather than working for a specific company.

What are other people saying?

The collective for auto entrepreneurs - the Féderation des Auto Entrepreneurs de France - insists that 71 per cent of auto entrepreneurs want Hollande to keep the scheme but agree that it needs reforming. However, at the same time, three out of four auto entrepreneurs would like to encourage the President to keep the system as is.

Jennifer Denison