1 – What French law really says about offshore HR outsourcing
Before talking about what you can delegate, you need to understand what French law penalizes. Three legal mechanisms govern the relationship between your SME and an offshore service provider that touches your HR functions. Ignoring them means playing roulette with a Urssaf audit.
1.1: Illegal labor lending: the trap nobody explains to you
Article L.8241-1 of the Labor Code prohibits for-profit labor lending outside the legal framework (temporary work, portage salarial, employer groups). When an offshore service provider "lends" you a worker who works under your direct orders, with your hours, on your tools, without autonomy in the execution of their assignment, you are in a situation of illegal labor lending. It doesn't matter whether the worker is in Antananarivo or Lyon.
The determining criterion used by case law: the subordination link. If you are the one giving direct operational instructions, setting working hours and monitoring daily work execution, the offshore worker is de facto your employee. And if they are your employee without being declared as such, you are exposed to the offense of undeclared work (article L.8221-5).
The solution is not to avoid offshore. It consists of structuring the relationship around a service contract, where the service provider retains management authority over its workers. Intermediate management stays with the service provider. You give result-based instructions, not execution orders. This is exactly what a dedicated team model with structured management on the service provider's side enables. To explore the evaluation criteria further, see la checklist des 12 points non négociables avant de signer avec un prestataire offshore.
1.2: Labor trafficking and joint liability: what the client risks
The labor trafficking offense (article L.8231-1) penalizes any for-profit operation supplying labor that causes harm to the worker or evades the application of law, regulations or collective agreements. Concretely, if the offshore worker managing your payslips is paid below the Malagasy legal minimum, works without a local contract or without social coverage, you can be prosecuted as the client.
The joint liability provided for in article L.8222-1 requires the client to verify that their subcontractor is compliant: registration, social declarations, compliance with local labor law. In the event of a failure, the court can hold you jointly liable for the payment of due contributions and wages.
What this means for your SME: before signing with an offshore service provider that touches your HR functions, demand proof of registration, social compliance certificates and local employment contracts for each worker assigned to your account. This is not paperwork. It is your legal shield. The article on l'audit RSE des conditions de travail à Madagascar details how to verify these points remotely.
1.3: Service contract vs disguised employment contract: the 4 distinguishing criteria
The Court of Cassation uses four criteria to reclassify a service as a disguised employment contract. First criterion: does the service provider have its own hierarchical management? If the offshore worker receives instructions solely from you, without an intermediate manager at the service provider, reclassification looms. Second criterion: does the service provider use its own tools and technical resources? An offshore worker operating on the service provider's infrastructure (workstations, network, premises) reinforces the autonomous nature of the service.
Third criterion: is the remuneration flat-rate or time-based? A fixed monthly payment per worker, with no link to an identified deliverable, resembles a salary. The contract must define measurable service objectives. Fourth criterion: exclusivity. A worker dedicated to a single client is not in itself illegal, provided that the subordination link remains with the service provider.
The boundary is clear: you are buying an HR result (sourced candidates, produced payslips), not working time. The service provider organizes the work, manages the team and guarantees the deliverable. You validate, you guide, you do not direct the tasks.
2 – Sourcing and pre-qualification: the scope you can outsource offshore
Recruitment is the most time-consuming HR function for an SME manager. It is also the one that lends itself best to offshore outsourcing, provided a clear line is drawn between what goes to Madagascar and what stays in France.
2.1: Candidate sourcing, the ideal task for a dedicated offshore worker
Sourcing consists of identifying profiles matching a defined brief, on LinkedIn, job boards, CV databases and specialist networks. It is high-volume, methodical work that requires rigor and a good command of Boolean operators. A French-speaking sourcer in Madagascar, trained to your selection criteria, can handle 3 to 5 times more searches than a manager who sources between two meetings.
Legally, sourcing is a standard service contract. The sourcer works under the direction of their Malagasy employer (the service provider). You provide the job description and criteria. They produce lists of qualified candidates according to those criteria. No direct subordination link, no ambiguity.
Point of vigilance: if the sourcing concerns positions in France, candidates' personal data is subject to GDPR. The service provider must apply appropriate safeguards (standard contractual clauses, encryption, retention policy). The article on les obligations RGPD pour les transferts hors UE covers this topic in detail.
2.2: Telephone pre-qualification: framing the script without creating a subordination link
Pre-qualification goes further than sourcing. The offshore worker contacts candidates, checks their availability, salary expectations, suitability for the role and submits a structured report. It is a high-value task that most SME managers keep putting off for lack of time, letting profiles slip away to sign elsewhere within 48 hours.
The legal framework is the same as for sourcing, with one nuance: the pre-qualification script and evaluation grid are business tools that you pass on to the service provider, not operational orders. The difference is subtle but decisive. You define the expected result (a pre-qualification report covering 8 criteria). The service provider organizes its worker's work to achieve that result.
In practice, the offshore worker never makes the hiring decision. They do not sign a job offer. They do not negotiate the final salary. They prepare a complete file that you or your HR manager validate in 10 minutes instead of spending an hour on the phone. This model is exactly that of a dedicated worker who functions like a remote employee while remaining legally under the responsibility of their local employer.
2.3: What you cannot delegate: the hiring decision and disciplinary authority
The red boundary is simple: everything relating to management authority over the future French employee stays with you. The final hiring decision, the job offer, the drafting of the French employment contract, the setting of the final remuneration and the disciplinary management of the employee once hired cannot be transferred to an offshore service provider.
The French Labor Code is clear: the employer is the one who exercises management authority, disciplinary authority and supervisory authority. If your offshore service provider signs job offers on your behalf or handles disciplinary interviews for your French employees, you are creating a dangerous legal ambiguity.
On the other hand, the administrative preparation of these acts (drafting draft contracts based on a template validated by your lawyer, compiling the onboarding file documents, preparing summons letters) can be outsourced like any other administrative task. The key: the offshore worker prepares, you decide and sign. This allocation protects your SME and accelerates your recruitment without legal risk.
3 – Payroll and personnel administration: outsourcing production without losing responsibility
Payroll is the recurring nightmare of the SME manager. Complex, time-consuming, exposed to costly errors in the event of an audit. Outsourcing it offshore is possible, but the scope must be surgical.
3.1: Payslip entry and production: the authorized scope
An offshore payroll manager can collect payroll variables (hours, absences, bonuses), enter them into your payroll software (Silae, PayFit, Sage Paie), produce payslips and prepare social declarations (DSN). This is production work, not legal advice. The distinction is fundamental.
Outsourcing payroll production is not subject to any specific professional restriction, unlike accounting which falls under the professional body. To explore this point further, the article on l'externalisation comptable et les règles de l'Ordre des Experts-Comptables draws the precise limits.
On the other hand, the final validation of payslips, the signing of social declarations and liability before the Urssaf remain with you or your chartered accountant. The offshore worker produces a payslip in accordance with the settings you have validated. If a configuration error causes a discrepancy, it is the client who answers to the authorities. Hence the importance of a structured control workflow: double validation, automated checkpoints, monthly review by your chartered accountant or your CFO.
3.2: Personnel administration: DPAE, mutual insurance, leave tracking
The DPAE (pre-hire declaration), mutual insurance affiliation, leave balance tracking, sick leave management and personnel register updates are purely administrative tasks. They follow regulated procedures with strict legal deadlines (the DPAE must be submitted no later than the working day before the hire date).
A dedicated offshore worker, trained in these procedures and integrated into your HRIS tools, can manage the entire flow. Time zones are not an issue: Madagascar is on the GMT+3 timezone, one to two hours ahead of metropolitan France. The morning DPAE is processed before you arrive at the office.
The non-negotiable condition: the offshore worker signs nothing on behalf of the French company. They prepare, enter, submit. Electronic or physical signatures remain with the manager or HR officer in France. This workflow is detailed in the article on la gestion administrative externalisée et les points de contrôle quotidiens.
3.3: The grey areas to lock down in your service contract
Three contractual points separate clean offshore HR outsourcing from the risk zone. First point: the management clause. The contract must stipulate that the service provider retains management, disciplinary and supervisory authority over its workers. You transmit result-based instructions, never direct operational orders. If you use Slack or Teams to communicate with the worker, do so through a channel where the service provider's manager is systematically present.
Second point: the confidentiality and data processing clause. Payroll data contains sensitive personal information (national insurance number, bank details, family situation). The contract must include the European Commission's standard contractual clauses for transfers outside the EU, an encryption policy and a data deletion procedure at the end of the assignment.
Third point: the reversibility clause. If you change service provider or bring the function back in-house, how do you recover your data, your payroll history, your personnel files? Without this clause, you are locked in. The article on le plan de sortie que votre contrat doit prévoir details the 7 commitments to require.
Your HR function is running at half speed: every week without action costs you missed hires and lost hours
Sourcing, pre-qualification, payroll production and personnel administration are functions that your SME can outsource offshore without breaching French labor law. The condition: structure the relationship as a genuine service contract, with intermediate management at the service provider, defined deliverables and decision-making authority that remains in France. Every month you continue sorting CVs between client meetings, checking payslips at 11 pm and chasing candidates who no longer respond, is a month your SME underperforms. Not because you lack skill. Because you lack hands. Three dedicated, trained, managed workers integrated into your tools, for the price of one French permanent contract. The capacity exists. The question is how many more weeks of delay you are willing to keep accumulating.
