All you need to know about financing professional training

Law No. 2018-771 "for the freedom to choose one's professional future" has profoundly changed the training sector, including the mechanisms for financing professional training.

State bodies have been reorganized, collecting agencies have evolved, as has the use of funds.

What are companies' obligations in terms of employee training? What are the funding mechanisms for professional training? How can they be mobilized? Our answers in this article.

What are the company's obligations in terms of employee training?

Professional training is an essential pillar of skills development within a company. It's a strategic investment that helps to increase employee productivity, efficiency and versatility, as well as guaranteeing your organization's long-term viability and competitiveness.

In France, companies are required to contribute to employee training through two obligations: 

• adaptation to the workstation
• keeping employees in employment.

This does not necessarily mean that they must train all their employees individually , but that they must set up skills development plans to meet these obligations. At the same time, companies are required to pay the Contribution à la Formation Professionnelle (CFP) and the Contribution à l'Alternance (CFA), which are compulsory contributions that companies must pay.

Companies are thus obliged to design and implement training plans or skills development plans for their employees, according to their specific needs, but there is no specific obligation of means in the ways employees are trained and supported.

These plans can - and should - take a wide variety of forms, with training and support initiatives tailored to the specific needs of each company and each employee. As we shall see in this article, there is a wide range of funding available, depending on the type of scheme chosen.

Nota Bene: 

As an employer, you also have an obligation to hold a professional interview .

The aim of this interview is to encourage employees to develop their skills and career opportunities within the company. 

It is important to note that failure to comply with this obligation can result in a fine of up to €3,000 per employee, via a corrective top-up to the CPF.

Developing skills to stay competitive. 

Beyond the legal aspect, professional training is of strategic importance for companies. Faced with an ever-changing economic environment, it's crucial to maintain a high level of skills within your organization .

Professional training enables you to adapt your employees' skills to changes in the sector, encourage innovation, and thus increase productivity and the quality of the work delivered.

In order to remain competitive and efficient, this is an essential strategic lever .

It's also an effective way of building loyalty andloyalty and commitment by offering them prospects for development within the company. In short, professional training is much more than just a legal obligation for companies.

💡 Empowill's expert advice: You can organize group training courses within your company with an external speaker, this offers you the advantage of training a large number of people while minimizing costs.

What taxes are levied on vocational training?

There are several taxes relating to professional training in companies:

• Contribution to professional training.

• Contribution to the financing of the CPF-CDD.

• Apprenticeship tax (main part).

• The additional apprenticeship contribution.

These financial contributions are essential elements in the financing of vocational training in France. They are levied on companies and are intended to finance employee training and qualification initiatives.

The legal minimum contribution to vocational training applies to all companies, whether industrial, commercial, craft or agricultural, regardless of their legal form, tax system, field of activity or size.

If a company belongs to a branch or professional sector that has signed a training agreement, it must also pay a conventional training contribution in addition to the statutory contribution. 

This is true, for example, of companies in the toy industry.

In addition, companies can choose to pay additional amounts to support the financing of training.

The rate of the statutory vocational training contribution is determined by the number of employees in the company. 

It should be noted that there are specific rates for certain sectors of activity, such as the entertainment sector, the building and public works sector, and the temporary work sector.

For companies with fewer than 11 employees:

• The legal contribution to professional training is 0.55% of gross payroll.

Gross payroll corresponds to the total annual amount of taxable remuneration and all benefits in kind paid to employees. 

This includes wages and employee contributions, as well as bonuses, allowances and tips.

For companies with 11 or more employees : 

• The legal contribution to professional training is 1% of gross payroll.

Nota bene : 

Whatever the number of employees in your company, it's essential to bear in mind that if you employ people on fixed-term contracts, a specific contribution of 1% of gross payroll paid to fixed-term contract holders is also compulsory.

However, some fixed-term contracts do not require payment of the specific training contribution:

• Employment support contract.

•  Apprenticeship contract. 

• Professionalization contract. 

• Contracts with seasonal workers.

For a better understanding of the distribution of taxes linked to vocational training, here's a diagram produced by Centre Inffo as part of an article on "Répartition 2022 par France compétences du produit des contributions à la formation professionnelle et à l'alternance."

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How to finance professional training?

1. Call on skills operators

On April 1, 2019, eleven skills operators (OPCOs) were approved to provide support for vocational training, replacing the former organismes paritaires collecteurs agréés (OPCAs).

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The OPCOs were created following the "Avenir" law with the aim of fulfilling several missions:

• Help companies define their training needs.

• Support work-study recruitment and finance contracts.

• To provide information on vocational training and the schemes available to employees, companies, jobseekers and work-study applicants.

• Support professional branches in their employment/training projects.

Companies are divided into different OPCOs according to their sector of activity. 

They generally have similar skills needs and challenges. To find out which OPCO your company belongs to, visit the France Compétences website.

What costs are covered by the OPCO?

Each OPCO has its own funding criteria , depending on its sector of activity. They have been allocated a budget by France Compétences, with the aim of distributing it among the various companies according to their size and number of employees.

As part of a professionalization contract :

The OPCO finances the contract on the basis of a rate established by the professional branches or by a collective agreement.

This can take the form of a lump sum covering various elements such as :

• Training costs. 

• Remuneration. 

• Legal and contractual social charges for trainees.

•  Transportation and accommodation costs.

For companies with fewer than 50 employees, the OPCO has the option of covering costs in excess of the lump-sum amounts, using funds earmarked for skills development for companies with fewer than 50 employees, according to criteria defined by the OPCO's Board of Directors.

Within the framework of work-study retraining or promotion schemes (ProA):‍

The reform has abolished the "Période de Professionnalisation" (professional training period), and Pro-A (promotion or retraining through work-study) has now replaced the previous scheme: 

• Refocusing on the primary objective of professionalization

• By introducing a notion of alternating work-study programs, with terms and conditions similar to a Contrat de Professionnalisation (professional training contract). 

In this way, Pro-A gives employees the opportunity to change jobs and careers, or to benefit from professional advancement through training.

To be eligible for this professional training financing scheme, employees must have an open-ended contract and demonstrate a need for additional qualifications, particularly in light of technological or work organization changes.

Please note that the starting level of qualification must be lower than the licence grade, the aim being to achieve a higher or identical level of qualification.

The rate of reimbursement for this type of training is determined by an industry or collective agreement.

This is in the form of a lump sum that can cover a range of costs, including tuition, travel and accommodation.

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The OPCO within the framework of AFEST financing :

The AFEST (action de formation en situation de travail - on-the-job training action) is linked to the broadening of the notion of training action, and is a learning modality adapted to the challenges of the field, but it requires in-depth reflection, precise engineering and assessment of what has been learned. It also requires mentoring.

Its implementation requires specific preparation, in particular :

• Work activity analysis.

• Appointment (and training) of a trainer-tutor.

• Organization of reflective phases.

• Specific assessments of training achievements (during the action and at the end).

• AFEST involves mentoring.

OPCOs are tasked with promoting the integration of AFEST into skills development plans, with a particular focus on SMEs and VSEs.

It should be noted that some OPCOs are considering financing AFEST schemes, even for companies with more than 50 employees. 

We encourage you to contact your OPCO for more information.

💡 Empowill's expert advice: Give preference to AFEST, which is an effective teaching method for the learner, offering time savings and a reduction in teaching costs for the company.

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2. Financing vocational training via the co-constructed CPF

The reform introduced the possibility of co-financing the CPF between the company and the employee. In this case, the company finances the training and then requests reimbursement of the portion accepted by the employee via his or her CPF.

To trigger this mechanism of co-financing employee training by the company, it is necessary to :

• Identify strategic skills and associated training courses.

• Communicate with employees about the possibility of this type of mechanism.

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What is the CPF? 

The Compte Personnel de Formation (CPF) is a French scheme that enables each individual, from the moment they enter the job market, toaccumulate training hours throughout their professional career.

These hours can be used to attend training courses leading to qualifications, certificates or diplomas, thus contributing to the acquisition of new skills or further training in a specific field.

The CPF is designed to enhance employees' employability by giving them access to training throughout their working lives.

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How is the CPF funded? 

In 2019, accumulated hours have been converted into euros on the basis of €15 per hour. How the account is funded depends on the worker's status:

• For private-sector employees: Each year, the account is topped up by 500 euros for employees who have worked at least the legal or contractual working hours for the year. 

Part-time employees also benefit from a 500 euro credit if the time worked is at least 50% of full-time. 

For employees who have worked less than 50% of a full-time schedule, entitlements are calculated on a pro rata basis .

The account ceiling is set at 5,000 euros.

• For unskilled or low-skilled employees: the CPF is topped up by 800 euros a year, with a ceiling of 8,000 euros.

The CPF can be used to finance a wide range of training courses:

• Support for validation of acquired experience (VAE).

• Skills assessment.

• Setting up or taking over a business.

• AFEST.

Certificates of Professional Qualification (CQP) can only be used within the framework of the Personal Training Account (CPF) if they are also registered with the RNCP (Répertoire National des Certifications Professionnelles).

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What is the CPF de transition professionnelle?

The CPF de Transition works in the same way as the normal CPF, with the difference that it is aimed at a specific population. Anyone who has lost their job or wants to change career can benefit from the CPF de Transition.

The employee must first make a request to the CPIR (Commission Paritaire Interprofessionnelle Régionale), checking whether the required training is eligible for the CPF de Transition. 

If the training is eligible, the employee can use his or her training rights to finance the training.

If approved, the training costs will be covered by the employer or the OPCO. 

During the training period, the employee's employment contract is suspended, but the employee retains his or her rights, such as paid leave, bonuses, Social Security benefits, as well as eligibility for professional elections. 

At the end of the training course, the employee can request a Validation des Acquis de l'Expérience (VAE) interview at the CPIR, with a view to obtaining a recognized professional certification.

As a human resources manager, the CPF de Transition can offer the possibility of training one of your employees to enable them to obtain a promotion or, if they are dissatisfied with their current position, to enable them to retrain for a new career while remaining with your company, thus preventing them from seeking opportunities elsewhere. 

This will enhance your employee's self-esteem and open up new opportunities.

3. Private and mutual financing: complementary options

In addition to public funding, companies can also explore private sources of financing, such as partnerships with educational establishments or foundations.

What's more, pooling training costs within a business sector or group of companies can help reduce financial burdens while maximizing the benefits of training.

4. Self-financing

The last way to finance professionalization is through your company.

If the CPF and OPCO do not cover all the costs associated with your employees' training, you can supplement this with your own financial resources.

In conclusion, it is essential to remember that each OPCO develops its own training and career support policy.

These policies can vary considerably from one OPCO to another, depending on their sectoral priorities, their clientele and changes in the labor market. For accurate, up-to-date information on services, training schemes and available funding, we stronglyrecommend that you contact your OPCO directly. Professional environments are changing rapidly, and OPCOs are the best informed about the issues specific to their sector. By contacting them, you can benefit from resources and advice tailored to your situation.

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To find out more:
Keys to understanding the vocational training reform.
Infographic: understanding the intricacies of vocational training.
The challenges of vocational training.
Understanding how vocational training has evolved.
EDtechs, a panorama of innovations in training.