Month: September 2026

Reclassification as Employment: The Criteria to Audit

Posted on by daniel

Keywords. Reclassification, employment contract, relationship of subordination, service contract, freelancer.

Introduction

Your company regularly engages service providers, who send you invoices.

Several months after the end of your collaboration with one of them, you receive a summons to appear before the Labour Court (Conseil de prud’hommes). The provider is suddenly requesting the reclassification of the service contract into an employment contract, accompanied by various financial claims.

In this article, Allison BENICHOU CORCHIA, Partner at d&a partners, analyses the main criteria that make it possible to identify situations liable to result in the reclassification of a service-provision relationship into an employment contract.

Reclassification as an employment contract is a major issue in employment law. Its purpose is to restore the legal reality of professional relationships when the actual conditions under which the work is performed do not match the legal nature of the contract signed by the Parties.

The phenomenon of “disguised employment” (salariat déguisé) refers to situations in which a person carries out their activity under the status of an independent worker (micro-entrepreneur, freelancer, consultant), while the actual conditions under which the assignment is performed correspond to those of an employee.

In this respect, case law has consistently held, for more than twenty-five years, that “the existence of an employment relationship depends neither on the will expressed by the parties nor on the label they have given to their agreement, but on the factual conditions under which the workers carry out their activity” (Cass. Soc., 19 December 2000, no. 98-40.572, Labbane). The Court is never bound by the label the Parties have given to their contractual relationship.

The question then arises as to which criteria enable companies to identify, in advance, the risk that a relationship with an independent worker may be reclassified as an employment contract. In this respect, auditing the contractual relationship is essential.

1. The constitutive criteria of an employment contract

Case law traditionally recognises three criteria for establishing the existence of an employment contract: a work performance provided personally by the employee, remuneration, and a legal relationship of subordination, the latter being the cornerstone of the characterisation.

In its well-known Société Générale judgment, the Court of Cassation defined the relationship of subordination as “the performance of work under the authority of an employer who has the power to give orders and directives, to monitor their execution and to sanction the subordinate’s breaches” (Cass. Soc., 13 November 1996, no. 94-13.187).

Demonstrating the relationship of subordination therefore requires that three powers be combined in the hands of the employer: a power of direction, a power of monitoring, and a power of sanction.

2. The boundary between an employment contract and a service contract

The service contract is defined in Article 1710 of the Civil Code under the name louage d’ouvrage (hire of work): “The hire of work is a contract by which one of the parties undertakes to do something for the other for a price agreed between them.” Article L.8221-6 of the Labour Code establishes, under certain conditions, a presumption of independence in favour of duly registered workers, in particular tradespeople, craftspeople, members of the liberal professions and micro-entrepreneurs. This presumption is, however, rebuttable and may be reversed by demonstrating a relationship of subordination. Article L.8221-6-1 of the same Code further specifies that “a person is presumed to be an independent worker where their working conditions are defined exclusively by themselves or by the contract defining them with their principal.”

The service contract is characterised by the provider’s autonomy: they organise their activity freely, bear the risks associated with its execution, deliver a defined result or service, and receive a price for the service — without being subject to any power of direction or monitoring.

The absence of a relationship of subordination is what distinguishes this contract from an employment contract.

In practice, the boundary between independence and subordination can be blurred; this is why the Court focuses on the actual conditions of performance.

3. The body of evidence: the main criteria to audit

The Court never relies on a single element: it applies the technique of the “body of evidence” (faisceau d’indices). It examines all the concrete conditions of the relationship and assesses, in its sovereign discretion, whether that overall picture tips the characterisation towards employment.

The indicators most frequently relied upon are: the existence of imposed working hours or a schedule set unilaterally by the principal, integration into an organised service, fixed monthly remuneration, and monitoring of the performance of the service.

Furthermore, a worker who devotes the entirety or near-entirety of their activity to a single principal is often in a situation of dependence.

The challenge, therefore, is to audit the reality of the relationship and not merely the content of the contract.

The request for reclassification falls within the exclusive jurisdiction of the Labour Court, and the burden of proving the existence of an employment contract lies with the party asserting it.

4. The consequences of reclassification

Reclassification produces retroactive effects, as if the employee had always been bound by an employment contract. It entails particularly serious consequences for the company: financial consequences (back pay, termination indemnities, various damages, and social security reassessments) and possibly criminal consequences (conviction for concealed/undeclared work, depending on the circumstances).

Conclusion

The reclassification of a service provision into an employment contract is a major risk for companies that engage independent workers. Merely signing a service contract, receiving invoices, or the provider’s registration is not sufficient to secure the relationship.

The company must ensure that the concrete conditions under which the assignment is performed remain compatible with the provider’s independence.

With this in mind, conducting regular audits of contractual relationships makes it possible to identify indicators of subordination in time and to implement the necessary corrective measures.

CASP: how to obtain a MiFID license?

Posted on by daniel

Keywords. CASP, MiFID II, investment services provider, tokenized financial instruments.

Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA) established a harmonized European framework applicable to crypto-asset service providers (CASPs). That framework does not, however, cover all crypto-assets: where a crypto-asset qualifies as a financial instrument, it is excluded from MiCA’s scope and falls in particular under Directive 2014/65/EU (MiFID II) (MiCA, art. 2(4)(a)).

For a CASP, this boundary may be strategic. Obtaining a MiFID authorization may make it possible to broaden its offering to activities that go beyond MiCA’s scope alone.

It should be emphasized, however, that while MiCA provides certain already authorized financial entities with a notification procedure allowing them to provide certain crypto-asset services (MiCA, art. 60), no equivalent mechanism is provided for a CASP wishing to obtain a MiFID II authorization. It must follow the ordinary authorization procedure applicable in France.

Why might a CASP have an interest in obtaining a MiFID license?

The use of blockchain technology does not, in itself, determine the regulatory regime applicable to an asset. In its guidelines of March 19, 2025 on the qualification of crypto-assets as financial instruments, ESMA recalls the principle of technological neutrality: the tokenization of a financial instrument does not affect its legal qualification.

A share, a bond or a unit in a collective investment undertaking (CIU) therefore does not cease to be a financial instrument because it is issued or represented in the form of a token. A CASP wishing to offer its clients tokenized shares or bonds must therefore determine whether the envisaged services fall under MiFID II.

The same reasoning applies to derivatives. The qualification of the derivative is distinct from that of its underlying: a crypto-asset falling under MiCA may thus serve as the underlying of a derivative instrument falling under MiFID II. Certain futures, options, swaps or perpetual contracts on crypto-assets may thus require a MiFID authorization, irrespective of the regime applicable to the underlying crypto-asset.

For a CASP, the interest is therefore very concrete: offering tokenized shares or bonds, or certain derivatives on crypto-assets, may bring all or part of the activity within the scope of MiFID II. Depending on the services actually provided, the player will then have to hold the corresponding authorizations.

What does a MiFID authorization application contain?

In France, the MiFID II license corresponds, for the players concerned, to the authorization as an investment firm, which confers the status of investment services provider (PSI) for the authorized services.

This authorization is granted by the Autorité de contrôle prudentiel et de résolution (ACPR), after approval of the programme of operations by the Autorité des marchés financiers (AMF) (CMF, art. L. 532-1 and L. 532-4).

The authorization application must in particular set out the shareholding structure, the governance, the senior managers and key function holders, the resources devoted to the project and the organization planned for carrying out the investment services applied for (CMF, art. L. 532-2).

Particular attention must be paid to the programme of operations, which must cover each of the investment services for which authorization is sought. It describes the activities envisaged, their organization and the manner in which they will be provided. Its content and the arrangements for its review by the AMF are set out in AMF instruction DOC-2014-01.

In practice, the application must therefore consistently reflect the product offered, the clients targeted, the services applied for and the organization put in place to provide them.

How does the MiFID authorization procedure work?

Once the file has been assembled, the authorization procedure can be summarized in several steps.

  • Filing of the application – Completeness check.

The authorization application is submitted to the ACPR (CMF, art. R. 532-1). The ACPR verifies that the file contains the required information and requests any missing items where applicable.

  • Complete file – Review of the programme of operations by the AMF.

Where the file is complete, the ACPR forwards it to the AMF within five business days. The AMF then has three months to decide on the approval of the programme of operations (CMF, art. R. 532-3; AMF instruction DOC-2014-01).

  • Review – Exchanges with the authorities.

The review is not limited to the examination of the documents initially filed. The ACPR, on its own initiative or at the AMF’s request, may seek the additional information necessary to analyze the file (CMF, art. R. 532-3). These exchanges may relate in particular to the business model, the organization or the arrangements presented.

  • Decision on the authorization.

The ACPR decides on the application within a maximum period of six months from receipt of a complete file (CMF, art. R. 532-3).

That period does not, however, correspond to the total duration of an authorization project. The preparation of the file, which may itself take several months, as well as the exchanges needed to reach completeness must also be anticipated.

In practice, an overall timeline of around nine to twelve months can reasonably be envisaged to obtain a MiFID II authorization, depending in particular on the maturity of the project, the quality of the initial file and the exchanges with the authorities in the course of its review.

Thus, for certain crypto players, this second regulatory building block may nevertheless open up very concrete prospects: offering tokenized financial instruments, developing derivatives on crypto-assets or, more broadly, building an offering at the boundary between traditional finance and crypto. The interaction between MiCA and MiFID II may therefore be worth anticipating as early as the structuring of the project.


The information contained in this article is provided for general information purposes only and does not constitute legal advice. It does not purport to be exhaustive and must be assessed in the light of the circumstances specific to each situation, in particular the business model, the services envisaged and the applicable regulatory framework. It is recommended to seek appropriate legal advice before taking any decision based on the elements presented in this article.

MiCA license in 40 days: who can benefit from the Article 60 fast-track procedure?

Posted on by daniel

Keywords. MiCA, CASP, MiCA Article 60, MiCA fast-track procedure, CASP notification.

Since December 30, 2024, the provision of crypto-asset services in the European Union requires authorization as a crypto-asset service provider (CASP) under Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA).

For certain already regulated financial players, Article 60 of MiCA nevertheless provides for a faster route: certain crypto-asset services may be provided upon completion of a notification procedure, in principle 40 working days after it is filed, without going through the full CASP authorization procedure.

Strictly speaking, this is therefore not a “fast-track MiCA license”, but a mechanism that relies on an existing financial authorization.

Are you eligible for the MiCA fast-track procedure?

    The Article 60 procedure is not open to all regulated undertakings.

    Only six categories of entities are eligible:

    • credit institutions, for all crypto-asset services;
    • central securities depositories, solely for the custody and administration of crypto-assets;
    • investment firms, for services equivalent to those covered by their MiFID II authorization;
    • electronic money institutions, solely for the custody and administration, as well as the transfer, of electronic money tokens (EMTs) that they issue;
    • market operators, for the operation of a trading platform;
    • UCITS management companies and authorized AIFMs, for portfolio management, investment advice, and the reception and transmission of orders.

    A payment institution that holds none of the statuses referred to in Article 60 will therefore have to follow the ordinary CASP authorization procedure.

    What must be prepared for an Article 60 notification?

    The procedure is streamlined, but an Article 60 notification remains a substantial regulatory filing.

    The entity must demonstrate that it is ready to provide the envisaged services and has an appropriate organization. The notification includes, in particular, a programme of operations, information relating to internal control and AML/CFT, a business continuity plan and information on IT systems and their security (MiCA, art. 60(7)).

    Additional documents are required depending on the services concerned. For example, a custody service entails documenting the custody policy and the segregation of clients’ crypto-assets, while an order execution service implies an execution policy.

    Commission Delegated Regulation (EU) 2025/303 specifies the level of detail expected, in particular regarding the program of operations for the three years following the notification, the categories of clients targeted, the jurisdictions targeted, and the human, financial, and IT resources allocated to the project.

    The challenge is therefore to prepare upstream a file sufficiently advanced to be considered complete as soon as it is filed. Information already provided to the competent authority does not, however, have to be resubmitted where it is identical and still up to date (MiCA, art. 60(9)).

    Can crypto services really be launched in 40 days?

    Compliance with this timeline depends directly on the completeness of the file.

    • Day 0 – Filing of the notification.

    It must be sent to the competent authority at least 40 working days before the first provision of the services concerned (MiCA, art. 60(1) to (6)).

    In France, it is filed with the ACPR for credit institutions, investment firms and electronic money institutions, and with the AMF for central securities depositories, market operators and management companies falling within its remit (CMF, art. L. 54-10-7, II and III).

    The competent authority verifies that the required information has been provided.

    • If the file is incomplete – Suspension of the time limit.

    The competent authority requests the missing information and sets a deadline that may not exceed 20 working days. The 40-working-day period is suspended until the expiry of that deadline. Any subsequent requests for additional information or clarification do not further suspend that period, but the services may not commence for as long as the notification remains incomplete (MiCA, Article 60(8)).

    • On expiry of the time limit – Launch.

    Unlike the standard CASP authorization, MiCA does not provide for a formal decision granting a new authorization at the end of the notification. Once the notification is complete and the applicable time limit has expired, the entity may begin providing the notified services.

    However, the right to provide the notified services ceases upon withdrawal of the authorization on which that right is based (MiCA, Article 60(11)).

    An advantageous mechanism within a precisely defined framework

    Article 60 offers a twofold advantage: it speeds up market access and avoids certain requirements specific to the ordinary CASP authorization.

    Beyond its value for players that are already eligible, Article 60 may constitute a genuine regulatory structuring lever for a crypto project.

    Depending on the business model and the services envisaged, various strategies may be considered: using an existing regulated entity within a group, having certain services carried by an eligible regulated partner, acquiring an entity that holds the relevant authorizations or, where this is more consistent with the project as a whole, obtaining a financial authorization that then allows the Article 60 procedure to be used.

    The question is therefore not necessarily whether to choose between a “CASP authorization” and an “Article 60 notification” once the project has been built. The existence of this procedure can be factored in from the outset when choosing the regulatory structure and the entity called upon to carry the crypto activities.

    For certain players, in particular those whose model sits at the intersection of traditional financial services and crypto-assets, Article 60 thus opens up several possible routes to access the European market, the relevance of which will depend on the intended scope of activities, the timeline and the overall regulatory strategy.

    The information contained in this article is provided for general information purposes only and does not constitute legal advice. It does not purport to be exhaustive and must be assessed in the light of the circumstances specific to each situation, in particular the business model, the services envisaged and the applicable regulatory framework. It is recommended to seek appropriate legal advice before taking any decision based on the elements presented in this article.