The draft legislation stems from an election scandal over conservative ex-Prime Minister Francois Fillon. If passed, politicians who break the rules could face jail time.
France's lower house of parliament voted 383-3 with 48 abstentions Thursday in favor of its "morality" bill that would bar legislators and ministers from hiring their spouses, parents and children.
Should the upper Senate object, the National Assembly held by President Emmanuel Macron's centrist party could next week use its power to overrule.
The two houses remain at odds on an accompanying bill on discretionary funds that has to be passed separately because of its constitutional implications.
The initiative stems from a scandal that broke in January over conservative presidential candidate and ex-premier Francois Fillon.
Penalties, controls proposed
If finalized, politicians who employ spouses or children will face jail terms of up to three years and fines of up to 45,000 euros ($53,280).
A new system of controls over reimbursements to politicians for expenses is to be introduced.
Out with the old, in with the new. President Emmanuel Macron - France's youngest ever leader - has promised to introduce far-reaching reforms, including steps to overhaul parliament
Thursday's initial assembly vote followed Wednesday's passage in the Senate of a bill to reform France's complex labor code using only presidential decree.
The elections of the centrist Macron in May and his partly novice REM (Republic on the Move) party in June was built on his pledges to reform labor and end hiring of family by politicians.
Fillon's wife on salary
In January, the satirical newspaper Le Canard Enchaine alleged that Fillon, then a conservative presidential candidate had had his wife on salary for years for little, if any, work as an assistant.
Judges are continuing to investigate those and other allegations.
The scandal thrust the spotlight on family hires by dozens of lawmakers at the time and heightened public distrust of politicians.
Excessive reaction, says opposition
During National Assembly debate last week, Julien Aubert of the opposition The Republicans party, described the hiring bill as excessive.
"It's like pig flu: one pig is ill and the whole herd gets put down," he said.
ipj/kms (dpa, Reuters, AFP)