The protesters want the government to abandon the reform, which extends working hours and makes layoffs easier in an effort to make France more globally competitive.
French President Francois Hollande has faced months of fierce resistance to the bill from lawmakers, unions and students who accuse him of betraying his leftist base and eroding worker rights.
After a three-hour protest late on Tuesday, police hemmed in the demonstrators, and when the crowd shifted direction, officers moved in with unusual violence, firing rubber pellet grenades and using their shields to squeeze protesters out of the Left Bank neighborhood.
The decision to force passage of the bill by invoking article 49-3 of the Constitution came after the government failed to find a compromise with legislators and convened an emergency Cabinet meeting.
The reform has divided the governing Socialist Party, where a group of rebels refuses to vote for it.
The conservative opposition responded by filing a censure motion, which will force Prime Minister Manuel Valls to defend his pro-business policies and face a no-confidence vote in coming days in the lower house.
Valls is likely to pass the no-confidence vote as the Socialist rebels are, despite their discontent, unlikely to threaten their government’s stability.
Valls was booed by politicians from the far left and from the conservative ranks when he announced the decision at the lower house.
Another street protest against the reform, organized by seven labor unions and youth organizations, was scheduled for Thursday, AP reported.
The decision means the government “refuses the democratic debate on this law,” the FIDL youth organization said in a written statement.
The reform will still need to be debated in the Senate.
The government was in the same situation last year and resorted to article 49-3 to pass an economic reform that has allowed stores to open more often on Sundays.