Employment Regulations
Key Factors to Consider When Employing in Iraq:
There are several key areas to be aware of within Iraq’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. Iraq’s labour law is known for not being updated regularly and furthermore, difficult to access, particularly as it is almost entirely provided in Arabic. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.
Contracts
Employment contracts in Iraq, under Article 10 of Law No. 71/1987, requires that employer/employee relationships, contracts, register and instruments of work should be provided in Arabic, although Kurdish is also acceptable for labour contracts entered into in the Kurdistan area. Contracts must be in writing, and specify wage amounts and the type of work to be carried out. Salaries and wages must be paid in IQD. Contracts for employment may specify either fixed or indefinite terms, depending of the type of work.
Employee Entitlements
Medical Leave
Employees are entitled to a maximum of 30 days of paid sick leave each year. After these 30 days are used up, the employee is entitled to another 180 days sick leave, paid by the insurance provider rather than the employer. Sick leave is conditional on valid documentation by medical evidence provided by a doctor.
Annual Leave Accrual Entitlement
20 days paid leave, or 30 days if the employee is undertaking dangerous work. After 5 years of employment, annual leave is increased by 2 days per extra 5 years of employment.
Maternity Leave in Iraq
Female employees are entitled to not less than 72 days of paid maternity leave.
Employment Termination
The process through which employment contracts may be terminated in Iraq is complex. There are several authorised grounds of terminations stipulated in the Labour Law, including:
- A mutual written agreement
- The contract term expiration
- Of the employee’s own will
- Where the employee is incapacitated for more than 6 months, due to illness
- Where the employee is incapacitated to excess of 75% of their ability
- Decline in the company’s business, provided that the Labour Minister is informed
It is possible to also terminate an employment contract if in accordance with the Civil Code.
In the case of a dispute between employer and employee, the parties must inform the Minister of Labour and Social Affairs and the President of the General Federation of Employee Unions, then begin to seek conciliation with the assistance of both to reach a mutually acceptable solution. If this fails, employees and employers may submit their dispute to the Labour Cases Tribunal, which makes a decision within 15 days that is final.
Probation Period
The Labour Law allows employers to hire employees on a probationary basis for a period of up to three months, and must be specified in writing through the employment contract.
Pension Requirements
The system of welfare and benefits in Iraq is known for being complex and unclear, particular for foreign employers. Contributions are as follows:
- 12% of the employee’s salary is paid by the employer to cover health insurance, work injuries and pension collectively
- 5% is deducted directly from the employee’s salary
- For the oil and gas industries, the employer contributes 25%.
