Definitive Guide to Hiring in Djibouti

Hiring in Djibouti

Hiring employees compliantly in Djibouti means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Djibouti so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Djibouti; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Djibouti

Employee Probation Period

• Probationary periods for indefinite-term contracts are allowed as follows:
  • Hourly employees: 15 days
  • Monthly wage employees: 1 month
  • Supervisors, executives, and equivalents: 3 months.

Annual Leave in Djibouti

• Employees are generally eligible for 30 days of paid annual leave.

Holidays in Djibouti

Maternity Leave Djibouti

• Female employees are entitled to 14 weeks of paid maternity leave.
• 8 weeks to be taken before the birth and 6 after.

Paternity Leave Djibouti

• Fathers are entitled to 3 days of paid paternity leave.

Sick Leave in Djibouti

• A worker whose illness has been duly established by a certified medical doctor shall retain his or her salary for the following periods, depending on seniority:
  • if the employee has less than 12 consecutive months of service: 50% of the salary for 1 month
  • if he has more than 12 months and less than 5 consecutive years of service: 50% of the salary for 3 month
  • if he has more than 5 years of seniority: 50% of the salary for 9 months.

Working Hours in Djibouti

• The standard work week is 48 hours.

Overtime in Djibouti

• The employer can, after informing both workers and the labor inspector, require workers to perform overtime work, within a limit of 5 hours per week and per worker.
• Overtime work is remunerated at an increased rate specified by a collective agreement.

Termination of Employment in Djibouti

The employer may invoke:

• • Personal reasons (e.g. the employee’s state of health).
  • Economic reasons (including, among other things, the substantial transformation of a position due to technological change (section 48 of the Labor Code), in which case, the affected employee must be given priority for re-employment during the first year following his dismissal and is eligible for compensation, which is calculated by the labor inspectorate based on the type of contract, salary, and the employee’s seniority.
  • Serious misconduct as defined by any of the nine cases clearly stated in article 59 of the Labor Code, or as stipulated in the company’s regulations.
  • An element of greater flexibility is open to employers, where the company can resort to utilizing an option for technical unemployment for a period of three months, renewable once (article 41 of the Labor Code), under which minimal compensation is paid, provided any employees so laid off are given priority for re-employment in the first year following dismissal.

• Under the Labor Code, the employer must give one month’s notice of termination of a contract to general employees and laborers, and three months to supervisors, managers and those in similar positions of responsibility.
• The damages and interest payable in respect of a termination of the contract without just reason can be between two and six months’ salary depending on the size of the company.
• Special conditions apply to staff representatives who may be dismissed without the authorization of the labor inspectorate. In such cases, the employer must pay 12 months’ salary.
• However, if the ground of dismissal invoked constitutes a real and serious reason, even without observance of the usual forms of notice, a labor tribunal may require the employer to pay compensation, which will not exceed one month’s salary

Notice Period in Djibouti

• Under the Labor Code, the employer must give one month’s notice of termination of a contract to general employees and laborers, and three months to supervisors, managers and those in similar positions of responsibility.

Severance in Djibouti

• The damages and interest payable in respect of a termination of the contract without just reason can be between two and six months’ salary depending on the size of the company.
• Special conditions apply to staff representatives who may be dismissed without the authorization of the labor inspectorate. In such cases, the employer must pay 12 months’ salary.
• However, if the ground of dismissal invoked constitutes a real and serious reason, even without observance of the usual forms of notice, a labor tribunal may require the employer to pay compensation, which will not exceed one month’s salary

Djibouti Salary and Wages

13th / 14th Month Pay

• The employer is required to pay social security contributions in respect of an employee’s total salary at a rate of 15.7%, including contributions for the family allowance (5.5%), health and professional injuries (6.2%), retirement pension (4%) and mandatory health insurance (2%).
• The contributions for social security are calculated on the total salary, including fringe benefits, and is capped at DJF400 000 per month.
• The employee also must contribute 4%.

Immigration Djibouti

• Foreign nationals have several options for visas to enter Djibouti, including business visas and tourist e-visas.
• To live and work in Djibouti, foreign employees will need three documents:
• Entry visa
• Residence permit
• Work permit
• The Residence Permit functions as an identity card for foreign nationals.
• Before traveling to Djibouti, foreign employees will need to obtain an entry visa.
• Visa requirements vary, but applicants will need a passport that’s valid for at least six months after the planned departure date.
• Passports must also have a minimum of two blank pages, and applicants will need to be vaccinated for yellow fever.
• The documents required to obtain these permits include:
• A copy of the employment contract with a company based in Djibouti
• A valid passport
• A long-stay visa
• Four passport photos
• A copy of the Free Zone company license
• A written request with the details of the job position and employer

Value Added Tax (VAT) in Djibouti

• The standard rate of VAT is 10%

Mandatory Benefits in Djibouti

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, notice period, and severance pay
• Statutory benefits also include social security benefits

Payroll Accrual in Djibouti

Country Accruals Additional Information

Description

Coverage

Salaried workers covered by the labor code, including private-sector employees and certain public-sector employees. Voluntary coverage for unemployed persons who previously had mandatory coverage.Exclusions: Self-employed persons and agricultural workers.Special system for military and police personnel, civil servants, and members of government.

Payroll Accruals Additional Information

Accrued Benefits in Djibouti

Why use Global Expansion to hire in Djibouti

Establishing a branch office or subsidiary in Djibouti can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Djibouti labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Djibouti law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Djibouti. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Djibouti Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.