Ethiopia is a landlocked country in eastern Africa, bordered by Eritrea, Djibouti, Somali, Kenya, South Sudan, and Sudan. It is a multi-ethnic state with 80+ ethnic groups, where modern humans are said to have emerged thousands of years ago. Ethiopia is Africa 2nd-most populous country with a transition economy and a large public sector. The country’s government is in the process of privatizing many state-owned businesses as it moves toward a market economy.
Pregnant employees in Ethiopia receive 120 days of paid maternity leave, where no less than 30 need to be taken prior to the due date and 60 days after the birth. Fathers are entitled to unpaid paternity leave for 3 working days.
Employees can receive up to 6 months of sick leave each year, where the 1st month is paid at 100% of the regular salary, the 2nd month is paid at 50%, and the remaining months are unpaid.
There are 13 national holidays in Ethiopia, and employees are entitled to 16 days of paid time off each year after they’ve worked at a company for 1 year (after that, this amount increases by 1 day for every 2 years of service). Employees can also receive paid leave for marriage or exceptional circumstances (including bereavement).
The minimum wage in Ethiopia is ETB 5,095 per month, and the standard workweek is 8 hours per day and maximum of 48 hours per week. Any work done past this is considered overtime with a maximum of 100 hours per year. Overtime pay will vary between 125% to 250% of the salary depending on the circumstances of the overtime work.
Employers can terminate an employment contract for reasons related to business, personal, or misconduct. There must be notice in writing that details the reason for termination.
The notice period depends on how long the employee has worked at the company:
The severance pay also depends on how long the employee has worked at the company:
While there is no legal requirement to provide a 13th salary bonus, annual bonuses are common in Ethiopia.
★ 11% - Social Security
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It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.