Hiring employees in Eritrea is becoming increasingly popular, particularly among companies operating in industries such as infrastructure, mining, agriculture, and manufacturing.

With a disciplined workforce and competitive labor costs, Eritrea presents a favorable opportunity for employers operating abroad to expand into a strategically positioned country along the Red Sea. However, employers must familiarize themselves with the highly regulated employment laws in Eritrea to ensure that workers are hired legally and in compliance.

This guide will explain how to hire employees in Eritrea in 9 key steps. You’ll learn the strategic advantages of hiring in this country, its local labor laws, and the statutory employee benefits that must be correctly administered for all workers.

Why Expand Your Business to Eritrea

Strategic Advantages of the Eritrea Market

There are many strategic advantages to the Eritrean market that make it an attractive country for employment.

Eritrea is known for its geographic position between Africa, the Middle East, and Europe, providing good access to these different markets. It’s rich in natural resources, which has had a positive effect on skilled employment, and labor costs tend to be lower here than in nearby countries.

The Eritrean workforce is known for being disciplined and having a strong work ethic. However, employers from abroad must be prepared for a highly regulated employment environment, with the Eritrean government being heavily involved in employment practices.

Importance of Being Aware of Eritrea's Labor Laws

Employers operating in Eritrea need to be familiar with local labor laws, which are designed to outline the rights and obligations of employers and employees in this country.

Employment is primarily governed by the Labour Proclamation No. 118/2001, which dictates how employment contracts, wages, working hours, annual leave, and terminations must be carried out.

Other relevant acts that provide further information on labor practices in Eritrea include:

  • Transitional Civil Code of Eritrea
  • Legal Notice No. 148 of 2004
  • Ministry of Labour and Human Welfare
  • National Pension Scheme Regulations
  • Employment Injury Compensation Provisions
  • Proclamation on the National Confederation of Eritrean Workers
  • National Confederation of Eritrean Workers

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Step 1: Define Your Hiring Needs

The first step companies must take when hiring in Eritrea is to establish their hiring needs. This involves considering what kind of roles you want to hire and the number of new employees you’re looking to employ.

You should think carefully about your long-term business objectives when hiring new workers. If your ultimate goal is to have a large team of subcontractors, you should think about this before you start hiring to ensure you meet this future goal.

Step 2: Familiarize Yourself with Compliance Requirements

Employers must have a good understanding of Eritrea’s compliance requirements to limit any misunderstandings or legal implications.

This involves understanding mandatory benefits that all workers are entitled to, the tax obligations as an employer, the minimum wage, overtime regulations, and social security obligations.

Employers must also consider any extra rules around hiring foreign employees, such as permits, approvals, and visas.

Step 3: Choose Your Hiring Method

There are three main ways that you can hire workers in Eritrea.

We’ve detailed these below in detail so that you can decide which one is best for your business.

Establishing a Legal Entity

If you’re looking for full control when hiring in Eritrea, it’s best to establish a legal entity.

This will make you the legal employer of new workers, and involves registering with the Ministry of Trade and Industry in Asmara. You’ll then need to select your business structure, draft your documents, open a local bank account, and obtain the correct tax ID numbers, business licenses, and register with the Eritrea Social Security System.

It’s important to consider that while this method will provide you with more control, it is more expensive and admin-heavy than other options.

Using an Employer of Record (EOR)

An Employer of Record (EOR) can be a useful partner when employing in Eritrea, especially for the first time.

An EOR would act as the legal employer for new workers in Eritrea, ensuring they are hired compliantly and receive all entitled benefits. They can also manage employment contracts, payroll administration, and social security contributions.

This is a great option for companies wanting to test the waters in a new country without yet establishing a legal entity.

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Hiring Independent Contractors

If your company mainly hires independent contractors, this is also an option in Eritrea.

This option is mainly used by businesses carrying out project-based work or seeking advisory staff members on a temporary basis.

However, employers must ensure that contractors are classified correctly to avoid non-compliance with strict contractor arrangement regulations in Eritrea.

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Step 4: Develop a Recruitment Strategy

Once you’ve chosen a hiring method, you can start developing your recruitment strategy.

This involves putting together your job adverts, drafting job descriptions, and posting them on high-traffic job sites or professional networks to attract candidates.

You must always adhere to anti-discrimination laws when drafting your adverts, and ensure they’re posted on popular sites, including:

Step 5: Conduct Interviews and Assessments

When you’ve received some job applications, you can start conducting interviews to see which candidates are the best fit for your company.

A good tip when arranging interviews is to bear in mind Eritrean cultural norms to ensure your potential employees feel respected and comfortable. Interviews are typically formal, with professionalism and respect being major priorities.

Job responsibilities, working conditions, and compensation should be clearly explained in every interview to ensure transparency and clarity at every stage.

Step 6: Know the Legal Limitations of Background Checks

Background checks are a normal part of the employment process in Eritrea, with many employers using them to establish if candidates are right for a role.

Employers must only collect information that is relevant to the job in question, and ensure that all personal data is carefully handled and stored. The Eritrean government may be required for particular background checks/security checks, depending on the role and industry.

Step 7: Draft Employment Contracts

All employment contracts must be strictly compliant with the Labour Proclamation No. 118/2001.

Employers must provide all workers with a clear, written contract detailing job title, responsibilities, wages, working hours, leave entitlements, and termination regulations.

If at all unsure, employers are advised to seek local legal assistance with writing contracts before they’re finalized to prevent any misunderstandings in the future.

Step 8: Register with Authorities and Set Up Payroll

Once your contracts have been finalized, you can start registering new workers with the relevant local authorities.

This includes ensuring they have an individual tax ID and social security ID set up, and they’re enrolled on your payroll system to ensure timely and correct payments.

Now is also the best time to enroll your new workers in any health/pension schemes you may be running as a company.

Step 9: Onboard Your New Employees

The last step in the process is to onboard your new workers.

This involves ensuring they have access to all the necessary training and resources they need to do their jobs, and that they’ve been formally introduced to their colleagues.

You should also take some time to thoroughly explain your company procedures and policies – an employee handbook is a good idea to provide all key information in one place.

Key Employment Laws and Regulations

The Eritrea Labor Code

The main labor code in Eritrea is the Labour Proclamation No. 118/2001, which establishes how employment must be carried out by companies and workers to ensure a safe, fair working environment.

Elements such as wages, working hours, annual leave, and terminations are all stipulated in this code and must be followed to avoid legal implications.

Social Security Regulations

Eritrea’s Social Security System exists primarily for public sector employees, assisting them in events of old-age, illness, and work injury.

There are also some social protections provided by the government via free education and healthcare.

Social security rates in Eritrea are typically 6% for employers and 6% for employees.

Employment Standards and Employee Rights

Unions and Works Council

Trade unions are a normal part of employment in Eritrea; however, they only operate as part of a centralized framework.

Collective representation also exists, but primarily through state-recognized bodies.

Types of Employment Contracts

The main types of employment contracts in Eritrea are indefinite contracts and fixed-term contracts.

Indefinite contracts are open-ended agreements that are primarily used for long-term employment, while fixed-term contracts are set for a defined amount of time and are usually used for temporary/project-based work.

Working Hours and Overtime

Standard Working Hours

Normal working hours in Eritrea are 8 hours per day and 48 hours per week.

These hours must be spread evenly across working days, which usually consist of 6 days with 1 day off.

Overtime Regulations

Overtime hours must be paid at an increased rate of 1.25 times an employee’s normal rate if worked between 6 am and 10 pm, or 1.5 times the normal rate if worked between 10 pm and 6 am.

Leave Entitlements

Annual Leave

Employees in Eritrea are entitled to 14 days of paid annual leave per year after one year of employment.

This increases by 1 day per year of service, up to a maximum of 35 days per year.

Sick Leave

Employees can take up to 6 months of sick leave if they have completed their probationary period.

This is paid at full pay for the first 2 months, part pay for the next 2 months, and unpaid for the remaining period.

Maternity and Parental Leave

Female employees are entitled to take 60 days of consecutive paid leave if they have a baby.

This is paid in full and can be taken either after delivery or before birth if a medical certificate has been issued.

Male employees are entitled to 3 days of paternity leave after their child’s birth.

Termination and Severance

Notice Periods

Notice periods in Eritrea typically start at 7 days for employees with under 1 year of service, and increase with experience.

Written notice is required for lawful terminations.

Severance Pay

Employees who are dismissed without fault are entitled to severance pay.

This is payable as 2 weeks’ wages per year of service for the first 5 years of continuous service, and 3 weeks’ wages for between 5 and 10 years of continuous service.

Mandatory Contributions

Social Security Contributions

Social security rates in Eritrea are typically 6% for employers and 6% for employees. Contribution rates are overseen by the Eritrean government authorities.

Health Insurance and Pension

While there is a government-run public health system in Eritrea, some employers choose to offer their workers supplementary medical assistance as part of their compensation packages.

The pension system is run by the Eritrean government and relies on mandatory social security contributions for funding.

There are limited private pension options, but these are not widespread.

Optional Benefits

Employers are encouraged to offer their workers supplementary benefits in addition to mandatory benefits to improve staff retention and attract candidates to job roles.

Some examples of popular supplementary benefits in Eritrea include:

  • Transport allowances
  • Housing support
  • Meal allowances
  • Performance bonuses
  • Advanced training programs

How to Hire Employees in Eritrea – Our Take

Remote People can assist companies hiring in Eritrea through our Employer of Record (EOR) services.

We support your business by managing the legal employment of workers in Eritrea, ensuring they are hired compliantly and receive all mandatory benefits under local labor regulations. This allows you to build a team in the country without setting up a local entity or navigating complex compliance requirements on your own.

Using an EOR can be especially helpful when testing the waters in a new market, giving you the flexibility to hire quickly while staying focused on other priority areas of your business.

Contact Remote People to learn how we can support your expansion into Eritrea.