With a large population and an economy known for its roots in the oil industry, Iraq might not be at the top of everyone’s mind when it comes to hiring professionals. However, the country has a growing economy and a large pool of skilled workers.
In this article, you will learn about the possibilities of hiring people in Iraq, what you should consider when recruiting professionals in the country and how we can help you with this process.
Overview of Iraq
Iraq is located in Western Asia, bordered by Turkey, Iran, Kuwait, Saudi Arabia, Jordan and Syria. With a population of 44 million people, the country has a large diversity of ethnic groups, including Kurds, Turkmen, Armenians and Persians. Although the vast majority of Iraqis are Muslims, other religions are observed in the country. The official languages in Iraq are Arabic and Kurdish.
With a long history that dates back to 6 BC, Iraq has a beautiful culture and a relevant presence in the world economy. The country is a federal parliamentary republic, which means the president is the head of state, and the prime minister is the head of government.
For most people, Iraq’s economy is known for its connection to the oil industry. In fact, the country is a founding member of the Organization of the Petroleum Exporting Countries (OPEC). Iraqi oil reserves represent nearly 8% of the total global oil production.
However, different sectors of Iraq’s economy are growing. Industries such as energy, construction and agriculture are evolving, with the country’s economy forecasted to grow 5.4% by 2024.
Minimum wage
Wages in Iraq are usually paid in the local currency, the Iraqi Dinar (IQD). The minimum wage is set at 250,000 IQD, which is equivalent to US$ 214.
Since this amount hasn’t been revised since 2015, most jobs pay more than the minimum wage, with the average salary in the country being around 1.7 million IQD per month. This means an Iraqi worker receives closes to US$ 15,000 per year.
Working hours
Iraqis and people working in the country will work eight hours per day, from Sunday to Thursday.
According to Iraqi law, workers must take a 30 to 60-minute break after working five hours straight. A typical lunch break takes about this much time.
Since most of the country is Muslim, Ramadan is respected, and during the period, which changes every year according to the Islamic lunar calendar, the work hours are reduced to six hours a day.
Overtime
Every sector and industry has its own regulations regarding overtime. Only an hour of overtime per day is allowed for physically demanding activities, such as industrial activities. Other work, such as office jobs, will enable workers to do up to four hours of overtime a day.
Employees must be paid an extra 50% of their hourly rate for working on weekends, days of rest or extra hours.
Benefits
The Iraqi law does not list mandatory workers’ benefits. The country’s social security system should cover everything, such as a pension scheme, health insurance and sick days. However, each company might include different benefits to attract workers.
Types of leave
There are different types of leave in Iraq, depending on the work and necessity. We’ll go into detail for each one, but it is important to bare in mind that the country has at least 13 public holidays.
The country follows the Islamic calendar, with public holidays such as Milad Un Nabi on January 24th and the Islamic New Year on July 19th. The list of holidays in 2023 is as follows, though they are subject to change yearly:
New Year’s Day - January 1st
Army Day - January 6th
Milad Un Nabi - January 24th
Eid al Fitr - April 22nd, 23rd and 24th
Labour Day - May 1st
Eid al Adha - June 29th and 30th, and July 1st and 2nd
Republic Day - July 14th
Islamic New Year - July 19th
Ashura - July 29th
National Iraqi Day - October 3rd
Other holidays may vary according to the Muslim calendar.
Annual leave
While working in Iraq, employees will have a minimum of 21 days of paid leave for each year they work in a company. People who have physically demanding jobs, such as hazardous activities or handling heavy machinery, will get 30 days per year.
After five years of working for the same company, workers get a bonus of two days of paid leave for each year they’ve worked in the business.
Sick leave
According to Iraqi law, workers are entitled to 30 days of paid sick leave every year or a total of 180 days per time of service.
In case of an accident or a severe injury that will leave the worker incapable of returning to work for a more extended period, the Social Security Law comes into play, with employees getting paid by the government.
Maternity and Paternity leave
New mothers get 72 days of paid maternity leave. However, depending on the contract or employee discussions, this period can be increased.
As for paternity leave, legally, new fathers don’t get paid time off after the birth of their children. They can take an unpaid leave of up to three days to look after a newborn or care for kids under six.
Taxes and contributions
All income in Iraq is taxed, regardless of the residence of workers. Even people who receive salaries from other countries will be taxed in Iraq.
Companies have to contribute to the social security system of the country, which means 12% of an employee’s salary will go directly to the Iraqi government. However, companies in the oil industry pay more. For those workers, 25% of their wage is directed to government contributions.
The country also has different rules when it comes to income tax. While in Iraq’s federal region, the income tax varies according to income, in the Kurdistan region, income tax is 5% after the minimum band.
Navigating taxes and registrations in any country is challenging. Companies like Mselect can help you understand what you will need and provide information on what your employees must pay in taxes.
Termination of contract
Every company has a probation period when they hire new employees, which is the case in Iraq. Companies can determine a trial period for new hires, after which workers will be employed full-time.
Before the probation period ends, companies don’t need to follow the termination of contract rules. However, after this period – usually three months – it is important to note what can lead to termination and how to fire employees according to Iraqi law.
In Iraq, lousy performance is no reason for immediate termination. First, employees who are underperforming need to be notified through a written warning that they need to improve. If, after 30 days, they do not change their behaviour, the contract can be terminated. The worker must be notified at least 30 days before the final employment date.
Final thoughts on hiring and managing workers in Iraq
As discussed above, hiring people in a country like Iraq can be challenging. Not only must you follow labour laws and tax regulations, but you must also respect the culture and history of the country in which you are seeking workers.
Partnering with a company to manage all the issues that may arise from hiring employees abroad is the safest way to recruit and pay people in other countries. Mselect offers solutions for companies seeking to expand overseas or needing help navigating different markets.
The best way to respect workers and their culture is to ensure you follow their laws and pay fair wages to the people.