Hiring in Djibouti: the work authorisation, the contract and a salary worked through, step by step

Move someone who is already in Djibouti

A work authorisation lapses as soon as a foreign employee leaves their employer, for any reason. The employer then declares the end of service to the labour administration. The move needs a new contract, with its own visa and work authorisation.

A Djiboutian employee works out the notice their current contract sets: a month for employees, and three months for supervisors and managers. Where the current employer has given notice, they can leave before it ends once they have found a new job, without paying for the notice not worked.

Check the role is open to a non-Djiboutian

Djiboutian nationals have priority in hiring. An employer can recruit a foreign national only where it shows it found no Djiboutian who matches the job's profile.

The Minister of Labour can refuse a work authorisation, or its renewal, where the person's qualifications do not meet the needs of the national economy. The Minister can also refuse where equivalent Djiboutian skills are available on the labour market. A refusal can be challenged like any administrative decision.

Someone in Djibouti on a tourist, study, health or private visa cannot take a job. Employing a foreign national without a residence card and a work authorisation is prohibited.

Set the contract up right

An open-ended contract is made in writing. So is a fixed-term contract longer than a month, a contract for work away from home, a foreign employee's contract and any trial period. Wherever it is signed, a contract performed in Djibouti follows the Code du travail.

The Code lists seven cases for a fixed-term contract, beside those made under schemes to bring people out of work into a job. Among the seven are seasonal work, a set task of up to six months, the replacement of an absent employee and a passing rise in activity. A fixed-term contract runs for up to 12 months, renewable once. A contract that does not meet these rules is open-ended.

On an open-ended contract, a trial period lasts up to 15 days for staff paid by the hour, a month for staff paid by the month and three months for supervisors and managers. It can be renewed once, in writing. Either side can end it at any time, without notice or compensation.

Pay is in legal tender, whatever the contract says. Monthly pay is paid within eight days of the month's end, with a payslip.

The legal week is 48 hours, as eight hours on each of six days, or spread unevenly with no day over nine. A working day spans no more than 12 hours, breaks included. The weekly rest is at least 24 hours, from Thursday midnight to Friday midnight.

The employer can require up to five hours' overtime a week. More needs the labour inspector's authorisation first. No week goes over 60 hours, and no day over 12. Overtime is paid at 25% more up to the 56th hour of the week, and 50% more after it. Overtime between 22:00 and 05:00 is paid at 75% more. On the rest day or a public holiday it is paid at 50% more by day and 150% more at night.

Know the employee test before you engage a contractor

Djibouti's Code du travail treats as a worker anyone, of any sex or nationality, who puts their professional activity under the direction and authority of another person for pay. Neither side's legal status counts in deciding it.

A contract performed in Djibouti follows the Code wherever it was signed. The one exception is a worker posted under another country's law, for a mission in Djibouti of no more than six months.

The salary tax uses the same test. It taxes all pay for work done under another's direction and authority.

A role that needs a work permit goes through employer of record.

Work out what a salary costs you and what the employee takes home

Take an employee on DJF 250,000 a month.

The pension contribution is on the whole salary. Health insurance, family benefits and work accidents stop at DJF 400,000 a month, above this salary.

The salary tax is worked out after the employee's CNSS contributions come off, on DJF 235,000 here. Taxable pay is first rounded down to a whole multiple of DJF 5,000. The bands take 2% of the first DJF 30,000, 12% of the next DJF 20,000, 15% of the next DJF 100,000 and 22% of the rest, DJF 36,700 in all.

The tax takes no account of family circumstances. It is paid over before the 10th of the next month.

Know the leave your people are entitled to

End employment on the law's terms

A fixed-term contract ends at its term. It can end early only for gross misconduct, force majeure, economic difficulties reported in writing to the labour inspection, a court decision or written agreement. Ending it early without cause gives the other side a right to damages.

An employee can resign from an open-ended contract without giving a reason, on notice. An employer can dismiss only for a real and serious cause, which it must prove if challenged. Notice is 15 days for hourly staff, a month for employees and three months for supervisors and managers. The side that gives no notice pays the pay for it. During the employer's notice, other than for gross misconduct, the employee has one paid day a week to look for work.

A dismissal for a personal reason is notified in writing within 48 hours, with its reasons, and the labour inspection is told at the same time. An economic dismissal starts with the labour inspector, told of the plan before any decision. No dismissal can then be notified for eight days, or 21 where more than ten employees are affected. Those dismissed keep priority for rehiring for a year.

Gross misconduct allows the contract to end without notice. The Code's examples include insubordination, dishonesty, violence or threats at work, breach of professional secrecy, drunkenness or khat at work, and repeated unjustified absence.

The Code sets no severance payment. A dismissal without a real and serious cause costs damages of up to two months' pay in a firm of under 11 staff, four months' in one of 11 to 49, and six months' in a larger one. A dismissal with a real cause, made without the written notice or its reasons, costs up to a month's pay.

A pregnant employee cannot be dismissed, except for gross misconduct unrelated to the pregnancy or where the contract cannot be kept going. Final pay is due when service ends. A work certificate is owed whatever the reason.

See what changed this year, and what is next

No change to the salary tax bands, the CNSS rates or the CNSS ceiling took effect in the last twelve months. None is scheduled in a published text.