Information for Investors

Labour and Employment

In conformity with the international conventions and other legal commitments, Ethiopia has issued a labor law to ensure that worker-employer relations be governed by the basic principles of rights and obligations with a view to enabling workers and employers maintain industrial peace and work in spirit of harmony and cooperation.

The Labor Law is believed to be consistent with the investment policy of the country. Foreign investors shall obtain work permits for their expatriate employees directly from the Ethiopian Investment Commission (EIC) during the implementation phase of the project. During the operational phase, the Ministry of Labor and Social Affairs will issue the work permit. The EIC processes applications of work permits in two hours.

The Labor Law has fixed nominal hours of work as eight hours a day and thirty-eight hours a week. Work done in excess of these hours is deemed to be overtime. The maximum number of office closure days in a year is12.

The government has strategic intervention to ensure linkage between economic growth and employment. Accordingly, most of the urban dwellers benefited from the economic growth achieved in the past years.

Ethiopia has abundant supply of skilled workers in various fields at internationally competitive rates.

Wages and salaries vary depending on the size of enterprise, type of profession and level of skill required. They are determined by agreement between the employer and the employee. Generally, the cost of labor in Ethiopia is low by African standard.

Labor disputes in Ethiopia are resolved through the application of the law, collective agreements, work rules, and employment contracts.

Data Source: Ethiopian Investment Guide 2014