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Written Agreements

In Ethiopia, a written contract of employment is not mandatory. However, a written statement must be provided within 15 days of the start of employment and include the following information:

• The name and address of the employer
• The worker's name, age, address and work card number
• The type of employment and the place of work
• The rate of wages and the method of wage calculation
• The manner and frequency of payment
• The duration of the contract, if it is for a fixed term
• The signature of the contracting parties

If the employer provides a written statement containing the elements listed above within 15 days of the start of employment, and they are not wholly or partially objected to by the worker within 15 days of receipt, a contract of employment between the employee and the employer shall be deemed concluded.

Any restrictive covenants in the contract must be in writing, otherwise they will not be effective. Such provisions can restrict employee's entry into competitive business with their employer. The employer must be able to prove that these clauses are necessary for the protection of their legitimate interests and do not impede, in an inequitable manner, the economic future of the employee. They shall not be valid, in particular, unless they are limited as to time, place and business forbidden to the employee.

Oral Agreements

In Ethiopia, an employment contract is deemed formed when a person agrees directly or indirectly to work under the authority of an employer for wages or salary. A written contract of employment is not mandatory. However, a written statement must be provided within 15 days of the start of employment and include the following information:

• The name and address of the employer
• The name, age, address and work card number, if any, of the worker
• The type of employment and the place of work
• The rate of wages and the method of wage calculation
• The manner and frequency of payment
• The duration of the contract, if it is for a fixed term
• The signature of the contracting parties

If the employer provides a written statement containing the elements listed above within 15 days of the start of employment, and they are not wholly or partially objected to by the worker within 15 days of receipt, a contract of employment between the worker and the employer is deemed concluded.

Implied Agreements

Ethiopia's labor laws and civil code do not describe circumstances under which a contract can be implied. The best practice in the industry is use written employment agreements.

Ethiopian labor law defines "normal hours of work" as the time during which employees perform work or prepare themselves for work in accordance with the law, collective agreement, or work rules. The standard workweek shall not exceed 48 hours a week or 8 hours a day. Employees under the age of 18 must not be employed for more than 7 hours a day. Employees who work over 48 hours a week or 8 hours a day are eligible for overtime compensation. Overtime may not exceed 4 hours in a day and 12 hours a week.

Public holidays are celebrated according to the Ethiopian (Julian) Calendar. It consists of 12 months of 30 days each and a thirteenth month of 5 days (6 days in leap year). Persons who work on public holidays are entitled to receive 2.5 times the amount of their regular wages.

The following holidays are observed in Ethiopia:

• Ethiopian Christmas - January 7
• Epiphany - January 19 (January 20 on a leap year)
• Victory at Adwa Day - March 2
• Ethiopian Good Friday - date subject to change every year
• Ethiopian Easter - date subject to change every year
• Labor Day - May 1
• Patriot's Victory Day - May 5
• Eid al-Fitr - date subject to change every year
• Derg Downfall Day - May 28
• Eid al-Adha - date subject to change every year
• Ethiopian New Year - September 11 (September 12 on a leap year)
• Discovery of the True Cross - September 27 (September 28 on a leap year)
• Mawlid - date subject to change every year

According to the Labor Proclamation of Ethiopia, an employee can be hired for a probationary period to test his or her suitability for the job. This period is limited to 60 days, and an agreement for a probationary period must be made in writing. An employee may not be subject to a probationary period in the same job twice.

If, during the probationary period, an employee is found to be unsuitable for the job, the employer can terminate the employment contract without notice and without obligation to pay any severance pay or any additional compensation. An employee, in turn, may also terminate the employment agreement without notice. If an employee continues to work after the probationary period, it will be included in their employment period.

Notice Period

In Ethiopia, the notice of termination of an employment agreement must be in writing, specifying the reasons for the termination and the date on which it will take effect. The notice must also be handed to the employee in person. When this is not possible, it must appear on the notice board in the workplace for ten consecutive days.

The obligations of the parties arising from the contract of employment shall remain intact during the period of notice.

The notice period in Ethiopia depends on the length of service or the grounds for dismissal:

• 1 month in the case of an employee who has completed probation and has a period of service not exceeding 1 year
• 2 months in the case of an employee who has a period of service of 1-9 years
• 3 months in the case of an employee whose period of service is more than 9 years
• 2 months in the case of an employee whose probationary period is completed and the employment agreement is terminated due to reduction of workforce
• A period agreed upon by the parties for a contract of employment that is for a definite period or piece work

Severance Benefits

In Ethiopia, the Labor Proclamation provides for severance pay for an employee who has completed a probationary period.

Severance pay amount depends on the length of service and is payable at the following rates:

• 30 days' wages for the first year of service (pro rata for employees employed for less than 1 year)
• 10 days' wages for every additional year of service after the first year, up to 12 months wages
• 60 days' wages are paid in addition to the above amounts to employees who are dismissed as a part of economic redundancy

Minimum Wage

There is no national minimum wage for private sector employers in Ethiopia. Minimum wages in the public sector are set at the national level, depending on the nature of the service and skill level of the employee. Public sector employees' monthly minimum wage is approximately ETB 420 (Ethiopian birr).

Ethiopia's 2019 Labor Proclamation provides for the formation of a Wage Board consisting of representatives from the government, employees, and trade unions, that will periodically determine and revise minimum wages.

Wages must be paid at such intervals as provided for by law, collective agreement, work rule, or contract of employment. Wages must be paid on working days and at the place of work.

Overtime, Holiday & Vacation Pay

Under the Labor Proclamation, overtime work may not exceed 4 hours in a day or 12 hours in a week. Employees who work overtime hours are entitled to an overtime premium as follows:

• 1.5 times the regular hourly rate for overtime work between 6:00 AM and 10:00 PM
• 1.75 times the regular hourly rate for overtime work between 10:00 PM and 6:00 AM
• 2 times the regular hourly rate for work on a weekly rest day
• 2.5 times the regular hourly rate for work on a public holiday

Persons who work on public holidays are entitled to receive twice the amount of their regular wages. Employees are entitled to their regular salary during periods of annual leave. If an employee is recalled from annual leave, the employer must pay the remainder of the leave. The employer is also responsible for the transport expenses incurred by the employee as direct consequences of the recall, as well as a per-diem.

Visas

• Diplomatic visa - issued to ambassadors, diplomatic agents, consular representatives, and their families who are assigned to work in foreign embassies or missions in Ethiopia
• Service visa - issued to permanent employees of foreign embassies, permanent missions, international civil servants, or persons holding service passports, and their family members
• Business visa - issued to persons who come to Ethiopia for business activities up to 122 days
• Immigrant visa - issued to foreign nationals who are adopted by or have valid marriages with Ethiopian citizens or family members of foreign nationals who have become permanent residents in Ethiopia
• Tourist visa - issued for single or multiple entries to foreign nationals who come to visit Ethiopia for leisure purposes
• Transit visa - issued to a foreign national who is traveling to another country via Ethiopia
• Student visa - issued to foreign nationals who come to Ethiopia for admission to an educational or training institution
• Religion Visa - issued to foreign nationals who come to take part in religious activities
• Medical Treatment Visa - issued to foreign nationals who enter to be treated for a medical condition in the country, valid for up to 1 year
• Sports Competition and Training Visa - issued to foreign nationals entering Ethiopia as athletes coming to the country to participate in sports events and/or training
• Entertainment Industry visa - issued to foreign nationals who are entering Ethiopia to work in the entertainment industry on film, television, or live productions as a performer, production, or support staff

Work Permits

Foreign nationals who wish to work in Ethiopia are required to obtain a work permit. It is issued for three years by the Ministry of Labor for a specific type of work and is renewed every year.

Getting a work permit requires an application from the hiring organization and a recommendation letter from relevant governmental bodies and agencies. Work permits are issued based on the type of work for the permit being requested and upon providing appropriate educational and experiential documents. The requirements vary based on the employing organization.