Algeria PEO & Employer of Record

WeHG provides an International PEO and vglobal Employer of Record service in Algeria to companies willing to enter the Algeria market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Algeria.  However our Employer of Record solution gives you a chance to start the operations in Algeria within days hence save time and money.  WeHG would recruit candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. 

Algeria fast facts

Population, million: 43,851,044
Land area, sq. km: 2.382 million km²
Capital: Algiers
Local currency: Algerian dinar (DZD)

GDP per capita:$ 4575.00
GDP in currency:$ 140.00 billion
Economic growth percentage: 2.2%
Inflation rate (consumer prices): 3.5%
Volume of export: $ 8513 million
Import of goods and services: $32.34 million
Total population: 43,851,044
Population of working age (15-64): 59%

Destination Algeria, the country is located in Northern Africa, bordered by the Mediterranean Sea in north, Tunisia in northeast, Libya in east, Morocco in west, Western Sahara, Mauritania, and Mali in southwest, and by Niger in the southeast.

Algeria is now Africa’s largest country, covering an area of nearly 2.4 million km², compared, it is 4 times the size of France or slightly less than 3.5 times the size of the U.S. state of Texas. But the country is almost only populated in the small coastal region, because its southern part is covered by the Sahara, the largest subtropical hot desert.

Hiring, Negotiating and Doing Business in Algeria

Necessity of written employment contract

Two types of employment contracts are permitted in Algeria, limited (fixed) term contracts and unlimited term contracts. An unlimited term contract may be either in writing or verbal and a contract will be deemed to be concluded for an unlimited duration unless otherwise agreed by the parties in writing.

Algeria Employment Contract

Types of employment agreements

A limited or fixed term contract must expressly state the duration of the contract (and the justification for its duration) and is only permitted in the following circumstances:  

• When the employee is recruited for the performance of an agreement relating to the achievement of a project or services that are not ongoing  
• When the employee replaces a jobholder, who is temporarily absent and whose job is to be preserved by the employer  
• When the employee is to perform periodic and discontinuous work  
• When a supplementary load of work, or seasonal reasons make it necessary  
• Where the employment relates to fixed term work/activities or when such works or activities are temporary by nature

The Algerian Labour Law does not provide for a maximum duration for a fixed term contract. However, the courts have commonly held that more than one renewal of a fixed term contract will result in the contract being deemed to be for an unlimited term.  

As a general rule, the Algerian Labour Law sets out the minimum employment entitlements and standards. These can be exceeded to the employee’s benefit, by agreement between the parties, but  cannot be reduced or excluded to the employee’s disadvantage.

Algeria working hours

The working week typically runs from Sunday to Thursday and the maximum prescribed working hours for an employee is 40 hours per week (based on a five day week) and eight hours per day (exclusive of a one hour break). Friday is the statutory day of rest each week. 

Overtime

Employees may only be required to work overtime by their employer in exceptional circumstances, for example where it is crucial to ensure the completion of a piece of work or project. Overtime hours must not exceed 20% of the maximum working hours (i.e. eight hours per week) and an employee must not required to work more than a total of 12 hours per day. 

Where an employee is required to work additional hours, they are entitled to overtime pay, of a minimum of 150% of the normal hourly wage. If circumstances require the employee to work on their weekly day off, they must be granted another day off (in lieu) and 150% off their wage for the overtime period.  

Vacation leave in Algeria

The Algerian Labor Law provides employees a minimum entitlement to 30 calendar days’ paid annual leave. However, employees working in the Southern wilayas (provinces) are granted an additional ten calendar days’paid annual leave. An employee can also take a maximum of 30 calendar days’ paid leave to perform Hajj, once in their employment.  

Sick Leave

Employees are entitled to 15 days’ paid sick leave at half salary; and full salary from the 16th day of sickness onwards. Sick pay and the reimbursement of medical expenses are funded by the National Fund of Social Security, based on the mandatory social contributions paid by the employed and the employee (whether Algerian or foreign national). 

In addition, employees are entitled to three days’ paid leave in the event of the following family events: 

• Marriage of the employee 
• Birth of a child of the employee 
• Circumcision of a child of the employee 
• Marriage of one of the descendants of the employee 
• Death of the employee’s ascendant, descendant or blood relative to the first degree 
• Death of the spouse of the employee 

Algeria Maternity Leave

Pregnant women are entitled to maternity leave during the prenatal and postnatal periods. Social security protection offers benefits in kind to mothers on maternity leave. Benefits in kind include reimbursement of  the expenses linked to pregnancy and birth. Medical and pharmaceutical expenses are covered on the  basis of 100% of regulatory tariffs. Hospitalisation expenses for the mother and the child are  reimbursed on the same basis for a maximum period of eight days. 

In addition, mothers who must stop working because of pregnancy are entitled to a daily indemnity of 100% of the daily salary for their position (average of the actual salary), for a maximum of the  subsequent 14 weeks. The mother must stop working at least one week before confinement. 

To obtain these benefits and indemnities,a registered doctor or qualified medical auxiliaries must have assisted at the birth. During the first six months, employees are entitled if they have worked at least: 

• nine days or 60 hours during the three preceding months; or 
• 36 days or 240 hours during the 12 preceding months 

Algeria Severance Laws

Fixed term contracts terminate on expiry. Unlimited term employment contracts may only be terminated for ‘cause’ or redundancy. 

In order for an employee’s employment contract to be terminated for ‘cause’, there has to be serious misconduct and dismissal is only permitted once a disciplinary procedure has been carried out. Failure to carry out a disciplinary procedure will result in the dismissal being deemed to be ‘abusive’ and this will have consequences for the employer, who will be required to pay termination compensation. 

Under the Algerian Labor Law and Legislative Decree No. 94-09 dated 26 May 1994 (the Algerian Redundancy Law), an employer may terminate employment on redundancy grounds only if economic reasons justify such a measure and once all alternatives aimed at avoiding redundancy have been exhausted. A redundancy is subject to a mandatory procedure, decided after collective bargaining. 

The procedure requires the involvement of the local labour administration. Should there be a breach of the correct procedure, the termination of an employment contract on the grounds of redundancy shall be deemed to be ‘abusive’. The termination of employment for reasons other than those identified above, or where termination has taken place without the correct procedures having been followed, is deemed to be ‘abusive’, giving right to compensation of no less than six months’ salary (where reinstatement is not possible), as well as uncapped damages as determined by the court. 

Algeria Tax

Algerian tax residents are subject to income tax on their worldwide income. Individuals who are not tax residents in Algeria are subject to tax on their Algerian sourced income. 

The following individuals are considered to be tax resident in Algeria: 

• Individuals who are owners or beneficial owners of a home in Algeria 
• Individuals who are tenants in Algeria with a rental term of a continuous period of at least one year, whether by single or by successive agreements 
• Individuals who have their place of principal residence or the center of their main interests in Algeria 
• Individuals working in Algeria, regardless of whether they are paid 
• Agents of the Algerian government who serve at a mission in a foreign country and who are not subject in the foreign country to a personal tax on all of their income

The following are the progressive personal income tax rates in Algeria, which apply to employment income and to self-employment and business income of DZD30 million or more. 

0  / 120,000 – 0 

120,000 / 360,000 – 20 

360,000 / 1,440,000 = 30 

1,440,000  –  35 

All bonuses paid by the employer on a non-monthly basis are subject to a reduced rate of 10%

Social security contributions are based on gross compensation paid, including fringe benefits and bonuses. Some benefits paid on an exceptional basis can be exempt from social security contributions under certain circumstances. 

Employer contributions are paid and employee contributions are withheld monthly. The following are the rates of the social security contributions: 

• Employers: 25% 
• Employees: 9% 

Employers must make an additional 1% contribution for the funds for social action. 

Health Insurance Benefits in Algeria

Additional Benefits in Algeria

Sick pay offers benefits in kind and a daily cash benefit for employees. Benefits in kind include coverage of expenses such as: medical expenses, surgery, pharmaceutical, hospital, etc. These expenses are covered if a registered doctor has prescribed the treatment. The employee must send his/her medical file to the social security administration within three months of the first medical intervention. 

Reimbursement is normally limited to 80% of the regulatory tariffs. One hundred per cent is paid in certain cases. Sick employees are entitled to a daily indemnity when obliged to temporarily interrupt their employment. 

During the first six months, employees are entitled if they have worked at least: 

•  36 days or 240 hours during the 12 preceding months. 

After the first six months, employees are entitled if they have worked at least: 

• 36 days or 240 hours during the 12 preceding months; or 
• 108 days or 720 hours during the three preceding years. 

The compensation is equivalent to: 

• 50% of the daily salary for the employee’s position, between the first and 15th day following the interruption; 
• 100% from the 16th day; 
• 100% from the first day for long illnesses or in cases of hospitalisation. 

The daily indemnity cannot be: 

• less than eight times the net amount of the hourly minimum guaranteed salary; 
• greater than 1/30 of the monthly salary for the employee’s position. 

The social security administration must be informed of any illness that can give rise to a daily indemnity within two working days, not including the days determined for the leave entitlement. The employee or his representative must send in the sick note.

Algeria Holidays

• New Year’s Day
• Yennayer
• Labour Day
• Eid al-Fitr
• Independence Day of Algeria
• Eid al-Adha
• Islamic New Year
• Ashura
• Prophet’s Birthday

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your foreign teams efficiently while minimizing cost and risk.