Lebanon PEO & Employer of Record

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

Traditional approach requires establishing a subsidiary in Lebanon.  However our solution allows you to start the operations in Lebanon within days hence save time and money.  WeHG would hire 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. 

Lebanon fast facts

Population, million: 6,825,445
Land area: 10,452 km²
Capital: Beirut
Local currency: Lebanese pound (LBP)

GDP per capita:$ 5720.00
GDP in currency:$ 56.372 billion

Lebanon is a mountainous country in the Levant with a coastline on the eastern Mediterranean Sea; it borders Israel in the south and Syria in the north. The Anti-Lebanon mountain range forms long stretches of the border between Lebanon and Syria in the east. The country also shares maritime borders with Cyprus.

The primary instrument that governs employment in the private and mixed sectors in Lebanon is the Labour Law of 1946.

Other domestic sources include:

1. The Law on Regulating Foreigners’ Employment, enacted by Decree 17561/1964;
2. The Social Security Law, enacted by Decree 13955/1963;
3. the Collective Agreements, Mediation and Arbitration Law, enacted by Decree 17386/1964;
4. The Occupational Emergencies and Injuries Law, enacted by Decree-Law 136/1983;
5. The Occupational Health, Safety and Welfare Law, enacted by Decree 11802/2004;
6. The Code of Obligations and Contracts of 1932; and
7. The Penal Code enacted by Decree-Law 340/1943.

Hiring, Negotiating and Doing Business in Lebanon

Necessity of written employment contract

Employment contracts may be oral or written. Written contracts are more common, particularly for office jobs. 

The Labour Law is silent on the minimum terms to be included in the employment contract. In the absence of the inclusion of clauses which are more favourable to the employee in the contract, the minimum rights set by applicable laws – including maximum working hours and leave entitlement – are implied.

Lebanon Employment Contract

Types of employment agreements

Employment contracts may be either fixed term or indefinite in duration. Fixed-term contracts are executed for a specific period or for the performance of specific work. Such contracts are not subject to the severance pay and termination notice obligations detailed in question 5. Nonetheless, in case of renewal of a fixed-term contract, either by a renewal agreement or by continued execution of the contract, the employee shall be entitled to the same severance pay as would be payable under an indefinite-term contract as per Article 23 of Convention 1/1966 on Labour Standards.

Lebanon working hours

An employer may demand a maximum of 40 regular hours per week from his employees. Under special circumstances, employers are permitted to add extra hours to an employee’s regular shift, but this requires a permit from the Ministry of Labor.

Overtime

The daily maximum working hours may be increased to 12 hours in urgent cases, provided that:

1. the Ministry of Labour is notified within 24 hours of the matter and of the time needed to accomplish the work; and
2. the wage pertaining to overtime hours is equal to one and a half times the usual hourly wage.

Moreover, employees are entitled to weekly rest of not less than 36 continuous hours. The employer may determine the day of rest, as appropriate. The employee is entitled to compensation or time off in lieu for any rest days worked.

Vacation leave in Lebanon

An employee is entitled to 15 days’ annual leave on full pay after completing one year of employment. 

Lebanon Maternity Leave

• The Labour Law does not grant fathers paternity leave. A draft law providing for three days’ paternity leave was introduced and approved by the Council of Ministers in January 2018.

• A female employee is entitled to 10 weeks of paid maternity leave, subject to a medical certificate estimating the date of birth. The maternity leave can be taken by the pregnant employee before her expected due date. The employee is entitled to take the remaining days of the maternity leave after the delivery, provided that the aggregate period of maternity leave taken by the employee prior to and after the delivery does not exceed 10 weeks.

• Sick Leave. After the employee has been with his employer for more than three months, he is entitled to a half-month paid sick leave. If an employee’s sick leave exceeds the entitled annual amount, then the employer has the right to deduct the extra days from the employee’s annual leave.

• Bereavement leave. In addition to annual and sick leave, an employer is required to provide his employees with two days bereavement leave, to be used upon death of close family members, including grandparents.

Lebanon Severance Laws

Subject to the conditions set out in the Labour Law, the employer may terminate some or all employment agreements where required to do so due to force majeure or economic or technical circumstances.

Moreover, the employer may unilaterally terminate an employment contract without prior notice or severance pay in certain cases, including following:

• The employee fakes his or her nationality;
• The employer is dissatisfied with the employee’s performance during the three-month probation period;
• The employee is found to have committed a wilfully negligent act or omission aimed at harming the material interests of the employer, provided that the employer has notified the Ministry of Labour in writing of such violation within three days of its verification;
• The employee, despite written warnings, commits a serious violation of the employer’s internal regulations three times in a given year;
• The employee is absent without valid excuse for more than 15 days or more than seven consecutive days in a given year;
• The employee is sentenced to imprisonment for at least a year for committing a felony or has committed a misdemeanour in the workplace during the course of his or her work; or
• The employee assaults the employer or the manager in the workplace.

Otherwise, prior written notice of termination must be served. The employee may require clarification as to the reasons for termination.

Lebanon Tax

The law differentiates between daily employees, temporary employees and full time employees.
Temporary employees are taxed to a flat rate of three percent. They are not registered with the National Social Security Fund (NSSF) and are not entitled to neither national health coverage nor to the end-of-service indemnity.
Full time employees’ and daily employees’ salaries are taxed on a sliding scale from two percent to 20 percent.

Social security contributions are the following:

Borne by the employer: 8% for the maternity and sickness benefit schemes, on a maximum base of LBP 2.5 million (amounting to LBP 200,000 as a maximum per month), and 6% for the family benefit schemes, on a maximum base of LBP 1.5 million (amounting to LBP 90,000 as a maximum per month), in addition to 8.5% of total annual earnings for the end-of-service indemnity, with no ceiling.

Borne by the employee: 3% for the medical scheme, on a maximum base of LBP 2.5 million (amounting to LBP 75,000 as a maximum per month).

Salaries of foreign staff are normally subject to all contributions, except those for the end-of-service indemnity fund. However, foreign employees do not receive the family allowance benefits nor do they benefit from the medical reimbursements.

The Ministry of Labour legislated a Decision no. 224, dated 12 July 2017, giving the right for the insured whose mandatory membership in the National Social Security Fund is terminated due to retirement (age 60 to 64) or due to permanent disability to benefit from the sickness and maternity scheme in accordance with the terms and conditions of the insured workers.

Health Insurance Benefits in Lebanon

• End of service

The employee can ask for end-of-service benefits at any time even though the official retirement age in Lebanon is 64. At the age of 60, an employee can ask for early retirement and end-of-service compensation provided he has completed 20 years of service.

• Family, Transportation and Education Allowance

Employees are also entitled to family, transportation, and educational allowance. The benefits are attached to the husband’s rather than wives’ salaries.

A married employee registered with the NSSF receives a 20 percent spouse allowance and an additional 11 percent for every child (maximum five). The allowance is calculated as a percentage of the minimum wage, which is currently at LL300,000.

• NSSF health benefits:

Once an employee is registered, the NSSF covers the employee and his dependents in the following areas: maternity, sickness and work-related accidents.

The employee is liable of 10 percent of all hospitalization costs and 20 percent of medication and examination expenses.

• Compliance and the NSSF debate

The law requires all companies to contribute to the NSSF fund. Small companies with fewer than 10 employees have to submit their report every three months.

Larger enterprises must submit their report monthly.

The amount ranges from LL100,000 to LL1.5 million for each infringement, depending on the circumstances of the case.

There has been much discussion in Parliament to cancel all past obligations in order to encourage the private sector to re-invest. There have also been calls to reformat the fund and its management to better cope with spiraling costs and the ever-increasing demand for care.

Additional Benefits in Lebanon

The law does not regulate bonuses and fringe benefits.

Lebanon Holidays

• New Year’s Day
• Orthodox Christmas
• St. Maroun’s Day
• Rafik Hariri Memorial Day
• Good Friday
• Labor Day
• End of Ramadan
• Assumption of the Virgin Mary
• Feast of the Sacrifice
• Islamic New Year
• Independence Day
• The Prophet’s Birthday
• Christmas Day

Why Choose WeHireGlobally

WeHG takes care of all the onboarding difficulties, 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.