Uganda PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Uganda to companies willing to get into the Uganda market or hire local/expat candidates in this country.

A frequent approach requires establishing a subsidiary in Uganda.  However, our offer allows you to start the operations in Uganda within days hence save time and money.  WeHG would hire candidates on your behalf while you preserve 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.

Uganda fast facts

Population, million: 42
Land area: 241,038 km²
Capital: Kampala
Local currency: Ugandan shilling (UGX)

GDP per capita:$ 2,566
GDP in currency:$ 102.659 billion

Uganda, country in east-central Africa. About the size of Great Britain, Uganda is populated by dozens of ethnic groups. The English language and Christianity help unite these diverse peoples, who come together in the cosmopolitan capital of Kampala, a verdant city whose plan includes dozens of small parks and public gardens and a scenic promenade along the shore of Lake Victoria, Africa’s largest freshwater lake. The Swahili language unites the country with its East African neighbours Kenya and Tanzania.

Hiring, Negotiating and Doing Business in Uganda

Necessity of written employment contract

Under the new Employment Laws, a contract of employment doesn’t have to be in writing, it can either be written or oral.

This means for one to enforce his/her rights as an employee, in the absence of a written contract, then all they have to do is to provide proof of such employment e.g proof of salary payments, etc, NSSF payment receipts, even photographs and videos of staff, seminars and training can work.

Different forms of engagement: employment, contracting, work with private entrepreneur

There are different classes and categories of work permits and visas as below:

• CLASS A WORK VISA  – GOVERNMENT & DIPLOMATIC SERVICE

For applicants who are contracted by the Government of Uganda or for diplomats appointed for service in Uganda.

• CLASS A2 WORK VISA – GOVERNMENT CONTRACTORS

For applicants who are appointed on government contracts including persons serving in Government tertiary institutions.

• CLASS B WORK VISA – INVESTMENT IN AGRICULTURE

For applicants who are investing into the agricultural industry.

• CLASS C WORK VISA – MINING

For applicants who are intending to invest into the prospecting for minerals or mining in Uganda.

• CLASS D WORK VISA – BUSINESS AND TRADE

For applicants who intend to conduct business or trade in Uganda

• CLASS E WORK VISA – MANUFACTURERS

For applicants who intend establishing and investing in a manufacturing business in Uganda.

• CLASS F WORK VISA – PROFESSIONALS

For applicants who are members of prescribed professionals who will practice such profession in Uganda.

• CLASS G1 WORK VISAS – VOLUNTEERS, NGO WORKERS, MISSIONARIES

For applicants who intend to carry out work in the capacity of a volunteer NGO worker or missionary.

• CLASS G2 WORK VISAS –  EMPLOYEES

For applicants whose intention it is to work in Uganda as employees -please note this is applicable whether the employment is for financial gain or not.

Uganda Employment Contract

Types of employment agreements

The two basic types of employment contract are open-ended and fixed term contracts. Most of the employment contracts are open ended and employee is hired for an indefinite period of time. Employees are also hired for a definite time period under the fixed term contracts. These contracts mention a definite end date and the employment relation no longer exists after that date.

The other two types of employment contracts are individual employment contracts and collective bargaining contracts. An individual employment contract is signed between an employer and employee and both parties can agree to any conditions, however subject to certain restrictions like paying minimum wage, allowing workers to form unions, not hiring forced or child labor, etc.

Collective bargaining agreement is signed between an employer and a representative union at an enterprise or industrial sector. The agreement reached between employee representatives i.e. union officials and employer(s) is subject to a ratification vote by the employees.

Uganda working hours

According to the law, your normal working hours per day are 8 hours and these should not be more than 48 hours per week. By including the lunch and prayer time in hours of work, working hours should not be greater than 9 hours a day.

Overtime

When an employee works in excess of eight hours per day or forty eight hours per week without a written agreement, the employee should be remunerated at the minimum rate of one and a half times of the normal hourly rate if the overtime is on the normal working days, and at two times the hourly rate where the overtime is worked on gazetted public holidays.

Vacation leave in Uganda

A worker, working weekly for sixteen or more hours, is entitled to 21 working days paid annual leave at the rate of 7 days for each period of continuous 4 months of service on completion of 12 months of continuous service. The time to take annual leave has to be agreed between the parties.

Workers are entitled to  24 consecutive hours of rest per week. The weekly rest may be taken on customary rest day (Sunday) or as agreed between the two parties.

Uganda Maternity Leave

Female employees are entitled to 60 working days (eight and a half weeks) of fully paid maternity leave. The compulsory leave is four weeks after child birth or miscarriage. The worker must give a written notice of at least 7 day (or even shorter period under certain circumstances) prior to proceeding on maternity leave on a specific date and to return to work thereafter. Worker may also have to provide a certificate of her medical condition from a qualified medical practitioner or midwife, if required by the employer.

Maternity leave may be extended in case of sickness arising out of pregnancy or confinement, affecting either the mother or the baby, and making the mother’s return to work inadvisable, the right to return is available to the worker within eight weeks after the date of childbirth or miscarriage (thus adding 4 more weeks of maternity leave).

The maternity leave is granted with full pay. It includes at least four weeks after childbirth or miscarriage andmay be extended by 20 working days under special circumstances. The pay during leave period is financed by the employer.

Uganda Severance Laws

Termination of Contract in Uganda

The period of notice period depends with the length of contracts follows:

• Not less than 2weeks where employment is of more than 6months but less than 1year
• Not less than 1month where employment is of more than 12months but less than 5years
• Not less than 2months where employment is of 5 years but less than 10years
• Not less than 3months where employment is of more than 10years.

Dismissal in Uganda

• An employer is entitled to dismiss summarily, and the dismissal is justified, where the employee has, by his or her conduct fundamentally broken his or her obligations arising under the contract of service.
• The law not list those grounds
• The employer shall, before reaching a decision to dismiss an employee establish the offence was committed beyond any reasonable doubt and give the employee a fair opportunity to defend himself and to appeal against the dismissal.

Lay off/Redundancy law highlights in Uganda

• Employment Act 2006 does not specifically define lay off and redundancy and therefore seem to classify it as termination

Criteria for Layoff/Redundancy in Uganda.

• Since this form of separation is not defined by law, the Employer must follow the criteria set for termination which is existence of a fair ground to terminate the contract

Procedure for layoff redundancy/layoff Uganda

• There is no procedure defined in Law

Terminal/Severance Pay Uganda.

• An employee who has worked for at least 6 months is entitled to severance pay in case of Termination or unfair dismissal.
• The Law requires the employee and employer to negotiate severance pay.
• In the absence of such a negotiated agreement the determination may be done by a labour officer

Uganda Tax

The corporate tax rate under the Income Tax Act is 30% for resident companies and branches of foreign companies.

The rate for individuals ranges from 10% to 45% depending on their chargeable income.

The employee contributes 5% and the employer contributes 10%. However, the employer may choose to pay the complete 15%. The 5% deduction is made from the monthly salary of an employee.

Health Insurance Benefits in Uganda

An employee who has served at least one month of continuous service is entitled to sick leave.

• Duration.

Two months in any one calendar year one month on full pay and one month with no pay.

• Procedure for getting sick leave.

The employer may require a medical certificate from a qualified medical practitioner before granting sick leave or at the earliest opportunity but the sick must be supported a sick off certificate issued by a qualified medical doctor.

• Compensation during sick leave.

For the first month’s absence from work he or she is entitled to full wages and every other benefit for the first month and nil salary and benefits in the second month. If at the expiration of the first month the sickness of the employee still continues, the employer is entitled to terminate the contract of service on complying with all the terms of the contract of service.

Additional Benefits in Uganda

There are nine sorts of benefit according to ILO Convention 102 and they include:

• Medical care
• Old-age benefit
• Invalidity benefit
• Survivors’ benefit
• Sickness benefit
• Maternity benefit
• Employment injury benefit
• Unemployment benefit
• Family benefit

Not all benefits provided by ILO included into Uganda social policy. Employees of the private sector who contribute to the National Social Security Fund (NSSF) are entitled to five benefits, whichever comes first and they include:

• Age benefit
• Withdrawal benefit
• Invalidity benefit
• Emigration grant
• Survivor’s benefit
• Public servants are only entitled to Age or Survivor’s benefit.

General market practice benefits/additional allowances

Benefits of registering a company in Uganda:

• Obtain legal Identity/status
• Safeguard your business name by acquiring a trade name.
• Access opportunities like loans, tenders, financing etc.
• Business formalization creates more employment opportunities through business expansion.
• Enables registration for licenses e.g Investment, trading and taxation licenses.
• Better marketing and advertising opportunities for increased clientele
• Improved competitiveness in the regional market

Uganda Holidays

Workers are entitled to paid Festival (public and religious) holidays. Festival holidays are announced by Ugandan Government at the start of calendar year (usually 13 in number).

The public holidays are regulated under the Public Holidays Act, 1965. These are:

• New Year’s Day (January 01)
• NRM Day (January 26)
• Women’s Day (March 08)
• Good Friday (April 18)
• Easter Monday (April 21)
• Labor Day (May 01)
• Memorial Day (May 26)
• Martyrs’ Day (June 03)
• National Heroes Day (June 09)
• Eid al-Fitr (End of Ramadan)
• Eid al-Adhuha (Feast of Sacrifice)
• Christmas Day (December 25)
• Boxing Day (December 26).

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 overseas teams efficiently while minimizing cost and risk.