Guide to employment, payroll and benefits in

Cabo Verde

Rivermate offers complete payroll, benefits and compliance services for

Cabo Verde

01. Overview

Last updated: 

August 19, 2021

Currency
Cape Verde Escudo
Capital
Praia
Ease of doing business
55
Language
Portuguese
Population
555987
GDP growth
4.01%

02. Grow your team in

Cabo Verde

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Cabo Verde

, particularly if you don't have established local relationships. You can hire employees in

Cabo Verde

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Cape Verde, also known as Cabo Verde, is an archipelago and island nation in the central Atlantic Ocean, consisting of ten volcanic islands with a total land area of 4,033 square kilometers. These islands are located between 600 and 850 kilometers west of Cap-Vert, which is Africa's westernmost point. The Azores, Canary Islands, Madeira, and the Savage Isles are all part of the Macaronesia ecoregion, as are the Cape Verde islands. The islands of Cape Verde were uninhabited until Portuguese explorers discovered and colonized them in the 15th century, founding the first European settlement in the tropics. Cape Verde grew economically prosperous during the 16th and 17th centuries as a result of its strategic location in the Atlantic slave trade, attracting traders, privateers, and pirates. The suppression of the Atlantic slave trade caused it to decline economically in the 19th century, and many of its residents emigrated during that period. Cape Verde, on the other hand, steadily recovered economically by establishing itself as a major commercial hub and a convenient stopover point on major shipping routes. Cape Verde was incorporated as an overseas department of Portugal in 1951, but its residents continued to fight for independence, which they finally gained in 1975. Cape Verde has been a stable representative democracy since the early 1990s, and it has remained one of Africa's most prosperous and democratic countries. Due to a lack of natural resources, its economy is primarily service-oriented, with a increasing focus on tourism and foreign investment. Its 550,000 residents are mainly of mixed African and European ancestry and are primarily Roman Catholic, representing the legacy of Portuguese rule. There is a sizable Cape Verdean diaspora community around the world, especially in the United States and Portugal, which far outnumbers residents on the islands. Cape Verde is an African Union member country.

04. Public holidays

05. Types of leave

Paid time off

Employees are entitled to 22 days of compensated voluntary leave per year. If there was a formal arrangement between the employee and the boss about the allocation of accrued annual leave, this leave would be taken in the year it was granted.If an employee has an indefinite term, he or she must serve for at least six months before being considered for compensated regular leave. Employees on fixed-term contracts are liable for paid leave at the halfway point of their contract, which is equal to their duration of employment.

Public holidays

New Year’s DayDemocracy DayHeroes DayLabor DayYouth DayIndependence DayAssumption DayAll Saints’ DayChristmas Day

Sick days

Employees have up to 1,095 days of paid maternity time available to them. Employers pay you 100 percent for the first three days. Wage is paid to participating workers by Cape Verde's social security scheme beginning on the fourth day. A medical certificate is required if the disease lasts more than 30 days. Employees must have contributed for at least four months, plus 30 days in the three months preceding departure, to be considered.

Maternity leave

Cape Verdean female workers are entitled to 60 days of paid maternity leave. The employer spends the full fee if the employee is not compensated for social security insurance. Employees who have made at least four months of payments, plus 30 days in the three months prior to leave, are eligible for maternity coverage by social security.

Paternity leave

Only if the mother is unable to provide for the infant due to physical or emotional incapacity or if the mother dies within 120 days of the child's birth is a male employee entitled to paternity leave. The leave is for 60 days, minus any time the mother has already taken, but no fewer than 30 days if the mother dies.

Parental leave

Other than the already mentioned terms for maternity and paternity leaves, there are no provisions in the Cabo Verde law regarding parental leave.

Other leave

06. Employment termination

Termination process

Employers may terminate an employment contract for cause, at the end of the contract term (if the contract is for a defined duration), by the employee, or by mutual consent between the employer and employee. Employers must have a legitimate basis for terminating an employee, which may include employee misbehavior or economic and market considerations.

Notice period

Employers must provide 40 days' notice prior to terminating an employee for cause related to the employee's behavior. The employee has five days to react. If the employer wishes to fire the employee, he or she must provide 30 days notice and explain the basis for the termination. If an employer fails to offer notice in a timely manner, he or she must compensate the employee in place of notice.


Employers must offer a ten-day notice of termination to an employee under a fixed-term contract. If the employer fails to provide notice and no alternative arrangement is established, the fixed-term contract is automatically extended for the same duration. Unless a collective bargaining agreement provides otherwise, employees terminated for reason or redundancy are entitled to a certain amount of severance pay. When an employment contract is terminated owing to the employee's retirement or mutual agreement between the employer and employee, no notice is required.


Employees must provide notice to their employers before to terminating an employment contract. The notice period is fifteen days and increases by fifteen days for each year of service, up to a maximum of two months.

Severance pay

In the event of a just cause dismissal, the Labour Code provides for severance pay equal to one month's pay for each year of service. Additionally, employees laid off as a result of collective redundancy are entitled to one month's pay for every year of service. A collective bargaining agreement may increase the amount of severance pay. Severance compensation for collective redundancy and just-cause dismissal has also been decreased from 30 days to 20 days per year of service as part of a 2016 Labour Code amendment.

Probation period

The duration of the trial period is determined by the type of contract and/or the job title and functions of the employees. In the case of a non-fixed-term employment contract, the trial period is typically two months, but may be extended to six months if the functions to be performed require technical complexity and responsibility and if the additional time is deemed necessary to evaluate the employee's ability to perform the job.

07. Working hours

General

In Cape Verde, the standard work week is 44 hours and is limited to eight hours per day. Employees are entitled to 24 hours of rest per week, which are typically Sundays but can be any day.


Upper management positions and certain highly qualified employees are exempt from the eight-hour daily limit. These employees, however, are entitled to premium pay ranging from 20% to 35% of the standard wage.


Employees between the ages of 16 and 18 work a minimum of 38 hours per week and a maximum of seven hours per day. Overtime is permitted only in the event of a force majeure and is limited to two hours per day or 30 hours per year. Workers under the age of 18 are not permitted to work between the hours of 8 p.m. and 7 a.m. unless their professional training requires it and is authorized by Cape Verde's Labor Department.


From 10 p.m. to 6 a.m., night work is performed. Employees who work nights earn an additional 25% of their base salary. Workers may be entitled to this higher rate of pay for night work even after transitioning to daytime work in some instances. Overtime hours worked at night are limited to seven per week.

Overtime

Overtime hours are limited to two per day or 160 per year. The annual limit is increased to 300 if the employee provides written consent. Overtime is compensated at a percentage of the basic salary if worked on a regular workday, or at 100% if worked on a rest day or a public holiday.

08. Minimum wage

General

Cabo Verde's Prime Minister announced an increase in the minimum wage to CVE 15,000 per month in early 2020. This regulatory amendment took effect in 2021.


Employers should compensate employees in the local currency unless otherwise agreed. If internal regulations or collective bargaining agreements (CBAs) establish a different method of compensation, it must be equal to or greater than the minimum wage requirements. When both currency and goods or services are used to compensate, non-cash compensation cannot be more valuable than cash compensation.

09. Employee benefits

General

Employers are not required to provide private health insurance when providing health coverage through the National Social Insurance Institute.

Cabo Verde's labor regulations do not specify required bonuses or additional benefits for employees. Employers may provide more through collective bargaining agreements or internal regulations.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Cabo Verde

to hire a team takes time, money, and effort. The labor law in

Cabo Verde

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Cabo Verde

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Cabo Verde

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Cabo Verde

via our Employer of Record / PEO solution.

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