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Jordan

399 EUR per employee per month

Discover everything you need to know about Jordan

Hire in Jordan at a glance

Here ares some key facts regarding hiring in Jordan

Capital
Amman
Currency
Jordanian Dinar
Language
Arabic
Population
10,203,134
GDP growth
1.97%
GDP world share
0.05%
Payroll frequency
Monthly
Working hours
48 hours/week

Overview in Jordan

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Jordan, situated in the Middle East and bordered by Syria, Iraq, Saudi Arabia, Israel, and the Palestinian West Bank, features diverse landscapes from the fertile Jordan Valley to the arid Eastern Desert and mountainous highlands. It has a rich history, including being part of the Ottoman Empire and under British Mandate before gaining independence in 1946. Today, it is a constitutional monarchy with King Abdullah II as the head of state.

The nation has a predominantly Arab population with a significant number of Palestinian refugees. Islam is the major religion. Classified as an upper-middle-income country, Jordan's economy is driven by services, industry, and tourism, with key industries including phosphate mining and pharmaceuticals. Despite its role as a regional mediator, Jordan faces challenges like unemployment, water scarcity, and regional conflict impacts.

The workforce, characterized by a low labor participation rate and high youth unemployment, is predominantly employed in the service sector. Industry and agriculture employ fewer people, often migrant workers. The workforce faces issues such as skill mismatches, a large informal sector, and pressures from a substantial refugee population.

Cultural aspects of work in Jordan include the importance of family, indirect communication styles, and a hierarchical structure. "Wasta" (connections) plays a crucial role in career advancement. The service sector, particularly tourism and finance, dominates the economy, while emerging sectors like renewable energy and creative industries show growth potential.

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Employer of Record in Jordan

Rivermate is a global Employer of Record company that helps you hire employees in Jordan without the need to set up a legal entity. We act as the Employer of Record for your employees in Jordan, taking care of all the legal and compliance aspects of employment, so you can focus on growing your business.

How does it work?

When you hire employees in Jordan through Rivermate, we become the legal employer of your staff. This means that we take on all the responsibilities of an employer, while you retain the day-to-day management of your employees.

You as the company maintain the direct relationshiop with the employee, you allocate them the work and manage their performance.
Rivermate takes care of the local payrolling of the employee, the contracts, HR, benefits and compliance.

Responsibilities of an Employer of Record

As an Employer of Record in Jordan, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Jordan

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In Jordan, employers have multiple tax obligations including contributing 14.25% of an employee's gross salary to the Social Security program, which offers retirement, disability, and survivor benefits, along with coverage for work-related injuries. Employers must also withhold progressive income tax ranging from 5% to 30% based on the employee's income, and report and pay this tax usually on a monthly basis. Additionally, a 1% National Contribution Tax is applicable for individuals earning over JOD 200,000 annually.

Other taxes that may affect employers include property taxes and stamp duties, depending on the business type and industry. It's important to note that tax laws can change, and consulting with a Jordanian tax professional or referring to the latest regulations is recommended for compliance.

Employees themselves contribute 7.5% of their gross salary to the Social Security fund. Specific professions such as medicine and law may have additional withholding taxes. Jordan also imposes a Value-Added Tax (VAT) at a standard rate of 16%, with certain services being zero-rated or exempt, and a requirement for businesses exceeding JOD 31,250 in annual revenue to register for VAT.

Furthermore, Jordan offers tax incentives to attract businesses, including exemptions from income and social service taxes in Free Zones and Development Zones, typically for 10 years, along with reductions for businesses in the industrial sector and other specific industries. Businesses are advised to consult with tax advisors or the Jordan Investment Commission to understand applicable incentives and ensure compliance.

Leave in Jordan

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In Jordan, the Labor Law ensures that employees receive 14 days of paid annual leave per year, increasing to 21 days after five years with the same employer. Unused leave can be carried over, but not beyond two years. If employment is terminated, employees are compensated for unused leave. Agreements forfeiting leave rights are invalid.

Jordan observes national holidays such as New Year's Day, Labor Day, Independence Day, Army Day, King Abdullah II's Accession to the Throne, and Christmas Day. Religious holidays include Eid al-Fitr, Eid al-Adha, Islamic New Year, and Prophet Muhammad's Birthday, with dates varying annually based on the lunar calendar.

Additional leave types include 14 days of paid sick leave, 10 weeks of maternity leave, three days of paternity leave, and other specific leaves like pilgrimage leave after five years of service. The government may adjust holiday observances, and it's advised to check official announcements for accurate dates.

Benefits in Jordan

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In Jordan, employee benefits are regulated by law, with mandatory provisions including social security contributions, paid leave, and severance pay. Employers and employees contribute a total of 21.75% towards the social security pension scheme, which offers retirement, disability, and survivor benefits. Employees are entitled to at least 14 days of paid annual leave, public holiday leave, paid sick leave, and maternity leave, with some provision for paternity leave.

Additional optional benefits provided by some companies include transportation allowances, flexible work arrangements, professional development opportunities, and life and disability insurance. These benefits help improve employee satisfaction and competitiveness in the job market.

The public healthcare system is supported by government funding and mandatory social security contributions, providing free or subsidized services. Private health insurance is optional. Retirement security is primarily ensured through the Social Security System and optional employer-sponsored plans, which may include defined benefit or defined contribution plans.

Overall, Jordanian employers are required to offer a baseline of benefits but often extend beyond these to attract and retain talent, with variations depending on the company's industry, size, and budget.

Workers Rights in Jordan

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Jordan's labor law, as outlined in the Jordanian Labour Code (Law No. 8 of 1996), provides a comprehensive framework for employment practices, including termination, anti-discrimination measures, working conditions, and health and safety regulations.

Termination of Employment:

  • Lawful grounds for dismissal include mutual agreement, contract expiry, employee resignation, death, imprisonment, force majeure, and dismissal for cause (e.g., misconduct, incompetence).
  • Employers must give at least one month's written notice for termination, with compensation required for failure to do so. Employees must also adhere to notice periods based on their payment structure.

Severance Pay:

  • Severance is mandated, with one month's salary per year of service for indefinite contracts, and the remainder of wages for the term for fixed-term contracts.

Anti-Discrimination:

  • Discrimination on the basis of gender and disability is explicitly prohibited. However, comprehensive legislation covering other characteristics like race, religion, age, or sexual orientation is lacking.
  • Redress mechanisms include complaints to the Ministry of Labour, the National Centre for Human Rights, and civil courts.

Employer Responsibilities:

  • Employers are urged to create a discrimination-free workplace, provide diversity training, and establish clear grievance procedures.

Working Conditions:

  • The standard workweek is capped at 48 hours over six days, with a maximum of 8 hours per day.
  • Employees are entitled to rest breaks, a weekly rest day, and public holidays.

Health and Safety (H&S):

  • Employers must conduct risk assessments, develop safe work procedures, provide personal protective equipment, and offer health and safety training.
  • Employees have rights to a safe workplace, necessary information and training, and can refuse unsafe work.
  • The Occupational Safety and Health Department enforces H&S regulations through inspections and penalties.

Overall, Jordan's labor laws aim to protect employee rights, ensure safe working conditions, and provide mechanisms for addressing workplace issues, though gaps in anti-discrimination laws remain.

Agreements in Jordan

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In Jersey, employment contracts are governed by the Employment (Jersey) Law 2003, which mandates a written statement of employment terms to be provided to employees within four weeks of their start date. This statement includes essential details such as the names of the employer and employee, job description, pay, working hours, and other employment conditions.

Additional components of an employment contract may include a formal Contract of Employment, Employee Handbook, Offer Letter, and any Side Agreements or Addendums. These documents collectively define the broader contractual relationship, which may also include implied terms not explicitly stated.

Jersey recognizes various types of employment contracts, such as Permanent Contracts, which provide long-term job security, and Fixed-Term Contracts, which are suitable for temporary or seasonal roles. Employment agreements must clearly outline terms regarding pay, working hours, leave entitlements, termination notice periods, redundancy procedures, and disciplinary measures. They may also include clauses on confidentiality and restrictive covenants like non-compete and non-solicitation clauses, which must be reasonable in scope and duration to be enforceable.

The legal framework does not specifically regulate probationary periods, but common practice in Jersey ranges from three to six months, allowing both employers and employees to assess suitability. During probation, termination rules are more flexible, though certain conditions apply for extending the probationary period.

Confidentiality and non-compete clauses are critical for protecting business interests but must adhere to strict legal standards regarding reasonableness and enforceability to ensure they do not unduly restrict an employee's future employment opportunities. Employers are advised to seek legal counsel when drafting these clauses to comply with Jersey employment law.

Remote Work in Jordan

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  • Legislation and Remote Work in Jordan: Jordan lacks specific legislation for remote work, relying on Labour Law No. 12 of 2016 and the Civil Service Bylaw of 2020 to guide remote work practices.

  • Importance of Clear Contracts: Due to the absence of specific remote work regulations, it is essential for employment contracts to clearly define remote work arrangements, including work hours, expectations, and data security responsibilities.

  • Technological Needs: A strong internet connection is crucial for remote work in Jordan, despite regional disparities in connectivity. Employers should provide necessary technology and software to facilitate effective remote communication and collaboration.

  • Employer Considerations and Responsibilities: Employers need to ensure data protection through access controls, encryption, and reliable data backup solutions. Developing a formal remote work policy and providing training on remote work tools are recommended practices.

  • Work Arrangements and Employee Well-being: Employers should address potential challenges like work-life balance and feelings of isolation in remote work settings. Support programs for employee well-being are advised.

  • Part-time and Flexitime Work: The Labour Law recognizes part-time work and outlines minimum wage requirements, but does not specify benefits compared to full-time roles. Flexitime arrangements are possible with employer approval, though not explicitly regulated.

  • Job Sharing: Not directly addressed in Jordanian labor law, job sharing can be established through employment contracts, with reimbursement policies similar to those for part-time work.

  • Data Protection and Privacy: The Data Protection Law No. 35 of 2017 and Labour Law No. 12 of 2016 emphasize the importance of data protection and fair treatment. Employment contracts should specifically address data security responsibilities, and employers must implement measures to protect data privacy.

  • Best Practices for Secure Remote Work: Employers should encourage the use of separate devices for work and personal use, secure communication channels, and establish clear procedures for reporting data breaches to ensure a secure remote work environment.

Working Hours in Jordan

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Jordan's labor law sets a standard working week at 48 hours across six days, with a daily maximum of 8 hours, extendable to 11 hours under certain conditions. For specific sectors like hotels and restaurants, the weekly limit can increase to 54 hours. Overtime is permissible with employee consent, compensated at a minimum rate of 125% for regular overtime and 150% for rest days or holidays. The law caps annual overtime at 30 days and daily overtime hours at 10.

Employees are entitled to a one-hour break after four consecutive hours of work, and Friday is the standard weekly rest day, although exceptions are allowed with ministerial approval. Night shifts, defined as work between 8:00 pm and 6:00 am, do not attract special pay unless stipulated by the employer, while safety measures must be maintained. Working on weekends and specifically on the designated rest day incurs a minimum overtime pay of 150%.

Salary in Jordan

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  • Salary Variations by Industry: In Jordan, industries like pharmaceuticals, IT, and finance typically offer higher salaries compared to sectors such as hospitality, education, or construction.

  • Influence of Experience and Qualifications: Higher salaries are often commanded by professionals with extensive experience and specialized qualifications.

  • Impact of Location: Salaries are generally higher in Amman due to its higher cost of living and the presence of multinational companies and specialized industries.

  • Cost of Living Considerations: Salaries in Jordan are influenced by the cost of living, including housing, transportation, and food costs. The government has set a minimum wage to ensure a basic standard of living.

  • Minimum Wage Details: The standard minimum wage is JOD 260 per month. Exceptions include lower wages for migrant workers in Qualified Industrial Zones and no specific minimum wage for domestic workers, although wage discrimination is prohibited.

  • Employee Benefits: Mandatory benefits in Jordan include social security contributions, paid leave, and health insurance. Employers may also offer bonuses and allowances such as performance-based bonuses, holiday bonuses, and allowances for transportation, housing, meals, and education.

  • Payroll Cycle Overview: The payroll process involves collecting timekeeping information, calculating gross and net pay, making deductions, distributing payments, and keeping records. Payroll frequency can vary, affecting employee satisfaction and retention.

Termination in Jordan

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The Employment (Jersey) Law 2003 sets out the minimum notice periods required for both employers and employees in Jersey during employment termination. Employers must provide a notice ranging from one week for less than two years of service to a maximum of 12 weeks for 12 years of service. Employees must give notice from one week for less than 26 weeks of service to four weeks for five years or more. Notice must be in writing unless delivered in the presence of a witness, and the termination date should be within 14 to 60 days of the notice.

In Jordan, the Jordanian Labour Law (Law No. 8 of 1996) governs employment termination and severance pay. Severance, calculated as one month's salary per year of service, applies in cases like employer-initiated termination (except for gross misconduct) and resignation under specific conditions. Exceptions include gross misconduct and resignation without valid reasons. Employment termination can be ordinary (with at least one month's notice) or extraordinary (without notice in cases of serious misconduct). Fixed-term contracts automatically expire at the end of the term unless renewed.

Freelancing in Jordan

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In Jordan, the distinction between employees and independent contractors significantly affects employment rights, social security contributions, and tax obligations. Employees are under the employer's control, integrated into the company, and receive regular salaries with tax and social security deductions. In contrast, independent contractors have more autonomy, minimal company integration, and handle their own tax and social security payments.

Misclassification of workers can lead to legal consequences, including fines and back payments for benefits like minimum wage and social security. Independent contractors can choose business structures like sole proprietorships or commercial establishments, each with different liability and registration requirements.

Contract negotiation for freelancers involves setting clear fee structures, payment terms, and project scopes, ideally documented in a written contract in Arabic for enforceability. Building personal relationships is crucial in Jordanian business culture.

Freelancers commonly work in IT, creative industries, marketing, consulting, and professional services. They must manage their taxes and can voluntarily contribute to social security for future benefits. Protecting intellectual property (IP) is essential, with default ownership rights granted to freelancers, though specific rights can be transferred through contracts.

Tax obligations for freelancers include income tax on net profits and potential sales tax registration if turnover exceeds JOD 18,000. Consulting a tax advisor is recommended to ensure compliance and optimize tax benefits. Freelancers can also consider insurance options like health, income protection, and public liability insurance to mitigate risks associated with independent contracting.

Health & Safety in Jordan

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Overview of Occupational Safety and Health in Jordan

Jordan's occupational safety and health (OSH) framework is primarily governed by the Labor Law (No. 8 of 1996), which sets forth comprehensive standards for workplace safety and health. The Ministry of Labor (MoL), through its Occupational Safety and Health Directorate, plays a pivotal role in enforcing these regulations, supported by the Social Security Corporation (SSC) which handles compensation claims for work-related injuries and illnesses.

Employer Responsibilities and Worker Rights

Employers in Jordan are tasked with numerous responsibilities to ensure a safe working environment. These include providing personal protective equipment, conducting risk assessments, educating employees about hazards, and maintaining first aid facilities. Workers, on the other hand, have rights to a safe workplace, access to safety information, and participation in safety committees, along with obligations to adhere to safety protocols and report hazards.

Regulatory and Inspection Framework

The MoL is the key entity responsible for workplace inspections, which are conducted without prior notice and focus on various safety aspects like machinery, chemical hazards, and emergency preparedness. The frequency and procedures of these inspections are designed to adapt to different industry needs and risk levels.

Challenges and Areas for Improvement

Despite a structured legal and regulatory framework, Jordan faces challenges such as limited enforcement resources, a significant informal sector, and general lack of awareness about OSH standards, especially in smaller enterprises. These issues underscore the need for enhanced training and stricter enforcement to improve workplace safety standards across the country.

Accident Reporting and Compensation

Employers must report serious accidents and fatalities to the MoL within 24 hours and all injuries to the SSC for compensation purposes. The SSC manages claims for various benefits related to work injuries, with specific processes in place for claim submission and evaluation. Disputes over compensation may be addressed in labor courts, ensuring legal recourse for workers.

Dispute Resolution in Jordan

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Jordan's labor dispute resolution involves specialized Labor Courts and voluntary Arbitration Panels. Labor Courts, structured into First Instance Courts and a Court of Appeal, handle disputes related to wages, working conditions, and unfair dismissals among others, starting with conciliation and potentially moving to trial if necessary. Arbitration Panels, chosen often through employment contracts, offer a less formal dispute resolution process, ending in a binding award.

Additionally, Jordan conducts compliance audits and inspections across various sectors to ensure adherence to laws and regulations, with entities like the Ministry of Labor and the Social Security Corporation playing significant roles. These inspections are crucial for maintaining fair labor practices and safe working conditions.

Whistleblower protections in Jordan are limited, with some safeguards against retaliation provided under specific laws like the Anti-Corruption Commission Law. Practical advice for whistleblowers includes reporting anonymously if possible and seeking legal counsel.

Jordan has ratified numerous International Labour Organization conventions, influencing its labor laws to include provisions like freedom of association and minimum wage requirements. Despite progress, challenges remain in areas such as child labor enforcement and gender discrimination in the workforce. The government continues to collaborate with the ILO to enhance compliance and enforcement of labor standards.

Cultural Considerations in Jordan

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Understanding communication and negotiation in Jordanian workplaces involves recognizing the importance of indirect communication, hierarchical structures, and the role of non-verbal cues. Jordanians prioritize relationship building and maintaining social harmony, often using indirect language to avoid confrontation. Formality is observed, especially towards superiors, with a strong emphasis on titles and respectful greetings. Non-verbal communication, such as eye contact and body language, plays a crucial role in conveying respect and building trust.

Negotiations in Jordan are relationship-oriented, with a focus on building long-term partnerships. Indirect communication and haggling are expected, and negotiations may involve multiple rounds, requiring patience and persistence. It's important to prepare thoroughly, focus on mutual benefits, and be ready to make concessions while paying attention to non-verbal cues.

Jordanian business culture is also characterized by a well-defined hierarchical structure where authority is centralized, and decisions flow from the top down. This structure impacts business functions, potentially slowing down decision-making but providing clarity and accountability. Cultural acceptance of hierarchical authority and a preference for clear rules are highlighted by Hofstede's cultural dimensions.

Additionally, understanding Jordan's statutory holidays and regional observances, such as Eid al-Fitr, Eid al-Adha, and Independence Day, is essential for operating successfully. These holidays can significantly affect business operations, with various closures and reduced hours. Cultural considerations like Friday prayers and Ramadan also influence business practices, emphasizing the need for cultural sensitivity and adaptation in professional settings.

Frequently Asked Questions for Employer of Record services in Jordan

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Jordan?

When using an Employer of Record (EOR) like Rivermate in Jordan, the EOR takes on the responsibility of handling the filing and payment of employees' taxes and social insurance contributions. This includes ensuring compliance with Jordanian tax laws and social security regulations. The EOR will manage the calculation, withholding, and remittance of income taxes and social insurance contributions on behalf of the employees, ensuring that all statutory obligations are met accurately and on time. This service relieves the client company from the complexities of local tax and social insurance compliance, allowing them to focus on their core business activities.

What options are available for hiring a worker in Jordan?

In Jordan, employers have several options for hiring workers, each with its own set of legal and administrative requirements. Here are the primary methods:

  1. Direct Employment:

    • Local Hiring: Employers can directly hire Jordanian nationals by following the local labor laws, which include registering the employee with the Social Security Corporation, adhering to minimum wage laws, and ensuring compliance with working hours, leave entitlements, and other labor regulations.
    • Foreign Workers: Hiring foreign workers involves obtaining work permits and residency visas. The process can be complex and time-consuming, requiring proof that the position cannot be filled by a local worker.
  2. Contracting through Local Agencies:

    • Employers can engage local recruitment agencies to find suitable candidates. These agencies handle the initial screening and selection process, which can save time and resources for the employer.
  3. Freelancers and Independent Contractors:

    • Hiring freelancers or independent contractors is another option, particularly for short-term projects or specialized tasks. However, it is crucial to ensure that the relationship is genuinely that of an independent contractor to avoid misclassification issues.
  4. Employer of Record (EOR) Services:

    • Using an Employer of Record (EOR) like Rivermate can be highly advantageous for companies looking to hire in Jordan without establishing a legal entity in the country. An EOR handles all employment-related responsibilities, including payroll, tax compliance, benefits administration, and adherence to local labor laws. This allows the employer to focus on business operations while ensuring full compliance with Jordanian regulations.

Benefits of Using an Employer of Record in Jordan:

  • Compliance: An EOR ensures that all employment practices comply with Jordanian labor laws, reducing the risk of legal issues and penalties.
  • Cost-Effective: Setting up a legal entity in Jordan can be expensive and time-consuming. An EOR provides a cost-effective alternative by managing all employment-related functions.
  • Speed: An EOR can expedite the hiring process, allowing companies to onboard employees quickly and efficiently.
  • Local Expertise: EORs have in-depth knowledge of the local labor market and regulatory environment, providing valuable insights and support.
  • Focus on Core Business: By outsourcing HR and administrative tasks to an EOR, companies can concentrate on their core business activities and strategic goals.

In summary, while there are multiple options for hiring workers in Jordan, using an Employer of Record like Rivermate offers significant advantages in terms of compliance, cost savings, efficiency, and local expertise.

What is the timeline for setting up a company in Jordan?

Setting up a company in Jordan involves several steps and can take a variable amount of time depending on the complexity of the business and the efficiency of the processes. Here is a general timeline for setting up a company in Jordan:

  1. Name Reservation (1-2 days):

    • The first step is to reserve a company name with the Companies Control Department (CCD) at the Ministry of Industry, Trade, and Supply. This typically takes 1-2 days.
  2. Preparation of Documents (1-2 weeks):

    • Prepare the necessary documents, including the Articles of Association, Memorandum of Association, and other required forms. This can take 1-2 weeks depending on the availability of the founders and legal advisors.
  3. Submission and Initial Approval (1-2 weeks):

    • Submit the prepared documents to the CCD for initial approval. This process usually takes 1-2 weeks.
  4. Capital Deposit (1-2 days):

    • Deposit the required capital in a local bank and obtain a certificate of deposit. This step typically takes 1-2 days.
  5. Final Registration and Issuance of Registration Certificate (1-2 weeks):

    • Submit the capital deposit certificate and other required documents to the CCD for final registration. The CCD will then issue the company registration certificate, which usually takes 1-2 weeks.
  6. Tax Registration (1-2 weeks):

    • Register for tax purposes with the Income and Sales Tax Department. This process generally takes 1-2 weeks.
  7. Social Security Registration (1 week):

    • Register the company with the Social Security Corporation. This step typically takes about 1 week.
  8. Municipal License (1-2 weeks):

    • Obtain a municipal license from the local municipality where the business will operate. This process usually takes 1-2 weeks.
  9. Additional Licenses and Permits (Variable):

    • Depending on the nature of the business, additional licenses and permits may be required, which can add additional time to the process.

In total, the process of setting up a company in Jordan can take approximately 6-10 weeks, assuming there are no significant delays or complications. Using an Employer of Record (EOR) service like Rivermate can significantly streamline this process, as they handle many of the administrative and compliance-related tasks, allowing businesses to focus on their core operations.

Is it possible to hire independent contractors in Jordan?

Yes, it is possible to hire independent contractors in Jordan. However, there are several important considerations to keep in mind to ensure compliance with local laws and regulations.

  1. Legal Framework: Independent contractors in Jordan are governed by the Jordanian Civil Code rather than the Labor Law. This means that the relationship between the contractor and the hiring entity is based on a commercial contract rather than an employment contract.

  2. Contractual Agreement: It is crucial to have a well-drafted contract that clearly outlines the scope of work, payment terms, duration, and other relevant conditions. This contract should specify that the individual is an independent contractor and not an employee to avoid any misclassification issues.

  3. Taxation: Independent contractors are responsible for their own tax filings and social security contributions. The hiring entity is not required to withhold income tax or make social security contributions on behalf of the contractor. However, it is advisable to ensure that the contractor is compliant with their tax obligations to avoid any potential liabilities.

  4. Intellectual Property: The contract should address the ownership of any intellectual property created during the engagement. Typically, it is advisable to include clauses that assign ownership of any work product to the hiring entity.

  5. Compliance Risks: Misclassification of employees as independent contractors can lead to legal and financial repercussions. If an independent contractor is found to be functioning as an employee, the hiring entity may be liable for unpaid taxes, social security contributions, and other employee benefits.

  6. Dispute Resolution: The contract should include a dispute resolution mechanism, such as arbitration or mediation, to handle any conflicts that may arise during the course of the engagement.

Using an Employer of Record (EOR) service like Rivermate can help mitigate these risks by ensuring that all legal and regulatory requirements are met. An EOR can handle the complexities of local compliance, payroll, and tax obligations, allowing you to focus on your core business activities. This is particularly beneficial if you are hiring multiple contractors or expanding your operations in Jordan.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Jordan?

When a company uses an Employer of Record (EOR) service like Rivermate in Jordan, the legal responsibilities are significantly streamlined, but there are still important aspects to consider. Here are the key legal responsibilities and benefits:

  1. Compliance with Local Labor Laws: The EOR ensures that all employment practices comply with Jordanian labor laws, including contracts, working hours, minimum wage, and termination procedures. This reduces the risk of legal issues arising from non-compliance.

  2. Employment Contracts: The EOR is responsible for drafting and maintaining employment contracts that meet local legal requirements. These contracts must include terms and conditions that adhere to Jordanian labor regulations.

  3. Payroll and Taxation: The EOR handles payroll processing, ensuring that employees are paid accurately and on time. They also manage the calculation and remittance of all required taxes and social security contributions to the Jordanian authorities.

  4. Employee Benefits: The EOR provides statutory benefits as required by Jordanian law, such as health insurance, social security, and any other mandated benefits. They also ensure that any additional benefits offered by the company are administered correctly.

  5. Work Permits and Visas: For foreign employees, the EOR manages the process of obtaining work permits and visas, ensuring compliance with Jordanian immigration laws.

  6. Termination and Severance: The EOR handles the termination process in accordance with Jordanian labor laws, including the calculation and payment of any severance or end-of-service benefits that may be due.

  7. Record Keeping: The EOR maintains all necessary employment records as required by Jordanian law, ensuring that documentation is accurate and readily available for any audits or inspections.

  8. Dispute Resolution: In the event of an employment dispute, the EOR provides support and ensures that the company complies with local dispute resolution procedures, potentially reducing the risk of litigation.

By using an EOR like Rivermate in Jordan, companies can focus on their core business activities while ensuring that all employment-related legal responsibilities are managed effectively and in compliance with local laws. This not only mitigates legal risks but also simplifies the complexities of international employment.

What are the costs associated with employing someone in Jordan?

Employing someone in Jordan involves several costs that employers need to consider. These costs can be broadly categorized into direct compensation, statutory benefits, and administrative expenses. Here is a detailed breakdown:

  1. Direct Compensation:

    • Salaries and Wages: The primary cost is the employee's salary. Jordan has a minimum wage, which as of 2023 is set at 260 Jordanian Dinars (JOD) per month. However, actual salaries can be significantly higher depending on the industry, role, and experience of the employee.
    • Bonuses and Incentives: Many employers offer performance-based bonuses and other incentives, which can vary widely.
  2. Statutory Benefits:

    • Social Security Contributions: Employers are required to contribute to the Social Security Corporation (SSC). The employer's contribution rate is 14.25% of the employee's gross salary, while the employee contributes 7.5%.
    • Health Insurance: While not mandatory, many employers provide health insurance as part of the benefits package. The cost of health insurance can vary depending on the coverage and the insurance provider.
    • End-of-Service Gratuity: For employees not covered by the SSC, employers must pay an end-of-service gratuity. This is typically calculated as one month's salary for each year of service.
    • Paid Leave: Employers must provide paid annual leave, which is 14 days per year for employees with less than five years of service and 21 days for those with more than five years. Additionally, there are public holidays and sick leave entitlements.
  3. Administrative Expenses:

    • Recruitment Costs: These include advertising the job, recruitment agency fees, and the time spent by HR personnel in the hiring process.
    • Training and Development: Employers often invest in training and development to enhance the skills of their employees. This can include the cost of training programs, materials, and any associated travel expenses.
    • Work Permits and Visas: For foreign employees, employers must obtain work permits and visas, which involve additional costs and administrative procedures.
    • Compliance and Legal Costs: Ensuring compliance with local labor laws and regulations may require legal consultation and periodic audits, adding to the overall cost.
  4. Other Benefits:

    • Transportation Allowance: Some employers provide transportation allowances or company vehicles, especially if the workplace is not easily accessible.
    • Housing Allowance: In some cases, particularly for expatriates, employers may offer a housing allowance or provide accommodation.

Using an Employer of Record (EOR) like Rivermate can help manage these costs more efficiently. An EOR handles payroll, benefits administration, compliance with local labor laws, and other HR functions, allowing businesses to focus on their core operations while ensuring that all employment-related expenses are managed effectively and in compliance with Jordanian regulations.

What is HR compliance in Jordan, and why is it important?

HR compliance in Jordan refers to the adherence to the country's labor laws, regulations, and standards that govern employment practices. This includes ensuring that all employment contracts, workplace policies, and HR practices align with the Jordanian Labor Law, social security regulations, and other relevant legal requirements. Key aspects of HR compliance in Jordan include:

  1. Employment Contracts: Ensuring that all employment contracts are in writing and include essential details such as job description, salary, working hours, and duration of employment. Contracts must comply with the Jordanian Labor Law.

  2. Working Hours and Overtime: Adhering to the legal working hours, which are typically 48 hours per week, and ensuring proper compensation for overtime work as stipulated by law.

  3. Minimum Wage: Complying with the national minimum wage requirements, which are periodically reviewed and adjusted by the government.

  4. Leave Entitlements: Providing employees with the legally mandated leave entitlements, including annual leave, sick leave, maternity leave, and public holidays.

  5. Social Security Contributions: Ensuring that both employers and employees make the required contributions to the Social Security Corporation, which covers pensions, health insurance, and other social benefits.

  6. Health and Safety: Implementing workplace health and safety standards to protect employees from occupational hazards and ensuring a safe working environment.

  7. Termination and Severance: Following the legal procedures for terminating employment, including providing notice periods and severance pay as required by law.

  8. Non-Discrimination and Equal Opportunity: Ensuring that employment practices do not discriminate based on gender, religion, ethnicity, or other protected characteristics, and promoting equal opportunity in the workplace.

HR compliance is important in Jordan for several reasons:

  1. Legal Protection: Compliance with labor laws protects the organization from legal disputes, penalties, and fines that can arise from non-compliance. It ensures that the company operates within the legal framework and avoids costly litigation.

  2. Employee Rights: Ensuring compliance helps protect the rights and welfare of employees, fostering a fair and respectful work environment. This can lead to higher employee satisfaction and retention.

  3. Reputation: Companies that adhere to HR compliance standards are viewed more favorably by employees, customers, and the public. A good reputation can enhance the company's brand and attract top talent.

  4. Operational Efficiency: Clear and compliant HR policies and procedures contribute to smoother operations and reduce the risk of misunderstandings and conflicts in the workplace.

  5. Risk Management: By staying compliant, companies can better manage risks related to employment practices, such as wrongful termination claims, workplace accidents, and discrimination lawsuits.

  6. Global Standards: For multinational companies, maintaining HR compliance in Jordan ensures alignment with global standards and practices, facilitating smoother international operations and consistency across different regions.

Using an Employer of Record (EOR) like Rivermate can significantly simplify HR compliance in Jordan. An EOR takes on the responsibility of ensuring that all employment practices adhere to local laws and regulations, reducing the administrative burden on the company and mitigating compliance risks. This allows businesses to focus on their core operations while ensuring that they remain compliant with Jordanian labor laws.

Do employees receive all their rights and benefits when employed through an Employer of Record in Jordan?

Yes, employees in Jordan receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with local labor laws and regulations, which is crucial in a country like Jordan where employment laws are specific and detailed.

Here are the key benefits and rights that employees receive when employed through an EOR in Jordan:

  1. Legal Compliance: An EOR ensures that all employment contracts are compliant with Jordanian labor laws. This includes adhering to regulations regarding working hours, overtime, and termination procedures.

  2. Social Security and Health Insurance: Employees are enrolled in the Jordanian social security system, which provides benefits such as pensions, disability insurance, and health insurance. The EOR manages these contributions on behalf of the employer.

  3. Paid Leave: Employees are entitled to annual leave, sick leave, and maternity/paternity leave as per Jordanian labor laws. An EOR ensures that these entitlements are correctly calculated and granted.

  4. Minimum Wage Compliance: The EOR ensures that employees are paid at least the minimum wage as stipulated by Jordanian law, which helps in maintaining fair labor standards.

  5. End-of-Service Benefits: In Jordan, employees are entitled to end-of-service benefits, which are calculated based on the duration of employment. An EOR manages these calculations and ensures that employees receive their due benefits upon termination of employment.

  6. Workplace Safety: An EOR ensures that the workplace complies with local health and safety regulations, providing a safe working environment for employees.

  7. Dispute Resolution: In case of any employment disputes, an EOR can provide support and ensure that the resolution process adheres to local laws, protecting the rights of the employee.

By using an EOR like Rivermate, companies can ensure that their employees in Jordan receive all the rights and benefits they are entitled to under local law, while also simplifying the complexities of international employment compliance.

How does Rivermate, as an Employer of Record in Jordan, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Jordan, ensures HR compliance through several key strategies and practices tailored to the specific legal and regulatory environment of the country. Hereโ€™s how Rivermate achieves this:

  1. Local Expertise and Knowledge: Rivermate employs local HR and legal experts who are well-versed in Jordanian labor laws and regulations. This local expertise ensures that all employment practices are compliant with the latest legal requirements, including those related to contracts, wages, benefits, and termination procedures.

  2. Employment Contracts: Rivermate ensures that all employment contracts are drafted in accordance with Jordanian labor laws. This includes specifying terms of employment, job roles, compensation, working hours, and other essential details. These contracts are designed to protect both the employer and the employee, reducing the risk of legal disputes.

  3. Payroll Management: Rivermate handles payroll processing in compliance with Jordanian regulations. This includes accurate calculation of salaries, deductions, taxes, and social security contributions. By managing payroll, Rivermate ensures timely and correct payments, which helps in maintaining employee satisfaction and avoiding legal penalties.

  4. Tax Compliance: Rivermate ensures that all tax obligations are met, including income tax, social security contributions, and any other statutory deductions required by Jordanian law. They stay updated with any changes in tax legislation to ensure ongoing compliance.

  5. Benefits Administration: Rivermate manages employee benefits in accordance with local laws, including health insurance, retirement plans, and other statutory benefits. They ensure that all mandatory benefits are provided and that any additional benefits offered by the employer are administered correctly.

  6. Labor Law Adherence: Rivermate ensures adherence to Jordanian labor laws regarding working hours, overtime, leave entitlements (such as annual leave, sick leave, and maternity leave), and workplace safety regulations. They monitor changes in labor laws and update policies and practices accordingly.

  7. Employee Relations and Dispute Resolution: Rivermate provides support in managing employee relations and resolving disputes. They ensure that any disciplinary actions or terminations are conducted in compliance with Jordanian labor laws, thereby minimizing the risk of wrongful termination claims or other legal issues.

  8. Regulatory Reporting: Rivermate handles all necessary regulatory reporting to Jordanian authorities. This includes submitting required documentation and reports related to employment, taxes, and social security, ensuring that all filings are accurate and timely.

  9. Continuous Monitoring and Auditing: Rivermate conducts regular audits and compliance checks to ensure ongoing adherence to local laws and regulations. This proactive approach helps identify and address any potential compliance issues before they become problematic.

By leveraging these strategies, Rivermate as an Employer of Record in Jordan provides a comprehensive solution for HR compliance, allowing businesses to focus on their core operations while ensuring that all employment-related legal requirements are met.

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