Eritrea

Eritrea, located in the Horn of Africa, is bordered by Sudan, Ethiopia, Djibouti, and the Red Sea. Its diverse topography includes highlands, coastal lowlands, and the Dahlak Archipelago. The climate varies from temperate in the highlands to hot and arid in the lowlands. Eritrea's natural resources include potash, gold, zinc, copper, and salt, with potential oil and gas reserves offshore.

Historically, Eritrea was part of the Kingdom of Aksum and became an Italian colony in 1890. After World War II, it was federated with Ethiopia under UN mandate, leading to a 30-year struggle for independence, which was achieved de facto in 1991 and formally in 1993 under the leadership of President Isaias Afwerki. The country has since experienced border tensions with Ethiopia and Djibouti.

Eritrea's population of 3.6 million is ethnically diverse, with Tigrinya being the largest group. The economy is primarily agricultural, vulnerable to drought, and supplemented by a growing mining sector. Eritrea is a single-party state with significant human rights concerns and limited economic opportunities. The workforce is young but largely unskilled, with education focused more on primary levels and less on secondary or vocational training.

The majority of the workforce is engaged in subsistence farming, with services and mining as other employment sectors. Challenges include aligning workforce skills with economic needs, formalizing informal sectors, and leveraging the Eritrean diaspora for investment and skills transfer. Cultural norms emphasize indirect communication, respect for authority, and collectivist decision-making, which are important in workplace dynamics.

Key economic sectors include agriculture, mining, and services, with emerging opportunities in fishing, light manufacturing, and renewable energy. The government is working on modernizing agriculture and expanding the mining and service sectors to boost the economy and create jobs.

• Employer Tax Responsibilities in Eritrea: Employers in Eritrea are required to contribute 8% of an employee's gross salary to the social security system, which covers various benefits. They may also be subject to a Skills Development Tax, the rate of which can vary.

• Income Tax: Eritrea has a progressive income tax system for employee salaries, ranging from 2% to 48%, based on income levels.

• Additional Taxes:

  • Rehabilitation Tax: A 2% tax on monthly income for all residents, funding national development projects.
  • Municipal Tax: A 4% tax on employee salaries, paid by employers to local authorities.

• Future Tax Considerations: Eritrea might implement a VAT system and currently applies sales taxes on certain goods and services. Customs duties may also apply to imports and exports.

• Business Guidance: Businesses should consult with tax professionals or relevant authorities for updated information on tax implications and compliance. Eritrea offers tax incentives to attract foreign investment, particularly in manufacturing, export industries, and agriculture.

• Investment Promotion: The Eritrean Investment Proclamation includes provisions for tax benefits in selected sectors to encourage foreign investment.

• Information Accessibility: Comprehensive and current details on specific tax incentives can be difficult to find online, making direct consultation with local tax professionals or government bodies essential.

In Eritrea, the Labor Proclamation of 2001 outlines the regulations for vacation leave, granting employees 14 working days of annual paid vacation after one year of continuous service. Vacation leave accrues throughout the year but can only be taken after completing the first year, with the timing usually determined by the employer based on workplace needs. Employees receive their regular salary during vacation periods.

Eritrea also observes several fixed and variable date holidays, reflecting its rich cultural heritage. Fixed date holidays include New Year's Day, International Women's Day, Independence Day, Martyr's Day, and the Beginning of Armed Struggle. Variable date religious holidays celebrated by the Christian and Islamic communities include Orthodox Christmas, Epiphany, Mawlid an-Nabi, Eid al-Fitr, and Eid al-Adha.

Additionally, the Labor Proclamation provides for other types of leave such as sick leave, maternity leave, bereavement leave, and special circumstance leave. Sick leave entitlements include full pay for the first 60 days and half pay for the next 60 days, with longer durations possible under special circumstances. Maternity leave is 60 days with full pay, split before and after childbirth. Bereavement and special circumstance leave are also available, with specifics depending on employment agreements or workplace policies. National service, which includes military and civilian components, is mandatory for Eritreans.

• Paid Leave: Eritrean employees are entitled to at least 14 working days of annual leave after their first year, with additional days for longer service. Paid sick leave is granted based on medical certification, and maternity leave is typically set at 3 months.

• Other Mandatory Benefits: Employers may set a probationary period of up to 3 months, and overtime must be compensated at 150% of the normal wage. Breaks during work hours are required but not specifically timed.

• Optional Benefits: Some employers offer health insurance, social security contributions, and additional leave such as paternity leave. Financial benefits like housing allowances and performance bonuses, as well as flexible work arrangements, may also be available.

• Healthcare and Social Security: Health insurance is not legally required but is increasingly provided by larger companies or those in urban areas. The national social security system exists but participation is voluntary, with limited public information on benefits.

• Retirement Planning: With voluntary participation in the national social security system, many Eritreans rely on personal savings or family support for retirement. Some employers may offer private pension plans.

In Eritrea, employment termination and related legalities are governed by the Labour Proclamation of 2001. This includes lawful grounds for dismissal such as mutual agreement, contract completion, unsatisfactory performance, disciplinary reasons, redundancy, and illness or disability. Notice requirements vary based on the duration of employment, ranging from 7 to 30 days. Severance pay is mandated except in cases of serious misconduct, with amounts increasing based on years of service.

The legal framework also addresses anti-discrimination, emphasizing equality regardless of race, gender, religion, disability, and other factors. However, enforcement and redress mechanisms are weak, with limited judicial independence and societal pressures affecting the pursuit of justice.

Employer responsibilities include upholding anti-discrimination principles, ensuring fair employment practices, and maintaining a safe work environment. Specific obligations under the Labour Proclamation require employers to take necessary measures for workplace health and safety, comply with OSH standards, and provide training and equipment.

Employee rights include a safe workplace, the right to be informed about hazards, refuse unsafe work, and participate in OSH consultations. Enforcement of these regulations is primarily the responsibility of the Eritrean Ministry of Labor and Social Welfare, though challenges such as limited resources and lack of awareness persist.

Overall, while Eritrea has established legal frameworks for employment and workplace safety, issues with enforcement and discrimination remain significant concerns.

Eritrea's employment law, as outlined in the Labour Proclamation No. 118 of 2001, recognizes various types of employment agreements including Contracts of Employment, Apprenticeship Contracts, and Collective Agreements. Employment contracts can be for a definite period, indefinite period, specific projects, or intermittent work, and are recommended to be in written form in Tigrinya for clarity.

Key aspects of these contracts include:

• Remuneration and Benefits: Details of wages, bonuses, and benefits like health insurance and social security contributions should be clearly stated.
• Working Hours and Overtime: The standard workweek, daily hours, rest periods, and overtime regulations need to be defined.
• Leave Entitlements: Specifications for annual, sick, and other leaves should comply with Eritrean labor law minimums.
• Termination: Conditions for termination, notice periods, and severance pay must be outlined following legal standards.
• Dispute Resolution: Methods for resolving employment disputes, potentially involving labor courts, should be established.

The probationary period in Eritrea is capped at 90 days, during which certain employee rights differ, such as compensation for unjustified termination and notice requirements for termination by the employee.

Additionally, while not explicitly mandated by law, confidentiality and non-compete clauses are recommended to protect business interests, with the enforceability of non-compete clauses being potentially limited by Eritrean courts. Employers are advised to consult legal counsel when drafting these clauses to ensure compliance and effectiveness. Non-solicitation and invention assignment clauses are also viable alternatives to protect business relationships and intellectual property rights.

• Remote Work Laws: Eritrea lacks specific laws for remote work under its Labor Proclamation No. 31 of 1997, which only covers general employee rights and working conditions. Future regulations may be considered, but political uncertainties make this unpredictable.

• Technological Challenges: The country faces significant hurdles in adopting widespread remote work due to limited and heavily regulated internet access, high costs, and the need for improved digital literacy among the workforce.

• Employer Responsibilities: Employers in Eritrea should prepare for potential remote work by establishing effective communication channels, developing remote-specific performance evaluations, and implementing strong data security measures. They should also consider the well-being of remote employees by possibly offering flexible hours and ensuring a balance between work and personal life.

• Equipment and Expense Reimbursements: Current laws do not require employers to provide equipment or reimburse expenses for remote work, leaving these practices ambiguous without specific regulations.

• Employee Data Rights: Employees have rights concerning their personal data, including access, rectification, and erasure under certain conditions. Employers must protect this data through appropriate measures and maintain transparency about its usage.

• Data Security Best Practices: Both employers and employees should adhere to best practices like using strong passwords, encryption, secure remote access, regular data backups, and developing incident response plans to protect personal and company data.

Eritrea's labor laws, as outlined in the Labour Proclamation, set a standard workweek at a maximum of 48 hours, with a daily limit of 8 hours to promote employee well-being and balance. While there is no minimum wage, overtime work must be compensated at 125% of the regular wage, requiring employee consent. Employees are entitled to a minimum of 24 consecutive hours of rest weekly, although the law does not specify break durations. The legislation lacks specific provisions for night and weekend work, suggesting flexibility but also a potential need for negotiation on these matters. For the most accurate and current information, consulting the latest version of the Labour Proclamation or legal experts is recommended.

Determining a competitive salary in Eritrea involves considering various factors such as job title, education, industry, location, and company size. Despite the scarcity of comprehensive salary data, resources like online platforms, recruitment agencies, and industry associations can provide some insights. However, limitations such as small sample sizes and currency fluctuations must be acknowledged.

In the public sector, the minimum wage is set at 360 Nakfa per month, but this does not apply to the private sector, where wages are negotiated or determined through collective bargaining. Additional compensation in Eritrea may include performance-based bonuses, end-of-year bonuses, and allowances for overtime, transportation, housing, and meals, although the prevalence and extent of these benefits can vary.

Salary payments are typically made monthly, with some variations, and are increasingly transferred directly to bank accounts, although cash payments remain common in rural areas. Employees should review their contracts to understand specific payment terms and methods.

In Eritrea, the labor law mandates a tiered notice period for employment termination based on the employee's length of service, ranging from seven days for less than one year of service to thirty days for more than five years. Employers can opt to pay wages in lieu of notice. Severance pay is calculated based on the duration of employment, with increasing benefits for longer service, and is mandatory regardless of termination reason. Termination can be initiated by either the employer or the employee, with specific provisions for termination with or without cause, resignation, and constructive dismissal. All terminations must be documented in writing, stating the reasons and effective date, and severance pay must be provided when applicable. The governing legislation is the Labour Proclamation of Eritrea No. 118 of 2001.

In Eritrea, the distinction between employees and contractors is significant under labor law, affecting rights and obligations. Employees are under employer control, integrated into the business, economically dependent, and entitled to benefits like paid leave and social security. Contractors, however, maintain independence, offer specialized skills, handle their own taxes and expenses, and operate under formal contracts.

For contractors, it's essential to have well-structured contracts that detail work scope, compensation, terms, and confidentiality, and acknowledge the independent contractor status. Negotiation practices should consider market rates, scope of work, and secure payment terms, respecting Eritrean cultural values of respect and communication.

Independent contracting is common in IT, creative industries, and construction. Misclassification of workers as contractors can lead to significant penalties. Eritrea's adherence to the Berne Convention ensures copyright protection for creators, with contracts needing clear terms on IP rights and confidentiality.

Freelancers and contractors must manage tax obligations and might consider insurance options like health, professional liability, and life insurance for additional security. Legal and financial advice is recommended to navigate these aspects in compliance with Eritrean law.

Eritrea's health and safety regulations are primarily governed by the Labour Proclamation of 2001, which mandates employers to ensure the health, safety, and welfare of their employees. This includes providing safe working conditions, equipment, and necessary training. Employees have rights to participate in safety matters and refuse unsafe work. The Ministry of Labour and Human Welfare oversees policy development and enforcement, with penalties for non-compliance including fines and imprisonment.

Sector-specific regulations exist, such as those for pesticides and tobacco products, and are supplemented by other laws related to environmental and industrial safety. Despite these regulations, challenges like limited resources, enforcement capabilities, and low awareness hinder effective implementation, especially in the informal sector.

Eritrea collaborates with international bodies like the International Labor Organization to enhance its regulatory framework and align with global standards. The country also emphasizes emergency preparedness, injury prevention, and workplace inspections conducted by the Labour Inspection Service to ensure compliance with health and safety standards. Workers and employers are encouraged to actively participate in maintaining workplace safety, and there are provisions for compensation in case of workplace accidents.

Eritrea likely has a labor court system to handle employment disputes, though specific details about its structure and processes are scarce. The potential structure might include trial courts for initial disputes and appellate courts for appeals. Jurisdiction could cover individual disputes like wrongful dismissal and unpaid wages, and possibly collective disputes, though these might be less frequent due to restrictions on organized labor.

The hypothetical process for handling labor disputes might involve claim submission, conciliation, a formal hearing if conciliation fails, judgment, and limited appeal options. Typical cases could include claims for unfair dismissal, wage disputes, discrimination, and occupational safety issues.

Arbitration panels might exist according to Eritrea's labor laws, but their use as an alternative dispute resolution mechanism is not well-documented. The legal framework for arbitration, particularly in labor disputes, remains unclear, as does the accessibility of such options.

Eritrea is assumed to have a labor inspection system overseen by a government body like the Ministry of Labor, which conducts inspections and compliance audits. However, the frequency and effectiveness of these inspections are hard to determine due to limited information. Compliance audits are theoretically important for identifying labor law violations and ensuring fair working conditions.

Non-compliance by employers could lead to fines, corrective orders, or even business closure, but specific consequences are not well-defined due to the lack of accessible legal sources. The country faces severe limitations on information, with a tightly controlled government that suppresses dissent and lacks independent institutions for addressing human rights violations or corruption.

Whistleblowers in Eritrea face significant risks without specific legal protections, and reporting violations can lead to severe reprisals. Practical considerations for those reporting violations include meticulous documentation and secure communication, with extreme caution advised when contacting international human rights NGOs or embassies.

Eritrea's alignment with international labor standards is minimal, with only a few ILO conventions ratified and significant gaps in fundamental labor rights protections. Urgent improvements needed include ratifying additional ILO conventions, reviewing and updating labor laws, and implementing robust enforcement mechanisms to ensure worker protections. The ongoing concerns and criticisms from international bodies highlight the severe labor rights violations, including forced labor, prevalent in the country.

In Eritrea, professional communication is characterized by directness, formality, and a strong emphasis on non-verbal cues. Eritreans value direct communication, often being blunt and assertive, which can be perceived as rude by those unfamiliar with the culture. Formality is prevalent, especially in initial interactions and with superiors, where titles and respectful addressing are important. Non-verbal communication, such as body language, facial expressions, and the use of silence, plays a crucial role in conveying respect and understanding the underlying messages.

Eritrean business culture also emphasizes respect for elders and authority, indirect criticism to avoid offense, and the importance of building long-term relationships and trust in negotiations. Negotiation strategies involve clear, direct communication and may include lengthy processes with a focus on collective goals over individual achievements.

The hierarchical structure in Eritrean businesses influences decision-making, team dynamics, and leadership styles, often leading to a paternalistic approach. While this can provide stability, it may also hinder creativity and innovation. Some businesses, especially those led by younger individuals, are exploring more collaborative approaches.

Understanding Eritrea's cultural and business norms, including statutory and religious holidays, is essential for successful professional interactions and operations within the country.