Table of Contents

Iraq

Table of Contents

Currency

Iraqi Dinar (IQD)

Payroll Frequency

Monthly

Employer Taxes

12%

About Iraq

Iraq is a country in the Middle East, neighboring the Persian Gulf between Iran and Kuwait. Although known more recently as a battlefield for rival forces since the United States ousted President Saddam Hussein in the year 2003, Iraq’s history led to it being named the cradle of civilization. It is believed that the oldest human civilizations began in this region, since the 6th century B.C., including ones that led to literacy and the establishment of the rule of law for organized governance. After an extended rule under the Ottoman Empire, modern Iraq was created by Britain in the early 20th century. Nowadays, Iraq’s economic growth relies on oil exports, which provides about 85% of the country’s revenue. As a result of its conflict-ridden recent history, Iraq continues to face various challenges such as social stability, a lack of security, an unstable political system, massive corruption, insufficient essential services, and a shortage of skilled labors. With a population of 39.2 million, Iraq’s major ethnic groups include Arab and Kurdish, with Islam as the predominant religion, with mixed Sunni and Shia followers.

Employment Relationship

• Permanent Employment

Iraq's Labor Law does not provide an explicit definition of permanent employment. It states that a fixed-term employment contract cannot be used for permanent employment. The employment contract of permanent employees must be for an undetermined time. If a fixed-term employment agreement is renewed more than once, it is considered a permanent employment contract.

• Fixed-Term or Specific-Purpose Contracts

According to Iraq's Labor Law, fixed-term employment contracts can be used for specific work or services expected to be complete within a maximum period of 1 year. The law guarantees employees with fixed-term employment contracts the same rights as permanent employees. If a fixed-term employment agreement is renewed more than once, it is considered a permanent employment contract.

• Temporary Employment Contratcs

Iraq's Labor Law defines temporary work as any work which by its nature requires completion in a determined time. The law also defines casual work as that required by unforeseen circumstances, not included in the normal activities of the employer, and the performance of which does not require more than 6 months. The Labour Law allows hiring contractors to do specific jobs. If the main employer subcontracts any of their jobs or part of them to another employer, the subcontractor must provide equal rights to their employees and employees of the main employer, and both must be jointly liable in this respect. 

Probationary Period

Per Iraq's Labor Law, an employment contract must include a probationary period if the employee does not have a professional certificate that proves their skill in the assigned work. The probationary period's duration is to be decided by mutual agreement between the parties, but it may not exceed a maximum duration of 3 months. An employee cannot be subjected to more than 1 probationary period with the same employer. If it appears to the employer that the employee is not capable of performing the assigned work, the employer may terminate the contract within the probationary period, provided that the employee is given notice at least 7 days before the termination date.

Working Hours

Iraq's Labor Law defines working hours as the time during which the employee is at the disposal of the employer engaging them, excluding meal periods. The law stipulates that normal working hours cannot exceed eight daily or 48 weekly, subject to some exceptions. For work performed over 2 shifts and intermittent work, the employee must not be present at the workplace for more than 10 hours, provided the number of actual working hours does not exceed eight per day. Working hours may not exceed 7 hours per shift for night work or 7.5 hours for mixed-schedule work. Working hours for employees under 16 cannot exceed 7 hours per day. In exceptional cases, employees and employer associations may agree to increase the daily working hours for a specified period, provided the average number of weekly working hours does not exceed 48 hours. The number of working hours per day shall be reduced for work that is arduous or harmful to health. Whether work is of such a nature and the maximum number of working hours shall be determined by the Minister's instructions upon the National Center for Occupational Health and Safety's proposals.

Holidays / PTO

• Statutory Holidays

New Year’s Day (January 1), Army Day (January 6), Spring Eid (March 21), International Labor Day (May 1), Eid Al Fitr (date may vary), Revolution of 1958 (July 14), Eid-al Adha (date may vary), Islamic New Year (date may vary), Ashura (date may vary), Prophet’s Birthday (date may vary)

• Paid Annual Leave

Iraq's Labor Law guarantees a fully paid annual leave of 21 days to employees after at least one year of service with the same employer. Employees performing work that is arduous or harmful to health are entitled to at least 30 days of paid leave for each year of work. Leave is increased according to the number of years of service with the same employer. An employee shall be entitled to proportional leave in relation to any fraction of a year of work. The days during which an employee is not working for reasons beyond their control, such as illness, injury, accident, or maternity, are included within the service period. Employees are entitled to receive a wage for the entire period of leave corresponding to not less than the wages they received during the last six months of service. However, transportation, food, and risk allowances are excluded from this amount. The employee's wages for the leave period must be paid to them before they take the leave.

• Sick Leave

Iraq's Labor Law entitles employees to 30 days of annual sick leave paid by the employer. Employees can accumulate up to 180 days of sick leave. Insured employees who remain sick after exhausting all their paid sick leave can apply to the state for benefits. The Pension and Social Security Fund will reimburse the employer for wages paid by the latter to the insured employee during any period of sick leave exceeding 30 days per year. The sick leave shall be granted on the basis of a medical report drawn up by a physician and approved by the employer or an official medical authority. The period of sick leave shall count as service to the employer. 

• Maternity Leave

Iraq's Labor Law entitles pregnant employees to a fully paid maternity leave of at least 14 weeks, which can start eight weeks before their expected due date by providing a medical certificate issued by a competent medical authority. The pregnant employee is entitled to take the remaining days of the leave after the delivery, provided that the period of this leave after the delivery is not less than six weeks. Maternity benefits are provided by the Ministry of Labor and Social Affairs and amount to 100% of an insured worker's earnings provided in addition to a lump sum maternity grant of one month for each year of contributions. A competent medical authority may extend the leave for up to nine months in the case of a difficult childbirth, the birth of more than one child, or in the event of pre or post-natal complications. At the end of her maternity leave, the working mother must be able to go back to the same position or to be employed in a similar position with the same wage.

• Paternity Leave

Iraq's Labor Law does not provide for employees' paternity leave.

Termination of Employment

• Notice Period

According to Iraq's Labor Law, the employer must generally give notice before terminating an employee's employment contract. The duration of the notice period is 30 days. If the employer does not provide notice, they will be liable to pay 30 days' compensation to the employee. If it appears to the employer that the employee is not capable of performing the assigned work during a probationary period, the employer may terminate the contract within the probation period, provided the employer provides the employee with notice sent at least 7 days before the date of termination.

• Severance Benefits

Iraq's Labor Law generally mandates the provision of severance benefits to employees whose contract has been terminated. The amount of severance pay owed is equal to two weeks' wages for every year of the employee's service. The severance package is not paid if the contract is terminated for the following reasons: If the employee is imprisoned for more than a year by a court judgment If the employee commits a serious violation of the essential obligations under the contract If it is proved during probation that the employee is not sufficiently qualified for the job.