Table of Contents

Madagascar

Table of Contents

Currency

Malagasy Ariary (MGA)

Payroll Frequency

Monthly

Employer Taxes

19%

About Madagascar

Located off the Southern Coast of Africa, Madagascar is the fourth biggest island in the world. Due to its geographic isolation, the island is famous for its distinct plants and wildlife found nowhere else on the planet. Madagascar is famous for its lemurs which have thrived in that location due to a lack of competition from other species. This varied flora and fauna face endangerment from human development and interaction, with almost 90% of its forested area already lost to agricultural practices that are native to the inhabitants. Forestry, agriculture, and fishing are the mainstay of Madagascar’s economy, which accounts for over one-fourth of the nation’s GDP and for employing about 80% of the entire population. Madagascar has also experienced political instability including a coup, disputed elections, and violent unrest. Madagascar has a population of 25 million with major ethnic groups including Malayo-Indonesian, Cotiers, Indian, French, Comoran, and Creole. Most Malagasy are multi-ethnic, reflecting the nation’s diversity. The primary languages of Madagascar include both French and Malagasy and the majority of its people are Christians, Muslims, or Indigenous religionists.

Employment Relationship

• Permanent Employment

A contract is considered to be for an indefinite period in the following cases: When the conditions for a fixed-term contract are not met When neither party indicates an intention to terminate the employment relationship under the fixed-term agreement or the test contract The contract of day laborers working for the same employer and in the same position on an intermittent basis for 6 consecutive months, for an average of 20 working days per month. A contract of indefinite duration can be terminated at the will of 1 of the parties by giving prior notice.

• Fixed-Term or Specific-Purpose Contracts

A fixed-term employment contract in Madagascar may not exceed 2 years. A fixed-term contract of at least 6 months that has been renewed twice becomes an employment contract of an indefinite period. If the contract is interrupted for less than a month and reinstated, it is considered to be renewed. The law prohibits hiring fixed-term contract workers for tasks of a permanent nature.  A fixed-term employment contract can be terminated prematurely by the will of one of the parties in the circumstances specified in the contract and in cases of gross negligence.

• Temporary Employment Contratcs

The Labor Code of Madagascar defines temporary employment as a form of work performed by an employee hired to temporarily replace a staff member during the latter’s absence of not more than 1 year. Interim work performed by a staff member must not exceed 6 months. 

Probationary Period

A probationary period (or trial commitment contract) cannot exceed 6 months in duration and is renewable only once. Probationary periods can be included in both permanent and fixed-term contracts. The commitment or renewal of probationary appointment must be stipulated in writing, specifying at least the vacancy, duration, salary, and professional category.  The duration of the probationary period depends on the professional category. It can range from 3 months for skilled and unskilled blue-collar workers to 6 months for high-ranking executives.

Working Hours

Regular working hours for young workers in Madagascar are 8 hours per day and 40 hours per week. The working hours limit for all types of employees is 173.33 hours per month, and the annual limit for workers in the farming sector is 2,200 hours. Any work done in excess of these hours is considered overtime. 

Holidays / PTO

• Statutory Holidays

New Year (January 1), International Women’s Day (March 08), Easter Sunday and Easter Monday (dates may vary), Commemoration of the 1947 Rebellion (March 29), Labor Day (May 1), Ascension Day (date may vary), Pentecost/Whit and Monday of Pentecost/Whit (dates may vary), Independence Day (June 26), Assumption Day (date may vary), All Saints’ Day (November 1), Christmas Day (December 25).

• Paid Annual Leave

In Madagascar, employees are entitled to 2.5 days of paid annual leave per month after 12 months of service. It is compulsory to take 15 days' leave within the first 3 months after acquiring the right to leave. Employees have the right to accumulate annual leave for up to 3 years.  An employee is entitled to 1/12th of the annual wages before the commencement of annual leave. If an employment contract is terminated before utilizing all of the annual leave, compensation for unused leave is paid.

• Sick Leave

According to Madagascar's Labor Code, employees are entitled to sick leave for a maximum period of 6 months upon providing proof of illness from a certified doctor or medical professional. During this period, the employment contract may be suspended, but the employer cannot terminate it. After this period, the employer may terminate the employment contract but must pay all employees' rights, including the termination notice. During sick leave, employees are eligible to receive a "suspension indemnity," which is equal to the remuneration amount. 

• Maternity Leave

In Madagascar, female employees are entitled to 14 weeks of paid maternity leave, including 8 weeks of postnatal leave. In case of complications or sickness resulted from pregnancy or birth, the maternity leave can be further extended by 3 weeks (the employee must have a medical certificate attesting to her condition). The maternity leave is fully paid. The employee shall be reimbursed for the childbirth costs and, where appropriate, for medical care (within the limits of the health facilities' fees). If the female employee is insured, the costs are split equally between the National Social Insurance Fund and the employer. If the employee is not insured, the employer must cover the costs in full. An employee cannot be dismissed for taking maternity leave.  A prenatal allowance of MGA 63,000 (Malagasy ariary) is also paid to pregnant employees or spouses of insured employees. A maternity allowance of MGA 84,000 is paid to female employees in 2 installments. 

• Paternity Leave

Madagascar's Labor Code does not contain provisions on paternity leave. Employees are, however, entitled to 10 days of paid exceptional leave every year for family events. 

Termination of Employment

• Notice Period

An indefinite-term contract can be terminated by either party by providing prior notice (or without notice in the event of gross negligence). The dismissal notice length varies between 1 day and 6 months, depending on the employee’s length of service in that company and their professional category. The notice must be provided in writing. During the notice period, the worker is entitled to 1 day off per week. Any breach of contract where the notice period is not fully observed requires the party responsible for the breach to pay the other party compensation.

• Severance Benefits

In cases of economic redundancy, employers must pay affected employees a severance payment equal to 10 days’ wages for each year of service in the company, up to a total of 6 months’ wages. Employees and employers may agree on severance pay in other cases of termination. Such provisions must be indicated in the employment contract. Failure to pay severance or notice can result in a fine of up to MGA 2 million (Malagasy ariary).