Ethiopia flag Ethiopia: Operating a Business in Ethiopia

Work conditions in Ethiopia

The Active Population in Figures

201820192020
Labour Force 51,400,75053,021,34752,799,277

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 81.69%81.51%81.34%
Men activity rate 87.45%87.06%86.69%
Women activity rate 75.98%76.00%76.02%

Source: International Labour Organization, ILOSTAT database

 

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Working Conditions

Legal Weekly Duration
A regular working day counts 8 hours and a regular working week counts 48 hours. Where the circumstances in which the work has to be carried on are such that normal hours of work cannot be distributed evently over the individual week, normal working hours may be calculated as an average over a period longer than one week, provided, however, that the average number of hours over a period shall not exceed eight hours per day or 48 hours per week.
Retirement Age
Age 60 with at least 10 years of contributions.
Early pension: Age 55 with at least 25 years of contributions (civilian); aged 45 to 55 (depending on rank) with at least 10 years of contributions (military).
Working Contracts
A contract of employment shall be stipulated clearly and in such manner so that the parties are left with no uncertainity as to their respective rights and obligations under the terms thereof, it shall specify the type of employment and place of work, the rate of wages, method of calculation thereof, manner and interval of payment and duration of the contract.
Unless otherwise provided by law, a contract of employment shall not be subject to any special form.

Contracts of employment must be translated in Amharic.

Labour Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labour

Minimum Wage
ETB 420 per month for public employees (2017)
Average Wage
Generally, private sector monthly salaries for university graduates range from USD 150 to USD 200, while construction sector monthly wages range from USD 60 for daily laborers to USD 300 for a foreman (Source: Ethiopia’s Ministry of Urban Development and Construction).
Social Contributions
Social Security Contributions Paid By Employers: 11% (civilian) or 25% (military). The employer's contributions also finance work injury benefits. (7% contribution paid by the employee.)
Social Security Contributions Paid By Employees: 7%

Self-employed person: Up to 18% of declared income.

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Social Partners

Social Dialogue and Involvement of Social Partners
According to art. 42 of the Constitution, factory and service sector employees, peasants, agricultural workers, other rural workers, government employees below a certain level of responsibility and the nature of whose employment so requires, shall have the right to form associations for the purpose of improving their economic and employment conditions. This right shall include the right to form trade union and other associations, and to negotiate with their employers and other organizations affecting their interests. The same article also mentions explicitly the right of strike.
Unions
Confederation of Ethiopian Trade Unions (CETU)
Unionisation Rate
The trade unions of Ethiopia have a total membership of approximately 300,000. Over 203,000 are members of the Confederation of Ethiopian Trade Unions (CETU).
Labour Regulation Bodies
www.molsa.gov.et/

Find out more about Operating a Business in Ethiopia on GlobalTrade.net, the Directory for International Trade Service Providers.

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Latest Update: June 2022

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