Employer of Record in Eritrea

An Employer of Record, or EOR, is a company that legally hires employees in Eritrea on your behalf. This lets you build a team in the country without needing to set up your own local company. The EOR takes care of all the official employment tasks. You manage your team's daily work, and the EOR handles the rest. For companies looking to hire in Eritrea, an EOR provider like Rivermate can simplify the entire process.

How an Employer of Record (EOR) Works in Eritrea

Using an EOR in Eritrea follows a straightforward process. The EOR acts as the legal employer, while you maintain control over your employee's work.

1. You Find the Candidate: You recruit and select the person you want to hire in Eritrea.
2. The EOR Hires Them: The EOR legally hires your chosen candidate under its local Eritrean business entity. It drafts a compliant employment contract that follows all local labor laws.
3. Onboarding Begins: The EOR manages the onboarding process, making sure all paperwork is correct.
4. Payroll and Benefits are Managed: The EOR handles all payroll, taxes, and benefits. It ensures your employee is paid correctly and on time, with the right deductions made for Eritrean authorities.
5. Compliance is Assured: The EOR stays up-to-date with Eritrea's labor laws so your employment arrangement is always compliant. This covers things like working hours, leave entitlements, and termination rules.
6. You Manage the Work: You direct your employee's day-to-day tasks and responsibilities, just like any other member of your team.

Why use an Employer of Record in Eritrea

Using an EOR makes hiring in Eritrea faster and safer. It removes the significant administrative and legal challenges of setting up your own entity in a new country. This allows you to focus on growing your business and managing your team, not on navigating complex local rules.

• Enter the Market Quickly: You can hire employees in days, not the months it might take to register a local company.
• Ensure Full Compliance: EORs are experts in Eritrean labor law. They manage all legal requirements, reducing the risk of fines or penalties from non-compliance.
• Reduce Administrative Work: The EOR handles all HR admin, including payroll processing, tax withholding, and managing benefits.
• Avoid Misclassification Risk: An EOR helps you correctly classify your workers, avoiding the legal and financial penalties associated with misclassifying an employee as a contractor.
• Offer Competitive Benefits: An EOR can help you provide a benefits package that meets local standards and expectations, making your offer more attractive to top talent.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Eritrea includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Eritrea.

Hiring in Eritrea has its own unique landscape. To hire compliant talent, you need to understand the local labor laws. This guide breaks down the key aspects of hiring in Eritrea, from employment contracts to public holidays.

Employment contracts & must-have clauses

It is best practice to have a written employment contract in Eritrea. The contract serves as the legal foundation for your relationship with your employee.

There are two main types of employment contracts in Eritrea:

• Indefinite-term contracts These are the standard type of employment agreement and do not have a specified end date.
• Fixed-term contracts These contracts are for a specific period or project.

Your employment contracts in Eritrea should include these essential clauses:

• Job title and description of duties
• Start date of employment
• Place of work
• Working hours
• Salary and other benefits
• Leave entitlements
• Termination conditions

Probation periods

In Eritrea, you can include a probationary period in an employment contract. This period allows both you and the employee to assess if the working relationship is a good fit. The maximum duration for a probationary period is 90 consecutive days. During this time, the contract can be terminated with a shorter notice period.

Working hours & overtime

The standard workweek in Eritrea is 40 hours, with an 8-hour workday over 5 days. Overtime is permitted but is compensated at a higher rate, typically 1.25 to 1.5 times the regular hourly wage.

Here is a breakdown of overtime pay rates:

Public & regional holidays

Employees in Eritrea are entitled to paid leave on public holidays. The nationally recognized public holidays include:

• New Year's Day
• Orthodox Christmas Day
• Timket (Orthodox Epiphany)
• Fenkil Day
• International Women's Day
• Eid al-Fitr
• Orthodox Easter Monday
• Labour Day
• Independence Day
• Eid al-Adha
• Martyrs' Day
• Revolution Day
• Milad un Nabi (Birth of the Prophet Muhammad)
• Christmas Day

Hiring contractors in Eritrea

You can hire independent contractors in Eritrea for specialized skills and short-term projects. This offers flexibility and can be a cost-effective way to access talent.

However, it is important to correctly classify your workers. Misclassifying an employee as an independent contractor can lead to penalties, including back taxes and social security contributions. The key distinction between an employee and a contractor is the level of control you have over their work.

An Employer of Record (EOR) can help you mitigate misclassification risk. An EOR acts as the legal employer for your workers in Eritrea, ensuring compliance with local labor laws. This includes handling employment contracts, payroll, taxes, and benefits. By using an EOR, you can hire talent in Eritrea without setting up a local entity.

Navigating compensation and payroll in a new country can feel complex. In Eritrea, the system has its own set of rules you need to know. Understanding these regulations helps you pay your team accurately and on time, while staying compliant with local laws. This guide breaks down the key aspects of payroll, from payment schedules and wages to taxes and overtime.

Payroll cycles & wage structure

In Eritrea, the standard payroll cycle is monthly. You will typically pay your employees once a month, often towards the end of the month. The most common and preferred payment method is a direct bank transfer to the employee's local bank account.

Beyond the basic salary, your employees' compensation packages can include various allowances. These can be benefits you choose to offer to attract and retain talent. Common allowances include:

• Housing Allowance: To help employees with accommodation costs.
• Transportation Allowance: To cover commuting expenses.
• Food Allowance: To assist with daily meal costs.

Overtime & minimums

The standard workweek in Eritrea is 48 hours, with a maximum of 8 hours per day, typically spread over six days. Any work done beyond these hours is considered overtime and must be paid at a higher rate. The overtime pay varies depending on when the work is performed:

• Daytime (6 a.m. to 10 p.m.): 1.25 times the regular hourly rate.
• Nighttime (10 p.m. to 6 a.m.): 1.5 times the regular hourly rate.
• Weekly Rest Day: 2 times the regular hourly rate.
• Public Holidays: 2.25 times the regular hourly rate.

It's important to note that Eritrea does not have a national minimum wage. Wages are generally determined through individual employment agreements.

Employer taxes and contributions

As an employer in Eritrea, you are responsible for contributing to the national social security scheme for your employees.

Employee taxes and deductions

You must withhold income tax and social security contributions from your employees' salaries. Eritrea uses a progressive tax system, meaning the tax rate increases with the employee's income.

In Eritrea, your employee benefits package and leave policies are guided by the country's labor laws. These laws set the minimum standards you must follow for things like time off and social security. Understanding these requirements is key to staying compliant and keeping your team happy. This guide breaks down what you need to know about statutory leave, holidays, and other common benefits in Eritrea.

Statutory leave

Eritrean law requires employers to provide several types of paid leave.

• Annual Leave: Employees are entitled to paid annual leave that increases with their years of service. After one year of continuous service, employees get 14 to 30 calendar days of paid leave.
• Sick Leave: Employees can take up to six months of sick leave. The first two months may be fully or partially paid, while the remaining four months are typically unpaid. You may require a medical certificate to approve sick leave.
• Maternity Leave: Female employees receive 60 consecutive days of paid maternity leave. This can be taken before and after childbirth.
• Paternity Leave: Male employees are entitled to three days of paid paternity leave after the birth of a child.

Public holidays & regional holidays

Employees in Eritrea are entitled to paid days off for public holidays. If an employee works on a public holiday, they are typically owed premium pay.

Typical supplemental benefits

Beyond the legally required benefits, many employers in Eritrea offer additional perks to attract and retain talent.

How an EOR can help with setting up benefits

Setting up a comprehensive and compliant benefits package in a new country can be complex. An Employer of Record (EOR) simplifies this process for you. An EOR acts as the legal employer for your team in Eritrea, which means they handle all the administrative and legal requirements related to employee benefits.

An EOR helps you:

• Ensure your benefits package complies with all of Eritrea's labor laws.
• Administer both mandatory and supplemental benefits.
• Manage contributions to the national social security fund.
• Stay updated on any changes to local employment regulations.

By partnering with an EOR, you can offer competitive benefits to your Eritrean employees without the headache of navigating local laws and bureaucracy. This allows you to focus on your core business operations.

When an employment relationship in Eritrea ends, you need to follow a specific process. Eritrean labor laws outline the steps for termination and offboarding to ensure fairness for both you and your employee. This involves providing proper notice, calculating severance pay, and completing all final paperwork correctly. Failing to follow these rules can lead to legal issues.

Notice periods

When you decide to terminate an employment contract in Eritrea, you must provide a minimum notice period. The length of this notice depends on how long the employee has worked for you.

It is possible to pay the employee their salary for the notice period instead of having them work.

Severance pay

In Eritrea, employees who have worked for at least one year are entitled to severance pay when their employment is terminated. The amount is based on their length of service:

• First five years: Two weeks' wages for each year of service.
• Five to ten years: Three weeks' wages for each year of service.
• More than ten years: Four weeks' wages for each year of service.

For an employee with less than one year of service, severance is calculated at the rate of two weeks' wages per year.

How Rivermate handles compliant exits

When you partner with an Employer of Record like Rivermate, we manage the entire offboarding process for you. We ensure that every termination is fully compliant with Eritrean labor law.

Here’s how we help:

• Legal Compliance: We handle all legal requirements, including notice periods and severance pay, to make sure everything is done by the book.
• Documentation: We prepare and manage all necessary termination paperwork.
• Final Payroll: We process the employee's final payment accurately and on time, including any outstanding salary, benefits, and severance.
• Clear Communication: We facilitate clear communication between you and the departing employee to ensure a smooth and professional exit.

Navigating work permits and visas in Eritrea requires a clear and direct approach. The process involves multiple government bodies, and understanding the practical realities is key. You need to know how to get your team on the ground legally, whether for a short business trip or a long-term assignment.

Employment visas & sponsorship realities

An Employer of Record (EOR) with a legal entity in Eritrea can be your sponsor for work visas. This is often the most direct path if you don't have your own registered business in the country. An EOR handles the sponsorship and ensures you comply with local labor laws.

Here’s what you need to know about the process:

• Sponsorship is mandatory. You cannot hire foreign employees as independent contractors for long-term work. They need a formal sponsor.
• Local labor market tests. The sponsoring entity often needs to show that a local Eritrean worker cannot fill the position.
• Employee qualifications matter. Your employee's educational background and work experience must be verified and align with the job requirements.
• Processing times vary. Expect the work permit process to take several weeks, so plan accordingly.

What an EOR can typically sponsor:

• Temporary Work Visas: For short-term projects and assignments.
• Long-Term Work Visas: For ongoing, indefinite roles. These can be valid for up to three years and are often renewable.
• Specialized Worker Visas: For employees with highly specialized skills.

Practical Routes

For most companies, using an EOR is the most practical route. It removes the need to establish a local entity, which can be a complex and time-consuming process. The EOR acts as the legal employer, handling all the necessary paperwork and compliance with the Ministry of Labor and Human Welfare.

Business travel compliance

For short-term visits, a business visa is required. This visa is for activities like attending meetings, negotiating contracts, or exploring business opportunities. It does not permit you to carry out productive work.

To stay compliant, follow these guidelines:

• Get an invitation letter. You will need a formal invitation from a company based in Eritrea. This letter should clearly state the purpose and duration of your visit.
• Have a valid passport. Your passport must be valid for at least six months beyond your planned departure date.
• Show proof of funds. You need to demonstrate that you can support yourself financially during your stay.
• Have a return ticket. A confirmed itinerary or round-trip ticket is a standard requirement.

Here is a simple breakdown of what a business visa allows you to do and what it does not:

Always apply for your business visa in advance through an Eritrean embassy or consulate in your country of residence. Do not assume you can handle business matters on a tourist visa.