Employer of Record in Libya

An Employer of Record, or EOR, is a company that legally hires employees on your behalf in Libya. This allows you to build a team in the country without setting up a local legal entity. The EOR takes care of all local HR tasks like payroll, taxes, benefits, and making sure you follow Libyan labor laws. This frees you up to focus on managing your team's daily work and growing your business. For EOR services in Libya, you can consider providers like Rivermate.

How an Employer of Record (EOR) Works in Libya

Using an EOR simplifies hiring in Libya. Here is how it usually works:

• You Find the Talent. You identify the person you want to hire in Libya.
• The EOR Hires Them. The EOR legally hires the employee for you under a local employment contract that follows Libyan law.
• Onboarding is Handled. The EOR manages all the paperwork to get your new team member set up correctly.
• Payroll and Taxes are Managed. The EOR processes payroll each month, making sure payments are on time and correct. They handle all tax deductions and social security contributions.
• You Manage the Work. You are in charge of your employee’s day to day tasks and responsibilities, just like any other team member.
• Compliance is Maintained. The EOR ensures that everything related to the employment relationship follows local laws and regulations.

Why use an Employer of Record in Libya

Using an EOR in Libya makes hiring employees and following local employment laws much simpler and more efficient. An EOR understands national business regulations and guides you through local laws. This helps you avoid legal issues and allows you to focus on your core business operations.

Here are some key benefits:

• Hire Without a Local Entity. You can hire employees in Libya without the cost and time of setting up a local company.
• Stay Compliant. An EOR ensures you follow all Libyan labor laws, including rules on contracts, benefits, and termination. This reduces the risk of fines or legal trouble.
• Simplify HR and Payroll. The EOR manages all payroll, tax, and benefits administration. This saves you time and removes the headache of managing complex local regulations.
• Access Local Expertise. EORs have in-depth knowledge of the local market. They can help you offer competitive benefits packages to attract and retain top talent.
• Reduce Risk. The EOR takes on the legal responsibility as the employer. This protects you from potential legal or financial penalties related to employment.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Libya 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 Libya.

Hiring in Libya means engaging with a market full of potential, especially in sectors like energy and construction. The workforce is rebuilding, and there are opportunities to find skilled talent. However, the local labor laws have specific requirements you need to know. For example, you must prioritize hiring Libyan nationals and can only hire foreign workers if you can prove a local candidate isn't available for the role. Navigating these rules is key to building a successful team.

Employment contracts & must-have clauses

When you hire an employee in Libya, you must provide a written employment contract in Arabic. This is a legal requirement. The contract can be for a fixed term or an indefinite period. A fixed-term contract can last up to two years and can be renewed once before it's considered indefinite.

Make sure every contract includes these key details:

• Your company and the employee's full details: Include legal names and addresses.
• Job specifics: A clear title and description of the role and responsibilities.
• Key dates: The start date and, for fixed-term contracts, the end date.
• Pay: Details on salary and how often the employee will be paid.
• Working hours: State the daily and weekly hours.
• Location: Where the employee will be based.
• Leave: Information on annual, sick, and other leave entitlements.
• Probation period: If you have one, you must state its length and conditions.
• Termination: Reference the legal steps for ending the contract.

Probation periods

You can include a probation period in the employment contract to see if a new hire is a good fit. In Libya, the probation period is typically 30 working days. If the employee continues working after this period without any notice, they are considered confirmed in the role. During probation, either you or the employee can end the contract with shorter notice than is required for a permanent employee.

Working hours & overtime

A standard workweek in Libya is 48 hours, spread over six days, with a maximum of 10 hours per day. Friday is the typical day of rest.

Here is a simple breakdown of the rules:

During the holy month of Ramadan, working hours are often reduced for Muslim employees.

Public & regional holidays

Your employees are entitled to paid leave on public holidays. Here are the expected public holidays in Libya for 2025. Keep in mind that dates for Islamic holidays are based on the lunar calendar and may vary.

• January 13: Amazigh New Year
• February 17: Revolution Day
• March 19: Commemoration of the Victory over Gaddafi
• March 30 & 31: Eid al-Fitr
• April 1: Eid al-Fitr Holiday
• May 1: Labour Day
• June 5: Arafat Day
• June 7, 8 & 9: Eid Al-Adha
• June 27: Hijri New Year
• September 5: Birthday of Prophet Muhammed
• September 16: Martyrs' Day
• October 23: Liberation Day
• December 24: Independence Day

Hiring contractors in Libya

You can hire independent contractors for specialized skills or short-term projects. This gives you flexibility without the commitments of a full-time employee. Contractors manage their own work, use their own tools, and handle their own taxes.

However, you need to be careful about worker classification. If a work relationship looks like employment, the authorities could classify your contractor as an employee. This is known as misclassification. It can happen if the contractor works exclusively for you or follows a fixed work schedule.

Misclassification creates serious risks, including:

• Fines and penalties.
• Back payments for social security contributions and taxes.
• Liability for employee benefits, like paid leave and severance.

An Employer of Record (EOR) helps you avoid these risks. An EOR legally employs workers on your behalf, ensuring they are classified correctly from the start. We handle all the local HR tasks, from compliant contracts to payroll and benefits. This lets you focus on your business goals without worrying about breaking local labor laws.

Navigating compensation and payroll in Libya requires understanding a few key rules. The system is straightforward, but you need to know the local regulations to stay compliant. Generally, you pay employees monthly. Their total compensation includes a base salary plus any allowances for things like housing or transportation. You must also account for specific taxes and social security contributions for both your company and your employees.

Payroll cycles & wage structure

The payroll cycle in Libya is typically monthly. You should pay your employees once a month, usually toward the end of the month.

Wages vary a lot based on the industry, role, and a person's experience. Key sectors like oil and gas often pay more. Besides the base salary, compensation packages often include other benefits.

Common allowances include:

• Housing allowance: Often provided to cover accommodation costs, especially for expatriates.
• Transportation allowance: Helps employees cover their commute.

Overtime & minimums

The standard work week in Libya is 48 hours, spread over five days, typically Sunday to Thursday. Any work done beyond these hours counts as overtime. Overtime pay is 150% of the employee's standard salary rate. There is a cap on overtime, usually limited to three hours per day.

As of early 2025, the government set the monthly minimum wage at 1,000 Libyan dinars. You must pay all your workers at least this amount to avoid penalties.

Employer taxes and contributions

As an employer in Libya, you are responsible for making several contributions on behalf of your employees. These are calculated as a percentage of your employee's gross salary. The primary contribution is for social security.

Employee taxes and deductions

You must withhold taxes and other contributions directly from your employees' paychecks. These deductions include social security, income tax, and a stamp duty.

In Libya, understanding employee benefits and leave is key to hiring and keeping a great team. The country's labor laws provide a foundation for what you must offer. This includes paid time off, holidays, and contributions to social security. Many companies also provide extra benefits to attract the best talent. This can include things like private health insurance and performance bonuses.

Statutory leave

Libyan law sets out the minimum leave you must give your employees.

• Annual Leave: Employees get 30 days of paid annual leave. This increases to 45 days for employees over 50 or those with 20 or more years of service.
• Sick Leave: Employees can take up to 45 consecutive days of paid sick leave, or 60 days if the leave is not continuous within a year. A medical certificate is required to claim sick leave.
• Maternity Leave: Female employees are entitled to 14 weeks of paid maternity leave. This can be extended to 16 weeks for multiple or complicated births.
• Emergency Leave: Employees can take up to 12 days of emergency leave each year for urgent family matters. This leave can't be taken for more than 3 days at a time.
• Hajj Leave: An employee can take 20 days of paid leave once during their employment to perform the Hajj pilgrimage.

Public holidays & regional holidays

Libya has a number of public holidays where employees get a paid day off. Some of these dates are based on the lunar calendar, so they may change slightly each year.

Typical supplemental benefits

Here is a look at both the required and the extra benefits you might offer.

How an EOR can help with setting up benefits

An Employer of Record (EOR) can make it much easier to set up and manage employee benefits in Libya. Here’s how they can help:

• Compliance: An EOR ensures that your benefits packages meet all of Libya's legal requirements. This helps you avoid fines and legal problems.
• Local Knowledge: They understand the local market and what benefits are common. This helps you offer competitive packages to attract and keep the best employees.
• Administration: An EOR handles all the paperwork and administration of benefits. This includes everything from enrolling employees in plans to managing payroll deductions.
• Simplified Payroll: They manage payroll and ensure that all taxes and social security contributions are paid correctly and on time.
• Contracts: An EOR can draft employment contracts that are compliant with Libyan law and include all the necessary details about benefits and leave.

When an employment relationship ends in Libya, you need to follow a clear process. This ensures you treat your former employee fairly and stay compliant with local labor laws. The process involves providing adequate notice and, in some cases, severance pay. It's a formal process that requires clear communication and adherence to legal standards.

Notice periods

In Libya, both you and your employee must give notice to end an employment contract. The standard notice period is 30 days. For employees with longer service, the notice period may be different. For those with less than five years of service, the notice period is one month. If an employee has worked for five years or more, the notice period extends to two months.

You must provide this notice in writing. During the notice period, the employment contract continues as usual. The employee is entitled to their regular salary and benefits.

Severance pay

Severance pay, or end-of-service gratuity, is a required payment in certain situations. For Libyan nationals, severance pay is not a requirement. However, it is mandatory for expatriate employees.

The amount of severance pay for expatriates depends on their length of service. Expatriates are entitled to half a month's salary for each year of service, for the first five years. After five years, it becomes a full month's salary for each subsequent year.

You are not required to pay severance if the termination is due to serious misconduct by the employee.

How Rivermate handles compliant exits

Navigating the details of Libyan labor law can be complex. Rivermate simplifies this process for you. We ensure that every termination and offboarding process is fully compliant with local regulations.

Here’s how we help:

• Legal Compliance: We stay up-to-date with the latest changes in Libyan labor laws. This means you don't have to. We make sure every step, from notice to final payment, is correct.
• Documentation: We handle all the necessary paperwork. This includes drafting termination letters and calculating final payments. We maintain clear records of the entire process.
• Clear Communication: We help you communicate clearly with your exiting employee. This reduces the risk of misunderstandings and disputes.
• Final Settlements: We calculate and process all final payments. This includes outstanding salary, accrued leave, and any required severance pay.

Using Rivermate means you can manage employee exits with confidence. You can be sure that you are acting fairly and in full compliance with the law.

Navigating visas and work permits for Libya requires careful planning. Foreign nationals who want to work in Libya need both a work visa to enter the country and a work permit to be legally employed. The process involves you, your sponsoring employer, and Libyan government ministries. For short-term business trips, a business visa is required, which does not allow for actual employment.

Employment Visas & Sponsorship Realities

To hire foreign workers, a sponsoring company must be registered with the Ministry of Labor and the Libyan Immigration Department. An Employer of Record (EOR) with a registered legal entity in Libya can legally sponsor work visas for employees on behalf of companies without a local presence.

An EOR can help you by:

• Determining the correct visa category.
• Managing the entire application process for work permits and visas.
• Liaising with local authorities to ensure compliance.
• Handling renewals for work visas.

The primary route for foreign employees is a work visa, which is typically valid for one year and can be renewed. The process generally takes between two and three months from start to finish.

Here are the essential documents typically required for a work permit application:

• Valid passport with at least six months of validity
• A formal employment contract
• Medical certificate
• Police clearance certificate
• Educational and professional certificates
• Sponsorship letter from the employer

Business Travel Compliance

If you are traveling to Libya for short-term business activities like meetings, negotiations, or conferences, you will need a business visa, sometimes called a mission visa. This type of visa does not permit you to carry out work in the country.

To obtain a business visa, you will generally need an invitation letter from a Libyan entity outlining the purpose of your visit. Business visas are typically issued for short-term periods, such as up to 90 days.