Djibouti

Overview

Djibouti’s economy is largely driven by the trading activities carried out in the country’s free trade zone and strategic location by the Gulf of Aden. Major economic activities revolve around port facilities, railways, construction, and military bases. The government’s Vision Djibouti 2035, a long-term framework to bring about structural changes and foster entrepreneurship was undertaken in March 2014. The country’s economy has grown by more than 5% for several years, and the GDP growth is expected to be 6.8% in 2018. The government of Djibouti is an investor-friendly destination with an open trade regime, substantial tax breaks, and a stable currency.

Currency: Djiboutian Franc

Principal Languages: Somali (Arabic & French are Official Languages)

Government: Presidential Representative Democratic Republic

Capital City: Djibouti

Major Cities: Ḏânan, Ali Sabih, Tadjourah, Obock 

Employment Contracts

Fixed term employment contracts in Burkina Faso need to be in writing, and these contracts cannot last longer than 3 years. In the case of permanent contracts, it is the best practice to sign a written contract that specifies the compensation, benefits, and conditions of termination. The salary and other types of remuneration payable to employees must be in West African CFA francs rather than any other currency.

Work/Time Regulations

The regular work schedule comprises 48 hours in a week. Since January 1, 2017, working hours in a typical workweek (5 days a week from Sunday to Thursday) are from 8:00 am to 5:00 pm

Leave

Holidays

The following 9 national holidays are observed in Djibouti:

  • New Year’s Day
  • Labor Day
  • Ascension of the Prophet
  • Independence Day (2 days’ holiday)
  • Eid ul-Fitr
  • Eid al-Adha
  • Islamic New Year
  • Birth of the Prophet
  • Christmas Day

Annual Leave
Employees become eligible to get 30 days’ annual leave after completing 1 year of employment.

Sick Leave
Employees are entitled to sick leave for temporary disability and are paid 50% of their regular pay for the first 29 days. Subsequently, they receive 75% of their regular pay. The benefits include hospitalization, medical care, medicine, laboratory services, physical therapy, transportation, and rehabilitation.

Maternity/Paternity Leave
Women employees are entitled to 14 weeks’ maternity leave out of which 8 weeks can be taken before the expected date of delivery and 6 weeks can be taken after that. Fathers of newborn child/children are entitled to 3 days’ paternity leave.

Benefits

Pension and Social Security

Social Insurance System comprises of:

Old-age Pension

Male employees aged 60 and female employees, dockworkers, and manual workers aged 55 who have made at least 25 years of contributions are entitled to an old-age pension. The pension cannot be more than 81% of employees’ average annual salary in the last 10 years.

Early Pension

Employees aged 50 who have made contributions for at least 15 years are entitled to an early pension. Employees must be assessed as physically or mentally incompetent to work. The pension is reduced each year so that the old-age pension is claimed before the normal retirement age. The benefit ranges from 50% of the full old-age pension at age 50 to 90% at the age 59.

Survivors’ Benefits

Survivors of the deceased who was receiving the old-age pension at the time of death or made a minimum of 18 years’ contributions are entitled to the survivor pension. Eligible survivors include widows/widowers aged 45 or more with no dependent children who were married to the deceased for the last 5 years and children aged less than 15 (21 years in case of a student and no limit if the child is disabled). Widows/widowers are entitled to 50% of the old-age pension deceased was receiving at the time of death or was entitled to receive. In case of more than 1 eligible widow/widower, the pension is divided equally.

Orphan's Pension

The orphan pension is equal to 30% of the old-age pension that the deceased was receiving at the time of death or was entitled to receive. The pension is divided equally among the eligible orphans, no more than 10% of the old-age pension. The maximum combined survivor pension is 80% of the old-age pension the deceased received or was entitled to receive.

Medical Benefits comprise of:

Social Insurance

The benefits include:

  • reproductive health services including ultrasound, family planning, and childbirth
  • medical treatment provided by community health centers
  • treatment for tuberculosis, malaria, and other public health epidemics
  • general practitioners, hospitalization, surgery, laboratory services, medicine, specialized treatments, X-rays, and transportation for medical purposes.

Social Assistance

The benefits include:

  • medical treatment by general practitioners
  • generic medicines
  • radiology
  • medical analyses prescribed by specialist doctors, and any related treatment in public hospitals

Work Injury

Employees who worked for at least 12 months before the disability began are entitled to work injury benefits. The injury or accident should be reported within 48 hours. Employers contribute 1.2% of monthly payroll to fund sickness benefits. Maximum monthly wages of 400,000 DJ francs are used to calculate the amount of contributions.

Permanent Disability Pension

The permanent disability pension is based on an employee’s annual wages in the last 12 months before the disability began and assessed the degree of disability that may vary from 11% to 100%.

Constant-attendance Supplement

Employees who require ongoing care/attendance to carry out daily activities are paid 40% of the permanent disability pension.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into Djibouti and hire their employees without having to establish a branch office or subsidiary in Djibouti.

  • Your candidate is hired via our Djibouti PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
  • Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Djibouti laws.
  • Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
  • With no contractor risks, pass on the compliance burden to Global PEO Services.

Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 100+ Countries

  • Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
  • We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.

Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and management. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcount.

Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.

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