Benin is a country in West Africa located between Ghana and Nigeria with its southern shore in the Gulf of Guinea. The country has an impressive 4.9% 5-year compound annual growth, thanks mainly to its steady foreign trade and the introduction of structural reforms for economic diversification and modernization. The significance of foreign trade is evident from the combined value of imports and exports with Benin’s GDP, which stands at 70%. The growth of the service sector has increased the use of up-to-date automobiles and computer-based operations. The economy is open to foreign direct investment (FDI) as foreign ownership is allowed and bureaucratic hurdles are being eliminated.
Currency: West African CFA franc (XOF)
Principal Languages: French, Fon, Yoruba
Government: Presidential Republic
Capital City: Porto-Novo
Major Cities: Cotonou, Parakou, Djougou
Both fixed term and indefinite employment contracts are incorporated in Benin. However, the duration of fixed-term contracts cannot be more than 48 months, and they must be in writing. Indefinite contracts can be verbal. Though, as a general practice, these contracts are drafted in the local language and contain provisions regarding employees’ remuneration, benefits, and termination.
Probation is allowed for a period of 15 days in the case of temporary workers, 1 month for employees, and 3 months for those in managerial or supervisory positions. A worker’s remuneration in probationary period is determined by the professional classifications agreement or the collective bargaining agreement that applies to the employer.
Termination of a fixed term contract is not allowed through notice, and in case this happens the party responsible for the breach needs to pay damages to the other party. An indefinite contract can be canceled for any reason by an employee, but the employer needs to follow a certain procedure which involves notifying an employee the reason for termination and relevant details. Notice periods for different levels of employees is the same as their maximum probation periods.
A typical workweek in Benin comprises 8-hour workdays from Monday to Friday and a 4-hour workday on Saturday. Work is performed in two shifts, from 8 am to 12:30 pm and 3:30 pm to 7:00 pm with a 3-hour resting period in between. Total weekly work schedule is between 40 and 46 hours but is allowed to go up to 56.
Overtime is allowed for up to 240 hours during a year. Payment for overtime is at 112% of the regular hourly rate from 41st hour onward till 48th during a week, and 135% of the regular rate beyond the 48th hour in a week.
Benin observes the following public and religious holidays:
- January 1: New Year’s Day
- January 10: Traditional Day
- Eastern Monday or Dyngus Day
- May 1: Worker’s Day
- Ascension of Jesus
- Whit Monday
- Eid ul-Fitr
- Aug 1: Independence Day
- Sep 15: Assumption of the Blessed Virgin Mary
- Eid al-Adha
- Oct 26: Armed Forces Day
- Nov 1: All Saints Day
- Mauloud (Birth of the Prophet)
- January 25: Christmas Day
Employees in Benin are entitled to 24 days of paid annual leave which increases by 2 days after completing 20 years of service, 4 days after completion of 25 years, and 6 days after completing 30 years. Employees are allowed to split the leaves, but they must take at least 14 days’ leave at once.
If an employee’s probation period is over but the individual has worked for less than 12 months is entitled to a paid sick leave of 1 month. Employees with 1 to 5 years of service are entitled to 3 months of fully paid sick leave and 3 additional months of sick leave at 50% of the regular wages. Those who have completed 5 or more years in the employment of an employer are entitled to 6 months of fully paid sick leave.
Women employees get paid maternity leave for 6 weeks before childbirth and 8 weeks post-delivery. Female employees are usually eligible for 6 weeks of paid leave before the birth and 8 weeks after the birth. The employer pays 50% of maternity benefit while social insurance pays the remainder.
A leave of 3 days for birth at home is available for fathers, which in effect is paternity leave.
An employer is required to contribute 15.4% of employees’ gross salary to social security (6.4% towards pension and 9% towards family allowance) and an additional 1- 4% as insurance for industrial injury which varies based on the level of risk involved in the employment.
Insured employees need to pay 3.6% of their gross earnings. The employer needs to pay 6.4% of gross payroll towards pension. Minimum monthly earnings, as well as minimum wage, is taken into account for calculating contributions.
Employees who are assessed as disabled with 66.7% loss of earning capacity and have taken a coverage of 60 months with a minimum contribution of 6 months during the preceding 12 months are eligible for disability pension. In case of an accident, even the condition of coverage is waived.
Survivors of an employee are eligible for survivor pension if the deceased was entitled to a disability or old-age pension, or if the person had a minimum 180 months of coverage. Survivors who are entitled to the benefit include a widow, a dependent or disabled widower married to the deceased for more than a year, a dependent child 18 years of age or younger (age 22 for students and disabled).
Sickness and Maternity
The Social insurance and employer-liability system provide benefits to pregnant women, on account of maternity as well as sickness. The employer needs to pay 0.2% of gross payroll to the system which is calculated based on minimum monthly income and minimum wage. A pregnant employee is also eligible to receive sickness benefits after completing 6 months of coverage.
Under the social insurance and employer-liability system, employers need to pay 1% to 4% of gross payroll after assessing the professional risk involved in a job. All accidents at work or while commuting to and from the workplace are covered under work injury benefit.
Insurance for Temporary Disability
An employee must receive an assessment of at least 66.7% loss of average daily earnings applicable in the month from which his or her disability began. The calculation of payable amount factors in the employee’s annual earnings during the year before the beginning of disability, minimum wage and degree of disability.
Temporary Disability Benefit (Employer Liability)
Temporarily disabled employees receive 33.3% of their insured average daily earnings as applicable in the month from which disability began. They receive this benefit until recovery or declaration of permanent disability. The calculation of payable benefit is also a crucial element while determining the minimum wage.
An employer needs to contribute 8.8% of gross payroll for the benefit of family allowances.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Benin and hire their employees without having to establish a branch office or subsidiary in Benin.
- Your candidate is hired via our Benin 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 Benin 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 150+ 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.