Regulation on Employment of Foreign Workers in the Kurdistan Region of Iraq
Corporate Commercial / Kurdistan
On March 8, 2024, the Kurdistan Regional Government (“KRG”) introduced a comprehensive framework to regulate the employment of foreign workers within its jurisdiction.
Law Update: Issue 369 - Real Estate & Construction and Hotels & Leisure
Haydar JawadSenior Counsel,Corporate Commercial
Aro OmarAssociate,Corporate Commercial
On March 8, 2024, the Kurdistan Regional Government (“KRG”) introduced a comprehensive framework to regulate the employment of foreign workers within its jurisdiction. This framework aims to regulate the process for hiring foreign workers to ensure that the local workforce's rights and opportunities are safeguarded. The following details provide an overview of the key aspects of this regulation, covering application procedures, employment quotas, contractual obligations, and other significant areas. References to government bodies in this article are references to the bodies of the KRG.
For foreign employees to legally work in the Kurdistan Region of Iraq (“KRI”), they or their employers must first obtain a work permit on their behalf. The process begins with the employer announcing the job vacancy on the Ministry of Labour's online portal designed explicitly for this purpose. This announcement must remain published for 30 days, allowing local candidates the opportunity to apply for the position. If, after this period, the employer deems that no suitable local candidates have been found, they can proceed with the employment of a foreign worker, provided all other stipulations for the work permit application are met. Among these stipulations, the employer must present clearances related to tax and social security. Additionally, employment agreements for foreign workers must be approved by the Ministry of Labour, ensuring that these agreements comply with the local labor laws and regulations.
The 2024 regulation on foreign workers in the KRI reiterates the 75% rule established by an earlier regulation last year, emphasizing the requirement that at least 75% of a company's workforce must be local employees. This reaffirmation is aimed at ensuring the prioritization of local employment and addressing disparities in the labor market. The regulation also maintains strict guidelines on the duration and renewal of contracts for foreign workers, specifying that contracts cannot exceed two years in length and cannot be renewed for a total period exceeding eight years. These measures appear to be designed to ensure that foreign labor is employed temporarily to address specific gaps in the local labor market, rather than becoming a long-term alternative to hiring local workers.
The regulation also outlines specific grounds upon which the employment of foreign workers can be terminated. While these grounds are generally in alignment with the KRG’s Labour Law, certain modifications have been made. For instance, the conditions for termination based on absence have been adjusted. Moreover, a new ground for termination has been introduced, applicable to foreign employees who find themselves included on a blacklist maintained by the KRI Ministry of Interior.
To facilitate a smooth transition to the new regulatory regime, employers have been granted a six-month grace period from the date of publication of the regulation. The date of publication is March 8, 2024. During this period, employers are expected to review their employment practices and make necessary adjustments to ensure full compliance with the new requirements. This grace period reflects the KRG's understanding of the complexities involved in aligning existing employment arrangements with the new regulatory framework.
The 2024 foreign workers regulation in the KRI mandates new compliance standards for employers. At Al Tamimi & Company, we are closely monitoring its implications and stand ready to assist employers with navigating these changes, ensuring compliance, and providing strategic advice and updates on this regulation.
The regulation also maintains strict guidelines on the duration and renewal of contracts for foreign workers, specifying that contracts cannot exceed two years and cannot be renewed for a total period of more than eight years.
For further information,please contact Haydar Jawad and Aro Omar.
Published in June - July 2024
