Known as the “Cradle of Humanity” and the birthplace of coffee, Ethiopia is a country of rich history and rapid modernization.
Not only is Ethiopia indirectly responsible for helping those of us who aren’t morning people start our day, but it’s also home to an expanding talent pool of skilled professionals seeking remote jobs.
One obvious advantage of global hiring is that average salaries in countries such as Ethiopia tend to be lower compared to many Western countries, making it a cost-effective choice for businesses.
However, Addis Ababa’s emerging tech and startup scene also highlights why Ethiopia is an appealing option for hiring remote workers.
Advantages of Hiring in Ethiopia
Ethiopia benefits from many English-speaking graduates and substantial government investments in education and vocational training.
The Ethiopian government prioritizes education and career development, mainly through reforms in the Technical and Vocational Education and Training (TVET) system.
TVET focuses on sectors such as agriculture, manufacturing, tourism, and ICT — enhancing the quality and accessibility of education for all groups.
Some basics facts about Ethiopia include:
- Languages: Amharic, English
- Currency: Ethiopian Birr (ETB)
- Capital City: Addis Ababa
- Population: 130 million
- Cost of Living Rank: 100th
Strategic Government Initiatives Driving Growth
Ethiopia’s economy is consistently one of the fastest-growing in Africa, with GDP growth rates often exceeding 5% in recent years. The Ethiopian government implemented several initiatives to sustain this high growth trajectory.
The 10-Year Development Plan, launched in 2020, focuses on facilitating the shift towards a more private-sector-driven economy by fostering efficiency and introducing competition in the energy, logistics, and telecommunication sectors.
Common job sectors in Ethiopia include:
- Agriculture
- Trade and commerce
- Manufacturing
- Construction
- Services
- Project management
- Tourism
Employment Laws: Hiring Compliantly in Ethiopia
Employment Contracts
Employment contracts are required in Ethiopia and can be either oral or written. If the agreement is oral, the employer must provide the employee with a written statement within 15 days that spells out the contract details.
Contract types in Ethiopia include:
- Indefinite contracts: This is the default option, and employees hired under an indefinite contract are considered full-time employees. Employees with indefinite contracts are entitled to annual leave and social security benefits.
- Fixed-term contracts: These contracts are intended to cover a specific period and are limited to no more than five years, at which point they convert to an indefinite contract.
- Temporary contracts: The maximum length of temporary contracts is 45 days. They’re intended to fill sudden vacancies, such as filling in for a departing employee until a new one can be hired.
Working Hours & Pay
The standard workweek in Ethiopia is 48 hours, with a maximum of eight hours per day for employees over 18 and seven hours per day for employees under 18.
Employees who work more than eight hours a day or 48 hours a week are eligible for overtime compensation. Overtime may not exceed four hours a day and 12 hours a week.
Overtime Pay Rates:
- Daytime (6 a.m. to 10 p.m.): 1.5 times the regular hourly rate
- Nighttime (10 p.m. to 6 a.m.): 1.75 times the regular hourly rate
- Weekly rest day: 2 times the regular hourly rate
- Public holiday: 2.5 times the regular hourly rate
There is no national minimum wage in Ethiopia. However, the recommended minimum salary for civil servants is ETB 420 per month.
Probation Periods
In Ethiopia, employers can hire employees on a probationary basis for up to 60 days. The probation agreement must be in writing, and either party can terminate the contract without notice during that time. No severance pay is owed if a contract is terminated during the probation period.
Employer Taxes
Employers in Ethiopia are required to register with the Private Organization Employees Social Security Agency. They must contribute 11% of an employee’s basic salary to the pension fund, while employees contribute 7%.
Termination Process & Severance Pay
Under Ethiopian labor laws, terminating an indefinite employment contract requires a written notice from the employer specifying the reason and effective date. The notice period depends on the length of service:
- Up to 1 year: 1 month
- 1-9 years: 2 months
- More than 9 years: 3 months
Severance pay varies based on the length of service:
- First year: 30 days’ wages (pro-rated for less than one year)
- Each additional year: 30 days’ wages + 10 days for each additional year worked, with a maximum of 12 months
Employees laid off due to redundancy are entitled to an additional 60 days’ wages.
Paid Leave Laws
Vacation and Holiday
Employees who’ve worked for an employer for at least one year receive 16 days of paid vacation annually, plus an extra day for every two years of service. Additionally, there are 13 annual paid public holidays, including Ethiopian Christmas (January 7) and Labor Day (May 1).
Sick Leave
Ethiopian employees can take up to six months of sick leave per year. The first month is fully paid, and months two and three are paid at 50%. The remaining three months are unpaid.
The total amount of sick leave can’t exceed six months within a 12-month period.
Maternity Leave
Pregnant employees in Ethiopia are entitled to 120 days of paid maternity leave. This includes 30 days before the due date and 90 days following the child’s birth.
If the baby is born early, postnatal leave starts immediately. Additional leave is granted if the delivery is delayed beyond the prenatal leave period.
Paternity Leave
Male employees in Ethiopia receive three days of fully paid paternity leave.
Why Digital Nomads Love Ethiopia
Ethiopia offers an enticing mix of rich culture, affordable living, and improving internet infrastructure for freelancers and digital nomads.
The capital, Addis Ababa, boasts co-working spaces such as Bluespace, Iceaddis, and Zellan, which provide reliable connectivity. The country’s renowned coffee culture fosters social connections through traditional coffee ceremonies.
Ethiopia is also a paradise for hiking enthusiasts. The Simien and Bale Mountains provide breathtaking trekking experiences and generally pleasant weather.
While Ethiopia doesn’t have a specific digital nomad visa, it offers an e-visa valid for 30 or 90 days, making it easy for nomads to perform remote work while exploring this vibrant nation.
Hire in Ethiopia with RemoFirst
Hiring remote employees in Ethiopia presents unique challenges, from complex employment laws to administrative hurdles. As an Employer of Record (EOR), RemoFirst simplifies this process by managing compliance, payroll, and benefits for remote teams on behalf of global employers in over 180 countries, including Ethiopia.
Book a demo with RemoFirst to discover how our EOR services can assist with hiring international top talent.
