Kurdistan Regional Government Council of Ministers obliges private sector employees to ensure that at least 75% of their workforce is local

Client Alert

On September 20, 2022 the Kurdistan Regional Government’s Council of Ministers (CoM) issued a Decree numbered 172/2022 in regards to minimum local employment requirements (Decree).

Private Sector Employers in the KRI Required to Ensure 75% Local Workforce

The Decree provides a clear obligation on private sector employers to ensure that at least 75% of their work force is constituted of local employees, leaving a maximum of 25% to foreign employees. Furthermore, no foreign employee may work in the KRI without a work permit issued by the Ministry of Labour and Social Affairs (MOLSA). The Decree applies to employers in all sectors.

The Decree also states that foreign experts shall provide vocational training to KRI citizens to develop their work skills.

How will the Decree be Implemented?

The Decree does not contain a grace period for the private sector companies to bring themselves into alignment with its content.  However, the Decree requires MOLSA to issue implementing regulations to facilitate the enforcement of the Decree. This likely means that the Decree will not be strictly enforced until such time as the implementing regulations are issued.

On December 5, 2022, the General Directorate of Labour and Social Affairs issued an administrative decision reiterating the contents of the Decree and further stating that employers should abide by the 25% cap on foreign workers. Furthermore, MOLSA is in the process of preparing the draft implementing regulation, however, to date, such regulation has not been finalized or issued.

Effects on Private Sector Employers

All entities with a dominantly foreign work force operating in the KRI are expected to be affected by this Decree, and this extends to both limited liability companies established in the region, as well as branches of foreign companies. However, until such time as implementing regulations are issued by MOLSA, the specific enforcement of the Decree, its effects on employers, and penalties for non-compliance with the Decree are unknown.

If you would like more information about this topic, please contact us.

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