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With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance in Iraq.

01 Overview of the Labor Law System

1.Legal System

The legal system of labor in Iraq on the basis the Labor Law No. 37 of 2015, this law provides a comprehensive framework for labor relations in Iraq.

2.Resources and Agencies

Iraqi Labor Law No. 37 of 2015, is the main law regulating labor relations.

The ministries and government agencies responsible for workplace issues include:

? Ministry of Labor and Social Affairs (Directorate of Labor and Social Security)

? Social Security and Workers' Pensions Department

? Employment Offices affiliated with the Labor Authority

? National Center for Vocational Training

? Occupational Health and Safety Department

? Labor Courts

02 Employment Qualifications and Classification

1.Employment Age

The minimum working age in Iraq is 15 years. Employment of anyone younger than this age is prohibited under the Labor Law.

Individuals between the ages of 15 and 18 are considered minors and benefit from additional protection.

Private Sector Retirement (Social Security Law No. 18 of 2023): Eligibility is based on age plus length of insured service.

2.Qualifications for Employment

If the person will be working in Iraq, Iraqi labor law applies regardless of nationality, and they must be able to register as an employer for tax and social security purposes. This requires a recognized legal presence (such as an Iraqi branch or company).

Foreign workers must obtain a work permit from the Ministry of Labor and Social Affairs before employment.

3.Classification of Employment

Types of Recognized Employment Relationships in Iraq:

? Standard Employment Contract

? Independent Contractor (Service Contract/Civil Contract)

? Labor Recruitment/Agency Employment

? Outsourcing/Subcontracting

? Employer of Record

4.Foreign Workers

There is no specific, uniform ratio between local and foreign workers in the law, but the Ministry may stipulate that the majority of workers be Iraqis in some sectors (especially in oil and gas contracts and government projects).

Foreigners are permitted to work in various sectors (oil, gas, construction, services, and private companies), provided that:

? The work does not conflict with public order or security.

? The profession is in demand and a qualified Iraqi alternative is not readily available.

? Certain senior government or administrative positions are restricted to Iraqis.

Foreign workers must obtain a work permit from the Ministry of Labor and Social Affairs before employment.

03 Recruitment and Employment Contracts

1.Background Examination

There is no explicit provision in the Iraqi Labor Law prohibiting background checks on applicants. However, the Iraqi Constitution protects privacy and human dignity (Articles 17 and 37), so the screening must be job-related and non-arbitrary.

2.Contract Types

? Indefinite-Term Contract

? Fixed-Term Contract

? Part-time Contract

Article 38 of the Labor Law stipulates that the employment contract must be in writing and in Arabic. It may be translated into another language if the worker is a foreigner, but the Arabic version is the primary reference.

3.Probationary Period

The maximum period permitted by law is only 3 months. An employee may not be placed on probation more than once with the same employer for the same type of work. The probationary period must be stated in writing in the employment contract. If it is not stated, the employee is considered permanent from the first day.

04 Working Standards

1.Remuneration and Statutory Benefits

Most employment contracts stipulate a base salary plus allowances (such as transport, accommodation, or work-related expenses).

2.Social Security and Employment Taxes

Both the employee and employer are subject to mandatory contribution to the Retirement and Social Security Authority for Workers. Current Contribution Rates of Total: 17% of the monthly wage.

3.Working Hours

Standard Working Hours: The maximum is 8 hours per day and 48 hours per week. Friday is the mandatory weekly rest day. Some companies adopt a five-day work system, while others adopt a 6-day work system, provided that the total weekly workday does not exceed 48 hours.

Some senior managers or employer representatives may be practically exempt from overtime.

4.Rest and Leave

The worker is entitled to a weekly paid rest day of no less than 24 consecutive hours. The official and customary day of rest in Iraq is Friday and Saturday.

After completing 1 year of service, the worker is entitled to a minimum of 21 paid days per year.

05 Occupational Health and Special Protection

1.Occupational Health and Security

The employer is obligated to provide a safe and healthy work environment for workers.

2.Special Protection

? Working Women: Preventing Discrimination, Night Work, Dangerous or Harmful Work, Maternity Leave, Protection from Dismissal

? Juvenile (Minors 15-18 Years Old): Minimum Age, Working Hours, Night Work, Dangerous Work, Medical Examination

? Persons with Disabilities: A minimum of 5%, Protection from Dismissal, Equal Rights, State Support

? Workers in hazardous work: They have additional rights, such as longer annual leave (at least 30 days)

06 Personal Information and Privacy

1.General Rules

Iraq does not yet have a comprehensive law for the protection of personal data similar to that in the European Union (GDPR) or in some Gulf countries. However, the Iraqi law prohibits and punishes anyone who discloses secrets and information obtained, as well as information related to people's private or family lives.

2.Transnational Transfer

In Iraq, there is currently no specific law regulating the protection of personal data or the method of transferring it abroad in detail. However, the Constitution affirms the individual's right to privacy, and the Labor Law stipulates the need to preserve employee records and prevent their misuse.

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Iraqi Labor Law No. 37 of 2015 does not include a specific chapter on combating discrimination and harassment, but it does include general rules that can be relied upon in this area. The law emphasizes the principle of equality and non-discrimination among workers on the basis of gender, age, religion, nationality, beliefs, or social status. This includes equal pay, promotions, training, and treatment within the workplace. It also stipulates the protection of working women and the prevention of any infringement of their rights.

2.Protective Characters

Under the provisions of the Iraqi Constitution and Labor Law No. 37 of 2015, the principle of equality and non-discrimination is one of the fundamental rules governing employment relationships. Article 14 of the Constitution states: "Iraqis are equal before the law without discrimination based on gender, race, nationality, origin, color, religion, sect, belief, opinion, or economic or social status."

08 Internal Policies

1.Applicability

It is perfectly legal for the employees to be managed through internal policies established by the company or employer, provided that these policies do not conflict with the provisions of Iraqi Labor Law No. 37 of 2015, the Constitution, or relevant laws.

2.Validity

In Iraq, internal policies are subject to a set of legal and regulatory controls that balance the employer's right to regulate labor affairs with the protection of employee rights.

3.Whistleblowing

In Iraq, there is still no specific, independent law entitled "Reporting Violations" or "Protection of Whistleblowers," as is the case in some countries. However, if we refer to the Iraqi laws, we find general principles that can be considered the basis for regulating this issue within institutions.

09 Transactions

1.Employment Relationship

If the transaction is merely a transfer of shares from one shareholder to another (a change in company ownership), the legal personality of the company remains unchanged. Since the contract holder is the "Company" as a legal entity, the employment contracts remain in effect without any changes. Positions, salaries, terms, and rights remain unchanged, and the contract may not be terminated or changed simply because of a change in ownership.

2.Compensation

Under the provisions of Iraqi Labor Law No. 37 of 2015, a distinction must be made between the transfer of shares and the transfer of assets or merger when determining whether employees are entitled to compensation.

10 Termination of Employment

1.Termination Grounds

Under the Iraqi law, an employer does not have absolute freedom to terminate an employee. Rather, the termination must be based on a legitimate and specific reason. Otherwise, the termination is considered arbitrary and results in compensation for the employee.

2.Termination Procedure

Iraqi Labor Law No. 37 of 2015 requires any party wishing to terminate an open-ended employment contract (whether the employer or the employee) to provide written notice prior to the termination date. The legally prescribed notice period is thirty days. This notice ensures that the contract remains in effect throughout this period, with the usual obligations of both parties.

If the employer wishes to terminate the contract immediately without waiting for the notice period, he may pay the employee's wages for the notice period (30 days) as compensation for the advance notice.

The law allows the employer to dismiss an employee immediately, without the need for notice or notice allowance, if the employee commits a serious misconduct.

3.Termination Protection

Under the provisions of Iraqi Labor Law No. 37 of 2015, an employee enjoys legal protection against unlawful dismissal.

4.Severance and Compensation

Upon termination of employment or resignation, unless the termination is due to serious disciplinary reasons, an employee is entitled to an end-of-service gratuity equivalent to 2 weeks' wages for each year of actual service.

The employer must pay all entitlements within seven days of the date of termination of employment.

5.Wrongful Termination

If it is determined that the dismissal was unlawful or without a legitimate reason, the worker has the right to: Appeal the dismissal decision before the Labor Court or the Labor Disputes Committee.

Additional compensation may also be awarded for material and moral damages resulting from unlawful dismissal.

6.Mass termination and Layoffs

The current Iraqi legislation does not have a specific law or separate chapter regulating "collective dismissal" or "economic dismissal" in detail, as is the case in some other countries.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

Iraqi Labor Law No. 37 of 2015 does not impose a general obligation on employers to conclude non-disclosure agreements (NDAs) with employees. This means that the law does not require all employees to automatically sign confidentiality agreements. However, the law allows employers to include such terms in individual employment contracts or internal regulations if doing so serves a legitimate interest related to protecting business secrets.

2.Non-Compete and Non-Solicitation

Iraqi law (Labor Law No. 37 of 2015) does not include explicit provisions regulating non-compete or non-solicitation clauses.

If they are worded excessively or restrict the worker in a way that harms his constitutional right to work (Article 22 of the Iraqi Constitution guarantees the right to work), they may be deemed invalid or unenforceable before the courts.

12 Work Representation and Trade Unions

1.Work Representation

Under the provisions of Iraqi Labor Law No. 37 of 2015, the legal framework for worker representation within the workplace is based on the principle of union organization, rather than the establishment of works councils or internal employee committees, as is the case in some comparative systems.

2.Trade Unions

Under the provisions of Iraqi Labor Law No. 37 of 2015 and the amended Trade Union Law No. 52 of 1987, workers in Iraq enjoy the right to freely form and join unions, whether at the sector or occupational level, or within broader federations. Thus, the trade union system in Iraq is based on the principle of pluralism, whereby more than one union may exist within a single sector, and unions may also unite into general federations such as the General Federation of Trade Unions in Iraq.

13 Dispute Resolution

1.Procedures & Enforcement

According to the Civil Code, Article 51/First, a claim for rights arising from labor relations shall not be heard after (3) years from the date of accrual, the period specified for hearing a claim for rights begins from the date on which the right accrues, however, it is not possible to reclaim money paid by the employer to release a right after it has been forfeited, given that the statute of limitations remains for 30 days.

2.Waiver & Enforcement

Under the provisions of Iraqi Labor Law No. 37 of 2015, the general rule stipulates that labor rights established by law are mandatory and protective in nature. Therefore, the worker may not waive them in advance or agree to anything that contradicts them, whether in the employment contract upon appointment, during its validity, or upon termination. Any condition or agreement that includes a waiver of these rights is void for violating public order.

14 Others

1.Latest Development & Trends

In general, there is a trend toward updating labor laws to bring them more in line with international standards. There is a proposal to issue a modernized trade union law that more clearly regulates freedom of association and collective bargaining, as well as a draft law to amend or update Labor Law No. 37 of 2015 to address issues of foreign labor, social protection, and new forms of employment.

2.Cultural and Religious Considerations

Religiously, Iraqi society is predominantly Muslim, and therefore certain matters are considered semi-mandatory by custom and relevant laws, such as respecting prayer times, reducing working hours during Ramadan, and observing official holidays during Islamic holidays. Furthermore, any practices that may be considered contrary to Sharia law or provocative to society must be avoided, such as displaying alcoholic beverages or serving non-halal food in the workplace.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Ahmed Hankawi is the Managing Partner at Etihad International Partners known for his broad experience advising clients across various sectors on corporate, regulatory, and compliance matters exclusively banking & finance, litigation, employment.

Translator

Zhou Hao, Master of Laws, Associate at Anli Partners. Areas of expertise: Labor Law, Dispute Resolution, ESG Compliance.