Employer of Record in Eritrea

How to Hire Employees In Eritrea

Hiring in Eritrea for the first time can be overwhelming, especially when navigating unfamiliar employment laws.  Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success.  Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Eritrea in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Eritrea.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Eritrea’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Employment and Labor Laws in Eritrea

An Employer of Record (EOR) acts as the legal employer for workers in Eritrea, taking on key responsibilities to ensure compliance with local labor laws and regulations. The EOR facilitates the hiring process for businesses that want to employ workers without establishing a legal entity in the country.

The employer of record in Eritrea is responsible for:

• Employment Compliance: Ensure all employment contracts comply with Eritrea's labor laws and regulations, including proper classification of employees.
• Payroll Management: Calculate, process, and distribute employee salaries in accordance with Eritrea's payroll laws, including deductions for taxes and social security contributions.
• Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
• Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Eritrea's legal requirements.
• Benefits Administration: Provide mandatory employee benefits as required by Eritrea's labor laws, such as health insurance, pension contributions, and statutory leave.