This article aims to clarify the scope of work and legal procedures related to labor and social security affairs in Iraq, according to the instructions issued by the Department of Labor and Social Security at the Ministry of Labor and Social Affairs. Through this detailed explanation, we seek to assist companies in understanding their obligations and avoiding legal violations.
First: Monthly Payment of Social Security Contributions:
According to the provisions of Article (16) of the Workers' Retirement and Social Security Law No. 18 of 2023, companies are obligated to pay the monthly contributions due for workers covered by the provisions of the law during the following month.
Approved Mechanism:
- In the first week of each month, our company's team reviews the Department of Labor and Social Security to calculate the contributions due.
- A payment claim for the required amounts is sent to the company via email, including details of the contributions to be paid.
- The company is reminded weekly of the need to pay until it is completed.
Important Notes:
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Labor Movements (Addition / Termination of Services / Salary Adjustment):
- Our company must be provided with any labor movement that took place during the month for which contributions are to be paid no later than the 5th of the following month.
- Any delay in reporting may result in late payment fines or a disruption in the settlement of monthly data. In addition, the delay will lead to the postponement of the labor movement to the following month.
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In the event of termination of a worker's services:
- If the number of workers in the company or project is less than 20 workers, we must be provided with the data of a replacement worker, provided that his salary is not less than the salary of the worker whose services have been terminated.
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Salary Increases:
- The annual statement is submitted to the Department of Labor and Social Security at the beginning of February of each year, and includes the names of workers who are continuing to work for the company. The statement must include an annual increase in wages for each worker, based on the provisions of Article (63/Fourth) of the Labor Law No. 37 of 2015.
- If we are not provided with the amount of the increase due for each worker, an increase of ten thousand Iraqi dinars in the monthly wage for each worker will be adopted by default.
- The annual wage increase movement is an integral part of the annual statement, and no amendment to wages is accepted outside of this statement.
Second: Clearance Letters or Certificates of Good Standing:
According to the procedures approved by the Social Security Department, (Clearance/Good Standing) letters can be issued upon request by the company.
Requirements for obtaining a Good Standing/Clearance Letter from the Department of Labor and Social Security:
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Specify the official entity to which the letter will be addressed accurately (name of the ministry or concerned department).
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Clearly state the purpose of issuing the letter, such as:
- Participating in a tender.
- Organizing or signing a contract.
- Renewing a work practice license.
- Completing project registration requirements.
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If the purpose of issuing the good standing letter is to participate in a tender:
- We must be provided with a copy of the tender announcement or official invitation letter.
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If the purpose is to register a project with an official entity:
- A copy of the registration file or instructions approved by the concerned entity must be submitted.
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If the purpose is to disburse a monthly advance or the final closing account of a project:
You must provide us with the following:
- The name of the project/contract concerned.
- A copy of the beneficiary's letter that includes a request to endorse the social security position (when disbursing the final account).
- Or a copy of the request to release monthly advances in an official format, stamped and signed by the company (when disbursing periodic advances during the course of work).
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If the entity to which the letter is to be issued is a government or private bank:
- We must be provided with the full name of the bank.
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In the event that there are multiple beneficiaries of the letter:
- The purpose of the letter must be unified and identical for all listed entities, otherwise the request will be rejected by the Department of Labor and Social Security.
Fees:
- Government fees vary depending on the entity to which the letter is addressed, the nature of the company's activity, and the size of its obligations.
- Fees start from 50,000 Iraqi dinars and reach 500,000 Iraqi dinars.
- These fees are paid against original government receipts.
Third: Inspection Visits:
According to the inspection provisions stipulated in the Retirement and Social Security Law, inspectors of the Retirement and Social Security Department have the right to conduct field visits to verify the application of the law.
Follow-up Mechanism:
- In the event that your company is due for an inspection visit, you will be notified in advance to schedule a suitable appointment in coordination with the inspection committee, noting that the company is eligible for a visit every two years unless instructions are issued to the contrary.
- A lawyer from our company accompanies the inspection committee during its visit to ensure the smooth running of procedures and provide immediate legal support.
Concluding Note:
All fees and expenses related to inspection visits, clearance letters, and any other transactions are not included in the monthly legal consultation fees.
Contact us
If you require assistance navigating labor laws, social security regulations, or dealing with inspection visits in Iraq, do not hesitate to contact us. Our experienced team, including a skilled lawyer in Iraq, is ready to provide expert legal consultation and support to ensure your company's compliance and smooth operations. Reach out today to discuss your specific needs.
