Employees in Morocco — and around the world — are usually most concerned with two factors: compensation and benefits. Providing the right compensation and benefits helps encourage greater retention rates and employee happiness. However, meeting Morocco compensation laws and statutory benefit requirements will also help you stay compliant. Globalization Partners offers Morocco compensation and benefits outsourcing to help take the stress out of compliance.
Morocco Compensation Laws
Morocco recently updated its minimum wage for state body and public administration employees. Wages will gradually increase up to MAD 400 or 500 per month from 2019 to 2021. These wages often vary based on position and sector, so you should research the Moroccan compensation laws relating to your employees before drafting an employment contract.
Typically, employees work 44 hours a week from Monday to Friday. Overtime is compensated per an employment contract or a collective bargaining agreement. Since Morocco compensation laws can vary based on these agreements, it’s best to understand them from front to back before hiring.
Guaranteed Benefits in Morocco
Your Morocco benefit management plan must include statutory benefits required by the country. For example, employees should receive time off for Morocco’s 13 national holidays in addition to 24 days of paid annual leave after one year of service. Sick leave is another guaranteed benefit that employees are eligible for if they’ve contributed 54 days of work in six months of coverage. Sick pay usually equals two-thirds of an employee’s average daily wage and begins on the fourth day.
Female employees usually receive 14 weeks of paid maternity leave at their normal salary. They also have the option to take one year of unpaid leave. A guaranteed benefit for new fathers is three days of paid paternity leave.
Morocco Benefits Management
Employers need to factor additional benefits into their Morocco benefit management plan to encourage employees to stay in their positions with the company. While Morocco compensation laws do not dictate a 13th-month bonus, some companies still offer it as well as seniority bonuses. Other common supplemental benefits include:
- Company pensions
- More paid vacation time
- Childcare allowances
- Transportation allowances
- Additional health insurance
- Fitness allowance
- Job training
Morocco uses a public/private healthcare system, where the national healthcare system covers basic healthcare and some hospital care. Private insurance is available at private clinics, and many employers will choose to offer a private insurance plan as a supplemental benefit.
Restrictions for Benefits and Compensation
The biggest restriction for benefits and compensation in Morocco is that you must establish a subsidiary before you can hire employees and pay them. Globalization Partners changes this process through our Employer of Record solution. When you choose us for Morocco benefit and compensation outsourcing, we’ll make sure you stay compliant and offer a competitive plan for employees. Plus, we’ll hire top talent to help you grow your new business location.
Morocco Competitive Benefits Planning
As your business grows, you’ll hire employees in new countries and create benefits plans according to local laws. You can also use your benefits packages to improve your company’s reputation with the right approach. Ensure you prioritize this process as a key part of your global business strategy.
Morocco Employee Benefits Plans
Benefits plans support your growth in a few ways. They make your company stand out in the labor market and encourage job seekers to apply for your vacancies. A strong benefits plan also improves morale within the workplace and increases retention in the long term.
Fringe benefits can include a range of provisions, and it’s up to you to choose the right ones for your employees. Potential benefits can include:
- 13th-month bonus
- Supplemental health insurance
- Transportation allowances
- Meal vouchers
- Fitness passes
- Company phones
Legal Obligations for Benefits
While your supplemental benefits will make your company competitive in the labor market, you should first focus on your legal obligations. Moroccan employment regulations require:
- Paid annual leave
- Public holidays off
- Sick leave
- Maternity leave
- Social security contributions
Designing Morocco Employee Benefit Plans
As you create your benefits plan, you’ll need to establish a balance between your company’s resources and your employees’ needs. You should also consider the standards in the labor market and how you can compete with other businesses.
While the specifics of your plan will vary between countries, you can follow a few basic steps regardless of your location.
1. Examine Your Resources and Goals
Benefits start with your company’s revenue. It’s helpful to assess your company’s resources and expenses to create a budget for your benefits spending.
You can also use this initial stage to address your goals and how your benefits may help you achieve them. For instance, if you want to focus your efforts toward recruiting, you may want to offer benefits that your competition doesn’t to make you stand out in the market.
2. Research Employees and the Labor Market
You can only compete with other businesses if you know what they’re offering. Dedicate your second stage to researching the labor market and learning about the benefits packages of companies similar to yours. Consider factors like size and industry to guide your research.
It’s also wise to talk to employees directly about their needs and expectations. Distributing surveys or conducting interviews can help you learn about workers in the area and what they like to see from employers.
3. Create a Plan Based on Your Findings
With your research and budget in place, you can build a plan that strikes a balance between your company and your employees. Start by allocating funds toward any required benefits, then distribute the remainder to fringe provisions you identified during your research.
Average Cost of Benefits
Expenses vary between companies based on the benefits they choose to offer. Factors like size, location, and industry can all play a role in the cost of benefits. There’s not a reliable average number you can use to guide your spending, so you should create a budget based on your unique needs instead.
How to Calculate Benefits
Benefits calculations will vary based on the provisions you offer. For example, if you choose to provide a 13th-month bonus, you’ll have to determine the monthly earnings for every employee to calculate their given amounts.
You can find guidance for some benefits calculations in the labor laws, like leave provisions and social security contributions. Currently, employers must contribute 21.09 percent of employees’ earnings for social security purposes. Employees must contribute 6.74 percent.
How Are Employee Benefits Taxed in Morocco?
Any benefits, cash-based or not, qualify as income. Since employers are obligated to deduct income taxes from employees’ paychecks, you’ll need to factor benefit values into your calculations.
Employee Health Benefits
Morocco’s health care system is primarily funded by the government, giving many people access to low-cost or free care. That said, the country has public and private sectors for care. Employers and employees must contribute to the nation’s social security scheme, which partially funds the public health system.
As an employer, you’re not obligated to provide health insurance beyond the required social security contributions. However, you may choose to provide supplemental health insurance for private care and expenses not covered in the public sector.
Trust Globalization Partners for Employee Benefits Planning in Morocco
Get in touch with Globalization Partners today to discuss our benefits planning support.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.