Tanzania is one of the growing economies in Africa. In 2020, Tanzania ranked 141 out of 190 economies in the World Bank’s ease of doing business report 2020. The GDP of Tanzania peaked in 2021 at 67.78 USD Billion. The World Bank projects the growth rate will reach up to 4.5 – 5.55% in 2022, attracting several businesses to the country.
If you plan to set up a business in Tanzania, you must acquaint yourself with the country’s employment law. The Tanzanian labor law revolves around the employer-employee relationship and provides a legal framework to maintain workplace standards that support employee rights. It includes detailed information about working hours, leaves, employment contracts, termination, and severance pay services in Tanzania.
Employers and companies looking to hire talent in Tanzania must stay compliant with the local rules and regulations of Tanzania. Tanzania labor regulations apply to mainland territories and the autonomous administrative division of Zanzibar.
This employment law in Tanzania guide traverses the key aspects of the labor regulations in Tanzania to help employers align their hiring and management process with the local rules of this country.
Who is Covered by the Employment Act?
The Employment and the Labor Relations Act of Tanzania provide the legal framework for fair and effective employer-employee relations. The Tanzanian labor law promotes economic development through economic efficiency. It also mentions the minimum standards for working conditions acceptable in Tanzania.
All the employees, irrespective of nationality, are protected by the labor act rules in Tanzania. The Employment and Labor Relations Act of Tanzania covers all employees, including those in the public service of the Tanzanian Government in Mainland Tanzania. However, the employment act does not protect employees working under Tanzania People’s Defense Force, Police Force, Prisons Service, and National Service.
Employers or organizations looking to hire talent must abide by Tanzanian labor law. Companies can always provide better working conditions for the well-being of their employees. However, the working conditions contradicting the mentioned limitations will be considered a violation of the labor code of Tanzania.
An employment contract defines the relationship between an employer and an employee. Labor act rules in Tanzania mention the particulars of the association, like the number of working hours, remuneration, job description, etc.
The Employment and Labor Relations Act of Tanzania recognizes three types of contracts between an employer and an employee:
- A contract for an unspecified period
- A contract for a specific period for the professional and management cadre
- A contract to accomplish a particular task
When an employee begins their employment, the employer is required to provide the following in writing to the employee:
- Employee’s name, age, permanent address, sex
- Location of recruitment
- Job title or job description
- Employment commencement date
- Duration of the contract
- Location of work
- Number of working hours
- Remuneration, its method of calculation, information about any payments or benefits in kind
- And any other information the employer feels is relevant.
Employers must notify the employee in writing if there are any changes in the written particulars. After the employee’s consent, the employer can make the changes.
Suppose an employee is unable to understand the written particulars. In this scenario, according to the labor code in Tanzania, the employer has to explain the particulars to the employee in a way they will understand.
The labor act rules of Tanzania mandate employers to maintain these documents for at least five years after the employee’s termination.
Key Provisions of the Act
The Employment and Labor Relations Act of Tanzania defines the minimum conditions to protect the rights of employees in the workplace.
According to Tanzanian labor law, employers must legally uphold these minimum requirements in the workplace. Employers can also provide a working environment better than the one prescribed in the Employment and Labor Relations Act for the benefit of their employees.
The Employment and Labor Relations Act of Tanzania covers several aspects of a work environment like the working hours, rest period, holidays, minimum wage, etc. Here are some of the critical elements of the labor regulations in Tanzania.
- According to Tanzanian labor law, employees cannot work more than 12 hours daily.
- As per the Tanzanian working hours’ law, a work week can be of maximum:
– Six days a week
– 45 hours a week
– Nine hours a day.
- There can also be a compressed work week agreement according to which employees can have a work week consisting of:
– Five days a week
-45 hours a week
– Working up to 12 hours a day will also include meal intervals
– Not more than 10 hours of overtime
- There can also be a collective agreement for an agreed-upon time where averaging of standard and overtime working hours is allowed.
- In this agreement, the employee cannot work more than an average of:
– Forty regular working hours per week over an agreed period.
– Ten hours of overtime per week calculated over the agreed period.
The labor code of Tanzania does not allow averaging for more than a year.
- Rest between working hours:
– An employee must provide a rest period of 60 minutes to any employee working more than five consecutive hours.
– Only in conditions where it is not possible to leave the work unattended, and there is no other employee to take their position can an employer ask their employee not to take a break.
- Daily rest period:
– Every employee has to receive a minimum of 12 hours of rest every day between ending and resuming a work day.
– This rest period can be reduced to 8 hours if compensated in the next week.
– Employees can reduce the rest period provided a written agreement and the employee stays on the workplace premises. And the ordinary work hours are interrupted by at least 3 hours.
- Weekly rest period:
– An employee will receive a rest day of consecutive 24 hours once every week.
– An arrangement can also be made where the employee works for two consecutive weeks without a break, provided they are given a rest period of 60 straight hours after the two weeks if provided in a written agreement.
– Employers can reduce the weekly resting period to 8 hours if the remaining period is added to the next resting period.
- Night shift:
– A night shift is a working period scheduled after 8 pm and before 6 am. Employees who work the night shift must be paid at least 5% more than the basic wages.
– And if they work overtime, they must be paid at least 5% more than the overtime wages.
- Working on public holidays:
– Employees are not to work on a public holiday.
– However, if they are required to work, they must be paid at least double the basic wages for their work hours.
As per the Tanzanian labor law, employees are not required to work on public holidays that are as below:
- New Year’s Day
- Revolution Day
- Karume Day
- Good Friday
- Easter Monday
- Union Day
- Labor Day
- Eid al-Fitr
- Saba Saba Day
- Eid al-Adha
- Prophet’s Birthday
- Nyerere Day
- Tanzania Independence Day
- Christmas Day
- Boxing Day
The Tanzanian labor law provides various leave schemes for the welfare of employees. The most important are mentioned below:
- Maternity Leave:
– Employees are eligible for maternity leave if they have notified the employer at least three months before the expected date of birth.
– Employees can start their maternity leave in Tanzania four weeks before the expected date of confinement.
– An employee is to resume work for at least six weeks unless they can provide a medical certificate that allows them to work.
– An employer is required to pay wages for 84 days for a single child or 100 days in case of multiple births.
– An additional 84 paid days are to be given to the employee within the leave cycle if the employee’s child passes away within a year of birth.
– An employer is obligated to pay for leaves only for four terms of the employee.
- Paternity Leave:
– A male employee is eligible for a paid leave of 3 days if their spouse is giving birth. They can get this paid leave if they have taken it within seven days of childbirth.
– An employee is also eligible for four days paid leave in case of the passing away of their child, or the death of their spouse, sibling, parent, grandparents, or grandchildren, irrespective of how many of those scenarios occur in a leave cycle.
- Annual Leave:
– Employees are entitled to paid annual leave of 28 consecutive days, including any public holiday that falls within this period.
– Employees can extend their annual leave, but not after six months after the end of the leave cycle and 12 months after the leave cycle ends if the employee agrees.
– The leave period includes the public holidays that may fall during this leave period.
- Sick Leave:
– Employees are entitled to 126 sick leaves in any leave cycle.
– Of these 126 days, 63 days of sick leaves are fully paid, while the remaining 63 are paid half the basic wages.
– An employer is not obligated to pay the employee during their sick leave if they do not provide a medical certificate or if they are to be paid by another law, fund, or a collective agreement.
- The mandatory retirement age for individuals working in Tanzania is 65. Individuals can also opt for early retirement even at 55 years.
- Currently, these formal institutions in Tanzania provide social security services like social health insurance and pension:
– National Social Security Fund (NSSF)
– Public Service Pension Fund (PSPF)
– Government Employees Provident Fund (GEPF)
– Local Authorities Pensions Fund (LAPF)
– Parastatal Pension Fund (PPF)
Apart from GEPF, all the other pension funds operate on a pay-as-you-go benefit basis
- Insured individuals contribute 10% of their basic salary to NSSF, 5% to PSPF, 5% to LAPF, and 10% of their gross earnings to PPF.
- Individuals contributing voluntarily can pay 20% of their declared income, but it cannot be less than 20% of the legal minimum wage.
- To obtain the old age pension at 60, an individual has to make contributions for at least 180 months for NSSF, LAPF, and PSPF and 120 months for PPF.
- There are two retirement benefits: a lump sum amount and a monthly pension. If individuals want both the lump sum amount and the monthly pension, they must at least make contributions for the minimum number of months mentioned. Individuals who haven’t made a minimum number of contributions are only eligible for the lump sum payment.
Payroll taxes & obligations
The financial year in Tanzania runs from 1st July to 30th June. Here are payroll tax obligations for employers as per the Tanzanian labor law –
- NSSF: It is deductible from the employee’s side, where the employers must also pay the same amount on their behalf. The amount to be submitted is 10% of the gross. The employers must complete the submissions to the NSSF within one month of the deduction.
- Skills levy: For a company with more than five employees, the employer must pay 4% of the gross on behalf of the employee.
Further, the employer must register all new employees with the Tanzania Revenue Authority within 80 days of the employment start date. All details regarding the identity, nature of employment, and details about pension & health insurance must be submitted.
Employers can now legally provide employees with online payslips, which must be secure with restricted access. As per the labor code of Tanzania, the payroll reports are required to be kept for at least seven years.
- The minimum wage is the minimum acceptable amount of remuneration an employee can legally receive.
- Employers are required to pay their employees at least the minimum wage, if not more, as per the labor code of Tanzania.
- The minimum wages in Tanzania vary from sector to sector.
- Here is a list of the fourteen sectors and the minimum wages per month acceptable in each sector:
– Mainland -Health Services: TZS 677 (per hour)
– Mainland -Trade, Industries, and commercial services: TZS 115,000 to TZS 400,000
– Mainland -Agricultural Services: TZS 100,000
– Mainland -Fishing and Marine Services: TZS 200,000
– Mainland -Communication Services: TZS150,000 to TZS 400,000
– Mainland -Energy Services: TZS150,000 to TZS 400,000
– Mainland -Domestic and Hospital Services: TZS 40,000 to TZS 250,000
– Mainland -Private Schools Services: TZS 140,000
– Mainland -Transport Services: TZS 200,000 to TZS 300,000
– Mainland -Construction Services: TZS 250,000 to TZS 325,000
– Mainland -Private Security Services: TZS 100,000 to TZS 150,000
– Mainland -Mining: TZS 200,000
– Mainland -Other sectors not mentioned above: TZS 100,000
– Zanzibar: TZS 300,000
- As per the labor code of Tanzania, overtime is allowed in the following scenario:
- It is mentioned in the employment agreement.
- It does not exceed more than 50 work hours in four consecutive weeks.
- Any working day’s working hours do not exceed 12 hours.
- An employer must pay an employee at least 1 ½ times their basic wages for the hours they have worked overtime.
- In a compressed working week, employers can not extend the overtime hours to more than 10 hours a week.
- Notice period: The notice period changes depending on how long an employee has worked with an employer.
– A 7-day notice period if the employee is in the first month of employment.
– A 4-day notice period if the employee worked weekly or daily.
– A 28-day notice period if the employee was employed every month.
– Employers can also provide more time if it is mentioned in the employment contract that it applies to both the employer and employee.
- The Tanzanian labor law states that the employer must provide a written notice to the employee that states the reason for termination and the date on which they have given the notice.
- Severance payment:
– An employer must pay a severance payment if the employee has worked with the employer for 12 months or more and the employer terminated the employee.
– An employer must not pay a severance amount to those employees who were terminated for misconduct.
– As per the Tanzanian employment law for termination, an employer is not obligated to pay severance if the employee was terminated on the following grounds; capacity, capability, or operational requirements of the employer, and if the employee has refused to accept alternate employment with the same or another employer.
– The severance payment is the amount of 7 days’ regular wages for every 12 months the employee has worked with the employer for up to a maximum of 10 months.
- If employee termination takes place at a location other than the location of recruitment, then the employer is required to take either of the following steps:
– Pay for transportation to the location where they were recruited.
– Pay for daily expenses between the date of termination and the date of transportation of the employee and their family to the place of recruitment.
– Transport the employee and their belongings to the location of recruitment.
– An employer must provide a service certificate to the employee after termination.
Data protection and employee privacy
There are no laws or regulations for data protection or privacy in the labor code of Tanzania. But, Article 16 of the Constitution of Tanzania states that every individual is entitled to protect their privacy.
Employers have to abide by the constitution, and therefore they have to follow responsible processes that uphold their employee’s right to protect their privacy.
- As per the Tanzanian labor law, a District Court and a Resident Magistrate’s court have the jurisdiction to inflict a penalty for any offense committed under the Employment and Labor Relations Act.
- Any person who has committed an offense according to sections 5 (prohibition of child labor) and 6 (prohibition of forced labor) of the Act may be liable to the following penalties:
– A fine of not more than five million shillings
– Imprisonment for one year
– Or even both the penalties
- A person who has committed an offense according to sections 7 (prohibition of discrimination in the workplace), 8 (prohibition of discrimination in trade unions and employer associations), and 9 (employee’s right to freedom of association) is liable to a fine of up to five million shillings.
- If a person is found committing an offense according to sections 27 (payment of remuneration), 28 (deduction and other acts concerning remuneration), 45 (3) (obligation to register regarding trade unions, employer associations, and federations), and 101 (confidentiality) will be liable to a fine up to one million shillings.
Compliance Strategies for Employers
Employers and global companies looking to hire talent from Tanzania must abide by the Tanzanian labor law. Here are some of the compliance strategies employers can apply for successful operations.
- Following standard templates:
– The labor code of Tanzania has provided guidelines on creating employment contracts and what particulars must be presented in written form to the employee.
– Employers can follow the templates and draft employment contracts compliant with the Employment and Labor Relations Act of Tanzania.
- Recruiting an HR manager:
– An employer can hire an HR manager to comply with the Tanzanian labor law and other local regulations while hiring and managing employees from Tanzania.
– An HR manager can look after processes like employee training, employee benefits, development, training, etc., and ensure that they are within the labor code of Tanzania.
- Outsourcing to a separate firm:
– Some third-party firms look after labor documents, compliance audits, drafting legal documents, managing payroll, looking for benefits, etc.
– These firms also protect you from legal liabilities by complying with the labor regulations in Tanzania.
– Employers can also work with these firms to hire and manage talent from Tanzania.
Recent Changes in the Tanzanian Employment Law
The Government of Tanzania introduced new labor legislation to keep up with the employment standards. The Government Notice 47 of 2017 keeps a note of these new legislations.
- Previously employment contracts with professionals and managerial cadre. However, now these employment contracts must be for more than 12 months were not specified.
- Earlier female employees had the right to leave the workplace to breastfeed their children at their convenience for two hours. However, the time frame for how many days they could leave was not specified. The new legislation states that female employees can consecutively leave the workplace for two hours at their convenience for six months after the end of their maternity leave.
How Can Multiplier Help?
Currently, Tanzania is working towards economic development, and the private sector is at the heart of this development. Therefore it is an excellent time to hire talent from Tanzania. However, employers looking to hire and manage employees in Tanzania are required to comply with the local rules and regulations.
Multiplier provides global employment solutions and products that help employers comply with the labor code of Tanzania. Multiplier helps firms draft legal documents and manage payroll, taxes, employee benefits, etc., while working with talent here.
The team at Multiplier helps employers and companies stay compliant with the local rules and regulations of 150+ countries and provides easy solutions for risk-free onboarding and employee management.