Compensation

Overtime Compensation

The normal hours of work are 8 hours a day and 48 hours a week. The Labour Proclamation defines "normal hours of work" as the time during which a worker actually performs work or avails himself for work in accordance with law, collective agreement or work rules. Working hours may be reduced without reduction in worker's wages, on Minister's directives, for economic sectors, industries or occupations where there are special conditions of work. Hours of work are spread equally over the working days of a week. However, if the nature of work so requires, some of the working days can be shortened while in other days, working time can be increased to the limit of 10 hours a day. Normal working hours are not applicable to commercial travelers or representatives unless otherwise specified in a collective agreement or work rules.

Overtime is the work done in excess of the normal daily hours of work. A worker may not be compelled to work overtime except in case of accident (actual or expected), force majeure, urgent work, or substitution of absent workers assigned on work that runs continuously without interruption. Overtime work may not exceed 2 hours in a day or 20 hours in a month or 100 hours in a year. If a worker works beyond the stipulated working hours during the week days, i.e., 8 hours a day and 48 hours a week, he/she is entitled to an overtime premium as follows:

- 125% of normal hourly rate for overtime work between 06 a.m. to 10 p.m.;

- 150% of normal hourly rate for overtime work between 10 p.m. to 06 a.m.;

- 200% of the normal hourly rate for work on a weekly rest day; and

- 250% of the normal hourly rate for work on a public holiday.

Source: §61-68 of the Labour Proclamation No. 377/2003 (amended by Proc. No. 466/2005 & Proc. No. 494/2006) 

Night Work Compensation

In accordance with the Labour Proclamation, night work is the work done between 10 p.m. and 06 a.m. There is no specific provision in the Labour Proclamation, which requires employers to make premium payments to the night workers. Higher payments are available only to the workers working overtime during night hours. If night hours are overtime hours, worker has to be paid 150% of the normal hourly wage rate.

Source: §68 of the Labour Proclamation No. 377/2003 (amended by Proc. No. 466/2005 & Proc. No. 494/2006) 

Compensatory Holidays / Rest Days

Workers may be required to perform work on a weekly rest day or public holiday to avoid serious interference caused by accident (actual or expected) or force majeure or urgent work.

A worker is compensated monetarily if his/her contract of employment terminates before the compensatory holiday is granted. There is no provision for compensatory holiday for the workers working on a public holiday.

Source: § 71 of the Labour Proclamation No. 377/2003 (amended by Proc. No. 466/2005 & Proc. No. 494/2006) 

Weekend / Public Holiday Work Compensation

Workers may be required to work on weekly rest days and public holidays. In such circumstances when employees have to work on official/public holidays, they are entitled to receive wages at a premium rate of 200% of the normal hourly wage rate. However, there is no premium pay for the workers working on weekly rest days.

Source: § 75 of the Labour Proclamation No. 377/2003 (amended by Proc. No. 466/2005 & Proc. No. 494/2006) 

Regulations on Compensation

  • Labour Proclamation No.377/2003 / የአሰሪና ሰራተኛ ዓዋጅ ቁ. 377/2003
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