How to Hire Remote Employees In 

Algeria

The Basics

Currency
Algerian Dinar (DZD)
Employer Taxes
26%
Payroll Frequency
Monthly
Official Language
Arabic

Employment in 

Algeria

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Algeria

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Algeria can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Algeria, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Algeria.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Algeria is not the same as paying workers in your own country. Employees have to be paid using Algeria’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Algeria

 Specific Information

Working Hours

The working week typically runs from Sunday to Thursday and the maximum prescribed working hours for an employee is 40 hours per week (based on a five day week) and eight hours per day (exclusive of a one hour break).

Friday is the statutory day of rest each week.

Women are not permitted to work between 9pm and 5am unless specific exceptions are granted by the Labour Inspectorate where the nature of the activity/job role requires.

Overtime

Employees may only be required to work overtime by their employer in exceptional circumstances, for example where it is crucial to ensure the completion of a piece of work or project.

Overtime hours must not exceed 20% of the maximum working hours (i.e. eight hours per week) and an employee must not be required to work more than a total of 12 hours per day.

Where an employee is required to work additional hours, they are entitled to overtime pay, of a minimum of 150% of the normal hourly wage. If circumstances require the employee to work on their weekly day off, they must be granted another day off (in lieu) and 150% off their wage for the overtime period.

By law, no employee can be forced to work overtime for more than 8 hours a week. Employees working overtime are entitled to an extra payment of at least 50% of their regular hourly pay.

Payroll Tax

Employer

Employer

  • Social Security
  • Illness
  • Unemployment
  • Work accidents

Minimum Wage

The minimum wage is fixed at 18,000 dinars. However, in May 2020, the government increased the basic pay rate to 20,000 Algerian dinars, which is almost equal to $170.

Payroll

Pay Cycle

Employees in Algeria receives monthly wage.

13th Salary

No Info.

Leave

Paid Time Off (PTO)

PTO is calculated by the:

  • Employees should also receive 30 days of paid annual leave that they accumulate over 12 months.

Public Holidays

There are 10 public holidays.

Sick Days

Employees are entitled to sick leave usually paid for from the day of illness.

Sick leaves are provided where employees receive a portion of their salary during the first 15 days of absence due to illness.

This increases after 16 days of sickness, or if the employee is admitted to the hospital.

Maternity Leave

Mothers who must stop working because of pregnancy are entitled to a daily indemnity of 100% of the daily salary for their position (average of the actual salary), for a maximum of the  subsequent 14 weeks. The mother must stop working at least one week before confinement.

To obtain these benefits and indemnities, a registered doctor or qualified medical auxiliaries must have assisted at the birth. During the first six months, employees are entitled if they worked at least:

  • nine days or 60 hours during the three preceding months; or
  • 36 days or 240 hours during the 12 preceding months

Paternity Leave

Male employees can take up to three days of paid emergency leave for the birth of a child.

Parental Leave

Female workers may take part-time paid parental leave for up to 18 weeks, in this case they will receive 50% of maternity benefits and 50% of their wages.

Other Leave

Jury Duty Leave and Voting Leave (Leave due to Public Interest) - Not specified by law.

Military Leave -Not Specified by law.

Marriage Leave

Employees are entitled to three days' paid leave.

Bereavement Leave

Employees are entitled to three days' paid leave.

Termination

Termination Process

Employers must provide notice of dismissal absence and serious misconduct by the employee.

The notice period is six months (or up to 12 months for skilled employees), plus five days for each year of service up to a maximum of 30 days.

Employees should get compensation in cash if they are dismissed, for several reasons.

  • They have worked for the company for at least two years.
  • If they are terminated for reasons other than misconduct

Notice Period

The notice period is equal to the trial period duration, plus five days per year for the number of years you have been working in the company.

Severance Pay

The Severance Pay in Algeria depends on the Duration of Employment:

Severance Pay (Layoff)                           

Mandatory -1 month

Collective Agreement - 1 month

Minimum Employment Period - 12 months

Probation Period

Probation period is 6 months.