How to Hire Remote Employees In 

Morocco

The Basics

Currency
Moroccan Dirham (MAD)
Employer Taxes
21.09%
Payroll Frequency
Monthly
Official Language
Arabic

Employment in 

Morocco

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 

Morocco

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 Morocco can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Morocco, 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 Morocco.

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 Morocco is not the same as paying workers in your own country. Employees have to be paid using Morocco’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.

Morocco

 Specific Information

Working Hours

Working hours for employees shall not exceed 8 hours a day or 44 hours a week.

Overtime

For additional hours between 6 a.m. to 9 p.m. employees will receive 125% their normal rate, 150% their normal rate from 9 p.m. to 6 a.m., and 150%-200% their normal rate for work done on one of the weekly holidays.

Payroll Tax

Employer

Employer

  • Family Benefits
  • Short Term Social Benefits
  • Long Term Social Benefits
  • Health Insurance
  • Professional Training Tax
  • * Social Solidarity (only for companies with annual net profits of 5 million to 40 million MAD)
  • ** Social Solidarity (only for companies with annual net profits over 40 million MAD)

Minimum Wage

Morocco minimum wage policy is 2828.71 dirhams per month.

Payroll

Pay Cycle

Hourly workers should be paid at least twice a month and salaried employees should be paid monthly.

13th Salary

There is no law requiring a 13th salary.

Leave

Paid Time Off (PTO)

PTO is calculated by the:

  • After six months of continuous service, an employee begins earning 1.5 days of leave per month giving employees 18 days of annual leave.
  • The duration of paid annual leave is increased by one and a half days every 5 years until a maximum of 30 days annual leave is reached.

Public Holidays

There are 12 public holidays.

Sick Days

The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:

  • Employees are entitled to 4 days or 8 half days of paid sick leave annually.
  •  If the absence lasts more than four days, the employee must inform the employer of the probable duration of absence and provide a medical certificate justifying the absence.
  • An employer may have an employee resign if they miss more than 180 consecutive days during a period of one year due to sickness.

Maternity Leave

Pregnant employees receive 14 weeks of maternity leave, 7 of which must be used after birth.

Paternity Leave

Fathers receive 3 days of leave within the first month of the child’s birth.

Parental Leave

There is no parental leave apart from maternity and paternity leave.

Other Leave

Leave for Circumcision: 2 days

Leave for surgery on the spouse or dependent child: 2 days

Marriage Leave

The employee: 4 days

child of the employee or of a child from a previous marriage of the employee’s spouse: 2 days

Bereavement Leave

Spouse, of a child, of a small child, of an ascendant of the employee or of a child from a previous marriage of the employee’s spouse: 3 days

Brother, a sister of the employee, a brother or sister of the employee’s spouse or an ascendant of the spouse: 2 days

Termination

Termination Process

In order to terminate an employee, an employer must have sufficient reasons and provide notice.

Notice Period

The notice period in Morocco is:

For executives and similar positions:

  • Less than 1 year – 1 month
  • 1 year to 5 years – 2 months
  • More than 5 years – 3 months

For employees:

  • Less than 1 year – 8 days
  • 1 year to 5 years – 1 month
  • More than 5 years – 2 months

Severance Pay

The employee in the contract is entitled to compensation in the event of dismissal after 6 months of work in the same company.

The amount of the termination indemnity for each year or fraction of a year of actual work is equal to:

  • 96 hours of salary for the first five years
  • 144 hours of salary from 6 to 10 years
  • 192 hours of salary from 11 to 15 years240 hours of salary for the period exceeding 15 years.

The termination indemnity is calculated on the basis of the average wages received during the fifty-two weeks preceding the termination of the contract.

Probation Period

All employment begins with a 1-week trial period.

Probation periods are set at:

  • 3 months for executives and the like
  • 1.5 months  for employees
  • The trial period can be renewed once.

The trial period with regard to fixed-term contracts may not exceed:

  • 1 day per working week within the limit of 2 weeks if the contract is less than six months
  • 1 month for a contract lasting more than 6 months.