Senegal is a West African country with a developing economy that currently centers around agriculture, fishing and mining. However, the country is making significant progress in diversifying its economy, particularly in the areas of infrastructure, energy and services. Senegal has tracked average GDP growth of 6% in recent years, driven by public investments in infrastructure, private sector growth and foreign direct investment (FDI). As a result, the country is rapidly earning a reputation on the world stage as an attractive destination for multinational companies seeking to expand and tap into new markets in Africa.
Why Senegal?
- Access to West Africa: Senegal’s strategic location on the western coast of Africa makes it an ideal gateway to other West African markets. The country is a member of the Economic Community of West African States (ECOWAS), which provides access to a regional market of over 350 million consumers.
- Favorable business climate and investment incentives: Senegal offers various investment incentives, such as tax exemptions, free zones and subsidies for investment. In addition, the country has implemented reforms to improve the investment climate in the energy sector, such as the adoption of a new electricity code and the development of a regulatory framework for renewable energy.
- Skilled, innovative workforce: Senegal has a large and relatively well-educated workforce, with the country’s institutions ranking highly for innovation according to the Global Innovation Index.
- Cost-effective operations: The cost of labor in Senegal is also relatively low compared to other countries in the region, according to data from the International Labour Organization, which makes it an attractive location for hiring and sourcing workers.
- A promising future: Senegal’s government has also launched the Plan Sénégal Émergent (PSE), which aims to accelerate economic growth and create job opportunities through investments in priority sectors such as agriculture, energy, infrastructure and tourism.
Where do labor laws in Senegal come from?
The key legal frameworks governing employment relationships in Senegal include:
- The Labor Code: This is the main legal framework that regulates employment relationships in Senegal. It was established by Act 97-17 of 1 December 1997 and governs the rights and obligations of both employers and employees. The Code covers a wide range of issues, including working hours, rest periods, minimum wages, health and safety, and termination of employment.
- National Interprofessional Collective Agreement: This is a collective agreement that governs the terms and conditions of employment for all employees in Senegal, regardless of the sector of activity. It is negotiated between the government, employers’ organizations and trade unions. It covers issues such as minimum wages, working hours and social security.
- Collective agreements: There are collective agreements specific to various sectors of activity in Senegal, such as agriculture, construction and transport. These agreements are negotiated between employers’ organizations and trade unions that represent workers in the respective sectors. They govern the terms and conditions of employment that are specific to each sector, such as wages, working hours and occupational health and safety.
Who enforces labor laws in Senegal?
The Ministry of Labor, Social Dialogue and Professional Organizations is responsible for enforcing labor laws in Senegal. The Ministry has the authority to investigate complaints of labor law violations and to take enforcement action against employers who violate labor laws.
In addition, workers can seek redress for labor law violations through the courts or by filing complaints with the Ministry or the relevant sectoral labor inspectorate.
What should MNCs know about employment contracts?
Senegal allows both oral and written employment contracts but, in practice, only written contracts can be registered. This is because the country’s laws mandate the registration of all employment contracts. Therefore, it is highly recommended that contracts be put into writing. To be legally binding and registered, employment contracts must be written in French.
If an employment contract is for a fixed term, it also must be in writing. If it is not in writing, it will be considered to be for an indefinite period.
Are probation periods allowed?
In Senegal, the maximum length of probation for employees, including renewals, is six months.
For employees paid monthly, the probation period varies based on their job position. General employees, supervisors, technicians and similar workers have a probation period of one month, which can be renewed once.
Managers and executives, on the other hand, have a probation period of three months, which can also be renewed once.
For workers who are paid by the hour, the probation period is eight days. This can be renewed once.
How does overtime work?
In Senegal, “overtime” refers to any work done beyond the regular working hours, as defined by the law or by the contract.
Overtime pay is calculated based on the hourly wage and specific rates as follows:
- For overtime work during the day, the first eight extra hours are paid at a rate of 15%. Any additional extra hours beyond eight are paid at a rate of 40%.
- For overtime work during night hours, any extra hours are paid at a rate of 60%.
- For overtime work on weekends or public holidays, any extra daytime hours are paid at a rate of 60%. Any extra night-time hours are paid at a rate of 100%.
What are some of the basics an MNC should know about termination in Senegal?
Here are the main provisions for terminations in Senegal:
- To terminate a permanent employment contract, the employer must provide written notice to the employee, stating the grounds for termination. Alternatively, the employer can pay compensation instead of providing notice.
- Severance pay is mandatory under the law, except in cases of severe negligence where the employer can terminate the contract without notice. However, a court will evaluate the severity of the fault, and the burden of proving the validity of the reason for termination lies with the employer in case of a dispute.
- Unfair dismissal may result in a damages penalty, in addition to the termination indemnity.
- Dismissal of an employee on maternity leave is not allowed and approval from the Labor Inspector is necessary before dismissing workers’ representatives.
- For fixed-term contracts, termination before the end of the term is only possible in cases of severe negligence, written agreement by both parties, or force majeure (unforeseen circumstances that make it impossible to fulfill the terms of the contract).
What are some of the barriers MNCs face in setting up and hiring in Senegal?
Although Senegal presents many opportunities for MNCs looking to expand, there are also challenges and risks to consider when hiring and doing business in the country:
- Compliance with labor laws: Senegal’s labor laws are complex and constantly evolving, making it challenging for MNCs to navigate the regulatory landscape. Non-compliance can lead to legal and financial penalties.
- Language barriers: French is the official language of Senegal, and employment contracts and other legal documents must be in French to be legally binding. This language barrier can create difficulties in communication and increase the risk of misunderstandings and legal disputes.
- Cultural differences: Senegal has its own unique culture and customs, which can be challenging for foreign companies to navigate. Failure to understand and respect local cultural norms can lead to misunderstandings and conflict in the workplace.
- Unions: Senegal has a strong labor union tradition and unions can play an important role in the workplace. MNCs may need to navigate complex union relationships and negotiate collective bargaining agreements, which can be cumbersome.
- Employee turnover: Senegal has a relatively high employee turnover rate, which can create challenges for MNCs trying to establish a stable and reliable workforce.
Why are some MNCs turning to the Employer of Record (EOR) model for hiring in Senegal?
By partnering with a local EOR, such as GoGlobal, an MNC can overcome the challenges of establishing a company and managing payroll across borders. The arrangement can also help companies mitigate the risks, requirements and limitations that typically accompany hiring in Senegal – while still giving them seamless access to the country’s innovative, up-and-coming workforce.
How does GoGlobal help MNCs thrive in Senegal?
GoGlobal is a people-first international HR and EOR service provider in Senegal. We understand that human-to-human connections are essential throughout the hiring process, which is why our people are involved in every step of the HR journey.
Our team members on the ground in Senegal are experts in navigating the country’s unique regulatory environment. We also have a deep understanding of local cultural customs and can provide your workers with services in their preferred language and time zone, ensuring a positive experience for everyone involved.
As the labor market in Senegal becomes more competitive, many MNCs turn to our Recruit & Hire solution to pair with our EOR services, especially for hard-to-fill positions such as technology, sales and customer service. This solution helps you secure top talent while giving you control over the entire hiring process – a truly an end-to-end HR experience.
When you partner with GoGlobal, you can confidently test the market, focus on your core business development needs and build a strong team in Senegal – all while minimizing risk and enjoying peace of mind.
GoGlobal has a significant on-the-ground footprint in Africa, maintaining local offices across 18 countries spanning from North Africa to Sub-Saharan Africa. This extensive on-the-ground footprint empowers GoGlobal to offer exceptional assistance to clients in expanding their operations and building successful teams across Africa.
Find additional details on benefits and hiring in Senegal or contact us to talk with an international HR expert.