New legal provisions redefining employer-employee labour relations have been introduced by the 2015 supplementary finance act (loi de finances complémentaire), hereinafter “the 2015 LFC”. This act, published in Official Journal No. 40 of 23 July 2015, has amended law No. 90-11 on labour relations, hereinafter “law No. 90-11” and also introduces changes concerning the employment of foreign workers and workers affiliation to the national insurance fund (CNAS), as well as social security contributions payments.
The key measures relating to labour relations can be summarised as follows:
1- Amendments to law No. 90-11
Penalty for recruitment that does not comply with the statutory age obligation
Article 54 of the 2015 LFC amended and supplemented the provisions of Articles 140 and 149 of law No. 90-11.
Under the new legislation, save for cases of apprenticeship contracts drawn up in accordance with the prevailing legislation, any recruitment of a worker who has not reached the statutory age shall be punishable with a fine of DZD 10,000 to 20,000.
This penalty has been toughened, having been increased tenfold from its previous amount, which ranged between DZD 1,000 and 2,000 prior to publication of the 2015 LFC, and which seemed derisory and did not appear to act as a deterrent.
As a reminder, in accordance with Article 15 of law No. 90-11, the minimum age of recruitment may not under any circumstances be less than sixteen, except within the framework of apprenticeship contracts drawn up in accordance with the prevailing regulations.
Penalties concerning remuneration below the SNMG
In addition to the penalties mentioned above, under Article 54 of the 2015 LFC, any employer paying an employee a wage less than the national minimum wage (SNMG), or a wage set by collective agreement, shall be punishable with a fine of DZD 10,000 to 20,000.
For cases of repeat offences, the penalty is between DZD 20,000 and 50,000, multiplied by as many times as there are workers affected.
The penalties listed in this article have also been increased tenfold from the previous penalties.
2- Concerning the employment conditions of foreign workers
In terms of issuing of work permits and temporary work authorisations
Note that Article 30 of the 2015 LFC increased the tax for the issue of temporary work authorisations and work permits to foreign nationals. The justification for this increase would be the increased cost of processing applications and the growing number of applications to be processed.
This stamp duty, previously DZD 5,000, is now DZD 10,000, and must be paid at the tax revenue office.
The 2015 LFC states that this charge is DZD 1,000 in the case of foreign female spouses of Algerian citizens.
Renewing these documents also entails payment of a surcharge of 50% of the amounts indicated above.
The 2015 LFC lists three categories that are not subject to the stamp duty for the issue and renewal of work permits and temporary work authorisations, as follows:
- foreign workers not subject to temporary work authorisations and work permits under a treaty or convention concluded between Algeria and the government of the foreign worker’s country of origin;
- foreign workers with refugee or stateless person status;
- foreign workers who are on secondment or a short-term assignment of a maximum of three months in the year.
- Penalties for failure to hold a work permit:
Article 55 of the 2015 LFC, amending Article 19 of law No. 81-10 of 11 July 1981 on the employment conditions of foreign workers, hereinafter “law No. 81-10”, provides for an increase in the penalties for offenders that employ a foreign worker who is required to hold a work permit or temporary work authorisation and who, pursuant to the aforesaid law No. 81-10:
- does not carry such documents;
- is in possession of an expired document;
- is employed in a function other than that stated on such documents.
These penalties now range between DZD 10,000 and 20,000 per established infringement rather than, as previously (before publication of the 2015 LFC), between DZD 5,000 and 10,000.
These amounts have therefore been doubled.
- Penalties for failure to forward the notice of termination of the employment contract or of the annual nominal statement of foreign employees:
Fines relating to employers’ failure to forward the notice of termination of the employment contract or the annual nominal statement of foreign workers within the deadlines laid down by law No. 81-10 have been increased fivefold. Prior to publication of the 2015 LFC, they ranged between DZD 1,000 and 2,000 and they have now been increased to between DZD 5,000 and 10,000.
These penalties will still be doubled for repeat offences.
3- Concerning CNAS affiliation and payment of social security contributions
Penalty for failure to affiliate workers and other new regularisation measures
- Penalties for failure to affiliate workers:
One of the key measures concerns the penalties incurred for employers’ failure to affiliate employees, which have been increased and toughened. Until now, an employer at fault was only subject to a penalty of DZD 1,000 per unaffiliated worker, increased by 20% per month of delay.
Now, any employer that has not affiliated its employees within the prescribed periods will be liable for a fine of DZD 100,000 to 200,000 per unaffiliated worker, and/or a prison sentence of between two and six months1.
In the case of repeat offences, the 2015 LFC provides that employers will be liable for a fine of DZD 200,000 to 500,000 per unaffiliated worker and a prison sentence of between two and twenty-four months.
However, these provisions do not apply to employers who wish to regularise their status with regards to the CNAS and who, within sixty days of the date of publication of the 2015 LFC, affiliate all undeclared workers that they employ.
If they affiliate workers within this period, they will be granted exemption from any late penalties or surcharges, as from payment of the principal contributions due.
- Other regularisation measures: “the payment schedule”
A further payment facility is offered to employers owing payments to the CNAS, as well as to self-employed workers, who are therefore liable for social security contributions.
The 2015 LFC allows those submitting an application for a payment schedule for past contributions to the competent social security organism before 31 March 2016 to be exempt from late payment penalties and surcharges following payment of the final instalment due.
To benefit from this payment schedule, outstanding social security contributions must be paid.
Failure to comply with the payment schedule for contributions due leads to loss of the right to exemption from late payment surcharges and penalties.
As outlined by the Minister for Labour, Employment and Social Security2, these payment schedules are designed to make it easier for companies to pay their debts in terms of social security contributions dues.
The collection exercise that will be conducted in 2015 will aim to boost social security fund reserves significantly.
Another key measure of this 2015 LFC provides that any person actively employed, who is not subject to social security contributions, may voluntarily affiliate themselves up to social security through the employee scheme, in order to access the maternity and health insurance benefits in kind, by paying their own monthly contribution at a rate of 12%, using a tax base whose amount is equal to the SNMG, i.e. an amount of DZD 2,1603.
The same article stipulates that these provisions shall apply for an interim period not exceeding three years, which allows the beneficiary time to formalise, via any legal means, their work or employment status, in order to qualify for social security contributions.
The article also stipulates that any declaration of liability for social security pursuant to the provisions of Article 60 entitles the person concerned to a pension contribution buy-in, at the beneficiary’s cost, within the interim period cited above.
In accordance with Article 61 of the 2015 LFC, the dependants of persons actively employed and voluntarily affiliated to the CNAS may also receive maternity and health insurance benefits in kind.
Consequently, these persons without social security liability status will simply need to contact the CNAS in order to pay their contributions for an interim period of three years, and they will thus benefit from social security coverage for themselves and their family.
As indicated by the Director-General of Social Security at the Ministry for Labour, Employment and Social Security4, these voluntary membership measures are designed to “encourage people working in the informal sector, estimated to be around one million, to voluntarily be affiliated to social security in order to benefit from social security coverage for themselves and their dependants”.
The Director-General also stated that the impact of these measures, in terms of collecting contributions, may exceed two billion dinar annually. He added that these new measures will make Algeria a pioneer country in the area of extending social security protection to the informal sector.
1 Article 59 of the 2015 LFC
2 Source: www.aps.dz (dated 1 March 2015)
3 Article 60 of the 2015 LFC
4 Source: www.aps.dz (dated 19 August 2015)