Iraq new Workers’ Retirement and Social Security Law “RSS Law”

We are monitoring the enactment of the new Workers’ Retirement and Social Security Law, “RSS Law,” that was recently voted on by the Iraqi parliament and is yet to be published in the official gazette for full entry into force. A formal copy of the RSS Law has not yet published on the Iraqi Parliament website, and we are in the process of obtaining one.

From our follow-up, and in accordance with what the parliament media office announced, the RSS Law shall constitute an important turning point towards protecting the segment of workers in the private sector and guaranteeing their rights through certain new provisions including:

1. Establishing a developed retirement formula, re-calculating service for retirees who left before the law was passed and including them therein,
2. Allowing the possibility of purchasing a service for workers who do not have a period of service that qualifies them for retirement,
3. The possibility of any Iraqi to obtain voluntary retirement coverage, which concerns the freelance worker, whereby the subscription rate from 5 and up to 15 percent to guarantee basic retirement coverage; this is for workers who do not have an employer, i.e. not affiliated with a company and work as a freelancer so they can choose the level of coverage according to their profession and that the government will pay the difference in coverage requirement of the pension contributions.
4. Transferability of the pension for partial disability to the successor (heirs) upon the death of the retiree,
5. Granting cost-of-living allowances annually and linking it to inflation and increasing the pension salaries of insured workers by a decision of the Council of Ministers.
6. Special provisions regulating women working in the private sector, including paid pregnancy and childbirth leave.

In addition to the foregoing, the Minister of Labor stated in a workshop held in Baghdad Saturday 21 May 2023 that the RSS Law contains the following featured rights to workers:

1. Government supports pension contributions to the organized sector by 8%, so that the total retirement contributions amount to 25%.
2. The broadest segment of workers will have a retirement salary, as the government will pay the pension contributions at a rate of up to 15%, i.e. three times what the worker pays for his own coverage, which is called (the optional coverage).
3. Increase in the salaries of retired workers by about 100,000 dinars, so that the minimum pension for a worker is 500,000 dinars.
4. Expanding the umbrella of coverage by adding the voluntary retirement branch and guaranteeing workers in unorganized work for broader protection for workers and non-workers due to their inclusion in the provisions of the RSS Law,
5. adding labor service in the government sector for the purposes of allowance, promotion and retirement,
6. the inclusion of a retirement formula that guarantees a retirement salary that provides stability for those covered by the provisions of the law, which is equal to the retirement formula for public sector employees.
7. The state’s support for workers covered by social security by paying (8%) of the wages and allowances of workers in organized work and (15%) of the wages of workers in unorganized work, which contributes to the financial sustainability of pensions and the sustainability of the fund,
8. granting allowance to employers to pay the contributions within a period of (90) days instead of (30) days, with the suspension of late fines to a limit of (200%) instead of continuing without a limit.
9. Applying electronically automated all aspects of it within a period not exceeding one year from the date the RSS Law comes into effect,
10. the possibility of returning the end-of-service gratuity amounts that the workers had previously benefited from in order to re-include them in the retirement coverage, and that the service be calculated for retirement purposes, while reducing the percentage of entitlement to the disability salary from a disability rate of 35% or more to a disability rate of (30%) and more,
11. the addition of the unemployment coverage branch by granting salaries by the authority to the worker who was laid off from work for a reason beyond his control.
12. Granting the insured female worker pregnancy and childbirth leave with a full pay,
13. providing health insurance for insured workers through retirement with solid insurance companies and in coordination with the Ministry of Health to provide all health services for insured workers,
14. To adjust the salaries of retirees before the law comes into force according to a mechanism to be prepared by the department.

The RSS shall enter into force 90 days after its issuance in the Official Gazette, which should be around August 2023.