Legal Update – Workers’ Retirement and Social Security Law No. 18 of 2023
Update: The Workers’ Retirement and Social Security Law No. 18 of 2023 (“Law”) has been issued in Iraq in 109 articles, to come into effect on 26 November 2023. The following are the most prominent provisions the Law regulates:
Who is included:
The provisions of the Law apply to workers in the mixed, private, and cooperative sectors and to self-employed workers who are covered by the provisions of the Labor Law
and workers in state departments and the public sector who are not permanently employed.
The provisions of the Retirement Security Branch [only] apply to Iraqi workers working outside Iraq according to their choice, without prejudice to the provisions of international and Arab labor agreements that regulate cases of double inclusion in social security provisions.
The provisions of the Social Security Branch [only] apply to:
- Self-employed workers and employers.
- Workers in unorganized work.
- Members of the employer’s family (husband, wife, children, ascendants and descendants) who work in his projects.
- Iraqi workers for diplomatic bodies, organizations and companies operating in Iraq.
Divisions of the Coverage
The branches of retirement and social security consist of the following:
First: Retirement and death security.
Second: work injuries, illness and occupational diseases security.
Third: unemployment benefits security.
Fourth: voluntary retirement security and workers in unorganized work security.
Fifth: Health insurance, social services, and benefits for working women (Maternity insurance).
The Law distributes the contribution sharing as follows:
- (5%) Five percent is deducted from the total amount received by the insured worker as wages and allowances, which shall be allocated to the account of the Retirement Security Branch.
- The percentage of employers’ contributions for their insured workers is determined as follows:
- (12%) Twelve percent of the total wages and allowances received by the worker.
- (25%) Twenty-five percent of wages paid by employers in the private and mixed sectors, those who engage in commercial activity whose profits result from the sale of oil and other hydrocarbon materials produced in and exported from Iraq, or the sale of rights and interests related to crude oil or other hydrocarbon materials.
- The state contributes a percentage of (8%), eight percent of what the worker receives in terms of wages and allowances and is deposited in the Fund. The forgoing item 2 and foreign workers in Iraq are excluded from this contribution by the state, as the employer bears the percentage of the state’s contribution in addition to his contribution.
The employer has the right to pay the contributions due from him and his workers to the Fund within (30) thirty days of the month following the entitlement, and in the event of delay for a period exceeding (120) days in payment, a fine shall be imposed on the employer equivalent to (1%) one percent of the subscription amount for each month of delay, provided that it does not exceed 100% of the principal amount.
The employer must inform the department of the employee’s appointment within (30) thirty days from the date of employment.
Ownership is not transferred, permits or professional licenses are not granted, registered, renewed, rented, or otherwise any other legal action for any company, laboratory, factory or entity employ one or more workers except after obtaining a clearance certificate from the social security department.
The financial departments in the State, whether directly attached to the public treasury or independent ones, are obligated to refrain from disbursing any entitlement to an employer, contractor or investor unless he is proven cleared by the department according to an official document issued by the department.
Filing and Update Requirements
Employers covered by the provisions of the Law are obligated to submit to the Social Security Department all data that includes the names of the insured workers, their dates of birth, their wages, as well as their trainees’ according to forms prepared by the department for this purpose, provided that these data are identical to employers records that they shall maintain in accordance with the Labor Law and Subscriptions shall be calculated accordingly.
The employer is obligated to submit, at the beginning of each year, annual statements specifying the name of the project, its place of work, the name and full address of the employer, along with a statement of the number of insured workers, their names, dates of birth, full addresses, the amount of their wages, the amount of subscriptions due from them, and the subscription amount due from the entity that employs them, in accordance with the forms provided by the social security department; any amendments must be reported.
The department shall issue a document called (a security document) that confirms the subscription of the worker. Its form, the information that must be included in it, and the method of circulation and use shall be determined by instructions.
Issued by the Minister of Labor.
Any employer who does not cover his workers with the social security system in Iraq shall be punished with a fine of no less than (1,000,000) one million Iraqi dinars and not more than (5,000,000) five million Iraqi dinars. The same applies to employers reporting/covering a number less than their actual workforce. The social security department shall be entitled to compensation for unpaid subscriptions equal to fifth times its value.
Any worker colluding with the employer shall be deprived of security rights for the period of abstention from paying his subscription to the department.
- The Department’s Inspection Section shall monitor the security inspection.
- The fixed pension salaries of workers shall be amended to become (500,000) five hundred thousand dinars in lump sum. The retired worker has the right to submit a request to the department to calculate his retirement salary in accordance with the new provisions of the Law. The department’s Board shall be entitled to reconsidering the amount of the lump sum salary in cases of inflation.
- The worker has the option of filing a lawsuit regarding issues arising from the application of the provisions of the Law or the Labor Law before the court in which his place of work, or the domicile or headquarters of the defendant is located.
- A (work fee) is imposed on the employer in the amount of (2,000,000) two million Iraqi dinars for every foreign worker entering Iraq.
- The employer is obligated to pay a fee of (750,000) seven hundred and fifty thousand Iraqi dinars for each foreign worker after his legal status has been adjusted/regulated. Provided this happens during this year.
- Any text that conflicts with the provisions of the Law shall not be implemented. The provisions of the Labor Law shall apply to all matters not stipulated in the provisions of the Law.