To streamline your business growth in Nigeria, consider partnering with a trusted global Employer of Record (EOR) like Gloroots. Our experts specialize in employee onboarding, payroll management, and ensuring compliance with Nigeria's diverse rules and regulations. This collaboration allows you to focus on your core business while we handle the complexities of employment and legal compliance in Nigeria.

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Building a successful team involves finding the right talent at the right moment and for the right roles. In Nigeria, managing compliance, payroll, taxes, and benefits can be a complex task for employers. The intricacies of Nigeria's employment regulations can make staying compliant a real challenge.

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This is where Gloroots,with our global Employer of Record (EoR) service, comes in. With Gloroots, you can offload the burdens of payroll, tax, benefits, and compliance, allowing you to focus on what truly matters: your employees and the growth of your company. We've got the complexities of employment regulations covered, ensuring you have a seamless experience as you expand your business in Nigeria.

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In Nigeria, "misclassification of employees" occurs when employers incorrectly classify their workers. This could involve labeling a worker as an independent contractor or excluding them from specific employment laws and benefits, even when they should rightfully be considered employees entitled to legal protections and benefits.

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Choosing a PEO/EOR like Gloroots in Nigeria helps mitigate the risks associated with employee misclassification. These experts ensure compliance with labor laws, proper worker classification, accurate payroll management, and comprehensive benefits, allowing businesses to focus on core operations while entrusting employment-related responsibilities to experienced professionals, ensuring compliance and reducing risks in Nigeria.

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In Nigeria, employment compliance is primarily governed by two key sources of legislation: the 1999 Constitution of the Federal Republic of Nigeria and the 2004 Labor Act. Additionally, employment relations are influenced by federal laws from the National Assembly and state laws from the House of Assembly. Employees in Nigeria are broadly categorized into two groups: those engaged in physical or clerical roles and those in administrative, executive, technical, or professional positions. Notably, the Labor Act primarily applies to employees involved in physical or clerical labor, while non-working individuals are typically governed by employment contracts.

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Employment contract

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When hiring employees in Nigeria, which encompasses manual laborers and clerical professionals under the Labor Act regulations, it's essential to create a formal, written employment contract. 

The key details to include in the employment contract for hiring in Nigeria:

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• Employer and employee identification
• Employment start date
• Duration (for temporary contracts)
• Workplace location
• Job description
• Salary
• Benefits
• Payment schedule
• Working hours
• Overtime policies
• Vacation entitlement
• Termination conditions
• Notice periods

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Crucially, salary and compensation figures should be denominated in the local currency, the Nigerian Naira, and employment contracts should be crafted in the employees' native language. Nigerian law allows for both fixed-term and indefinite employment contracts, providing flexibility in hiring arrangements.

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This might sound overwhelming—but it doesn’t have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots’ Employer of Record offering, hiring and managing employees globally is a piece of cake.

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Get an overview of what you need to know when hiring in Nigeria.

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Working time

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There is no fixed duration of work as mandated by law. In Nigeria, working hours are determined based on:

• Mutual agreement of employee and employer; or
• Collective bargaining within the organization or industry concerned; or
• By an industrial wages board (established by or under an enactment providing for the establishment of such boards) where there is no machinery for collective bargaining.

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Overtime

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There is no specific legal requirement for the amount of overtime pay.
Rules around overtime work hours and pay must be clearly defined in the employment contract.

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Public Holidays

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Public holidays occurring on weekends are typically forfeited unless the government mandates an alternate day off in compensation. Religious holidays are determined by the lunar cycle and may appear as tentative until confirmed closer to the holiday date.

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Minimum Wage

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The current national minimum wage in Nigeria stands at 30,000 NGN per month.

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Annual Leave

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Employees with 12 months of employment are eligible for 6 days of paid annual leave, often granted as 7 days from the start of employment. Any remaining unused leave can be carried over, subject to the employer's discretion.

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Paid Sick Leaves

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Employees can enjoy 12 days of paid sick leave annually, provided they present a medical certificate after being absent for two days. The employer covers these sick leave days at the employee's full salary.

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Maternity leaves

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In the public sector, female employees are granted 16 weeks of maternity leave at full pay, while in the private sector, they receive 12 weeks of paid maternity leave at half of their average salary. To be eligible for this benefit, employees must have completed six consecutive months of service with the company.

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Paternity leaves

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Men are entitled to 14 working days of paternity leave.

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Tax and Social Security contribution:

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Employer contribution:

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Employer contribution

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Termination 

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The termination procedure depends on the terms of the employment and collective agreements and is influenced by the contract type and the cause for termination. Either the employer or the employee can terminate employment, provided that proper notice is given.

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Severance Pay

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Redundancy pay is obligatory for manual and clerical workers under the Labor Act. However, the law does not specify the exact amount for redundancy pay. It simply requires the employer to make every effort to negotiate redundancy payments. For employees not covered by the Labor Act, severance pay typically follows the terms outlined in the employment contract or collective agreement.

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Notice Period

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The length of notice periods is contingent upon the duration of the employee's tenure with the organization.

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Probation period

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A probationary period is not mandatory, although it is customary to have a probationary period of 3 to 6 months.

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