Uruguay, a South American nation, holds a notable economic position globally. In Sub-Saharan Africa, it ranks in the middle tier. For businesses entering Uruguay, Employer of Record (EOR) services offer a streamlined solution for hiring and managing employees, ensuring compliance and ease of entry into the local market.

EORs can help bridge language and cultural gaps for businesses looking to expand businesses in Uganda, facilitating effective communication with local employees and navigating cultural nuances in business operations. There are differences between labor laws in countries like USA and Uganda. While Uganda has labor laws protecting workers' rights, including provisions for minimum wage, working hours, and leave entitlements, Employment in the U.S. is generally "at-will," allowing employers to terminate employees for any reason. Before engaging an EOR in Uganda, companies must conduct thorough due diligence, assess the specific services offered by the EOR provider, and ensure alignment with the company's needs and compliance requirements. Consulting with legal and business professionals familiar with the Ugandan market is advisable to understand local regulations comprehensively.

In Uganda, Employer of Record (EOR) services commonly provide two pricing models: fixed and variable. Opting for Gloroots' Uganda EOR means embracing a transparent fixed fee, removing hidden charges and easing budget planning for employers. This differs from variable fee structures, which may complicate salary budgeting as costs rise with higher employee salaries. Gloroots offers a reliable and predictable solution for managing workforce expenses in Uganda.

Key Metrics For Foreign Employers 

Uganda, the Pearl of Africa, is known for its splendor, natural wonders, and amazing people. With the increasing integration of technology in various industries, IT professionals remain in high demand

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Uganda.

Source: The Global Talent Competitiveness Index 2023

Through the Gloroots’ Recrew platform, you can discover amazing talent in Uganda.

In Uganda, misclassifying employees poses significant risks, potentially leading to severe legal consequences and undermining essential legal protections. To safeguard against these risks, embracing a proactive approach through a Professional Employer Organization (PEO) or Employer of Record (EOR) is crucial. Businesses opting for this strategy ensures meticulous compliance, precise employee classification, and comprehensive benefits administration. Collaborating with seasoned professionals allows companies to concentrate on core operations with confidence, as employment responsibilities are expertly managed in accordance with Ugandan regulations, prioritizing the well-being and legal protection of the workforce.

The Employment Act of 2006 ensures essential rights and safeguards for workers, encompassing fair wages, safe working conditions, and freedom from discrimination and forced labor. It grants workers the right to form and join trade unions, engage in collective bargaining, and exercise the right to strike. Simultaneously, it delineates employer responsibilities, mandating the provision of secure and healthy working environments, fair remuneration, and respect for employees' rights to form trade unions.   

Employment contract

Uganda's employment and labor laws encompass three types of contracts:

Express Term Contracts: These written or oral contracts bind both employer and employee to agreed-upon conditions. Section 25 of the Employment Act 2006 allows for written and oral service contracts validated by a labor officer or magistrate. Section 59 specifies that express term contracts must include details such as names and addresses of both parties, commencement date, job position, work location, salary, and daily working hours.

Fixed-Term Contracts: Standard in Uganda, these contracts specify a defined employment period. Once this period concludes, the contract automatically ends. Essential details in a fixed-term contract include employment type, working hours, salary, perks, disciplinary actions, paid leave, and health and safety provisions.

Indefinite Period Contracts: Governed by employment laws in Uganda, these open-ended contracts continue until either the employer or employee terminates the arrangement. Designed for permanent positions, these contracts offer ongoing employment within a company.

Essential information required by employment law includes:

• Company details: Name, registered office address, registration number, etc.
• Employee details: Date of birth, current address, nationality, job designation, etc.
• Start date of employment
• Nature of the employment
• Employee duties
• Duration of employment for determinate contracts
• Payroll cycle and monthly salary disbursement date
• Compensation structures
• Length of the probationary period, if applicable
• Leave details
• Notice period
• Applicable collective bargaining agreements

Working time

The regular workweek consists of 8 hours each day or a total of 48 hours weekly.

Overtime

When an employee surpasses the standard workweek without a written agreement, compensation is required at a minimum rate of one and a half times the normal hourly rate for overtime on regular working days. Additionally, for overtime worked on recognized public holidays, the compensation should be at two times the hourly rate.

Public Holidays

Uganda observes a total of 12 public holidays.

Minimum Wage

The minimum wage is 130000 UGX/Month.

Annual Leave

Employees are entitled to a minimum of 21 paid working days of annual leave, accruing at seven days for every four months of continuous service. They cannot exchange this leave for monetary compensation. Failure to request leave within a year results in forfeiture, and the maximum carryover for unused leave is one year. Leave is granted upon employee request, and termination entitles employees to compensation for unused annual leave.

Paid Sick Leaves

Employees, working a minimum of 16 hours per week with at least one month of service, are entitled to two months of sick leave annually. During employer provides full pay and benefits, while the second month is unpaid. If the employee remains unable to work due to illness after the second month, termination may occur. Notification of absence and a medical certificate are required for sick leave.

Maternity leaves

Female employees have a right to 60 paid working days of maternity leave, requiring a minimum of seven days' written notice before commencing and concluding the leave. In exceptional circumstances, like pregnancy-related illness, maternity leave may be extended by an additional 20 working days.

Paternity leaves

Male employees have the right to four paid days of paternity leave per year, applicable after the birth of a child or the miscarriage of their wife.

Tax and Social Security contribution:

Employer

Employee

Employee Income tax

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Termination 

In Uganda, employers are not permitted to terminate employees arbitrarily and must cite valid reasons for termination. A fair hearing or consultation process must precede termination, during which the grounds for termination should be clearly communicated. Unfairly terminated employees are entitled to a basic compensation order equivalent to four weeks' salary. If an employer issues a termination notice, the employee can end the employment contract before the notice period concludes without being obligated to compensate the employer for the remaining duration.

Severance Pay

Employers must offer severance pay under the following conditions:

• Unfair dismissal cases.
• Termination of employment due to employer insolvency or death.
• Death of an employee during their tenure.
• Employee-initiated contract termination due to physical incapacity.

The employee must have completed at least six months of continuous service to be eligible for severance pay. The specific amount of severance pay is subject to negotiation between the employer and the employee or the labor union representing the employee.

Notice Period

The notice period mandated is contingent on the employee's tenure:

Alternatively, the employer has the option to provide compensation instead of the required notice.

Probation period

The probation period is limited to a maximum of six months. Extending the probation period is allowed with the employee's consent, but an employer cannot subject the same employee to probation more than once. Within the probation period, either the employee or employer can end the employment contract by providing a 14-day notice, or the employer can opt to pay seven days' wages in lieu of notice.

Start Hiring in Uganda Today

When expanding globally, ensuring compliance poses unique challenges. Employers must navigate employment laws, adhere to payroll protocols, uphold DE&I standards, comply with GDPR and data protection regulations, and more. While establishing local entities and commencing hiring can be daunting, staying abreast of a dynamic compliance landscape is even more demanding.

Gloroots streamlines this process, offering a centralized platform to manage these tasks effortlessly. Our in-house experts provide comprehensive protection against cross-border employment and payroll compliance risks. We assist in crafting employment contracts, ensuring timely payments, and delivering compliant benefits, allowing you to concentrate solely on talent screening.

Our commitment is to provide a seamless global employment experience, alleviating stress for both you and your employees.

Connect with our experts today to launch your global recruitment initiative.

When expanding globally, ensuring compliance poses unique challenges. Employers must navigate employment laws, adhere to payroll protocols, uphold DE&I standards, comply with GDPR and data protection regulations, and more. While establishing local entities and commencing hiring can be daunting, staying abreast of a dynamic compliance landscape is even more demanding.

Gloroots streamlines this process, offering a centralized platform to manage these tasks effortlessly. Our in-house experts provide comprehensive protection against cross-border employment and payroll compliance risks. We assist in crafting employment contracts, ensuring timely payments, and delivering compliant benefits, allowing you to concentrate solely on talent screening.

Our commitment is to provide a seamless global employment experience, alleviating stress for both you and your employees.

Connect with our experts today to launch your global recruitment initiative.

Expand your team in Uganda effortlessly with Gloroots, your strategic partner in navigating local employment intricacies. Our tailored solutions align seamlessly with your business objectives, streamlining the hiring process while our comprehensive Employer of Record (EOR) service manages compliance, payroll, tax obligations, and benefits. With Gloroots, you can concentrate on nurturing your team and driving company expansion in the dynamic Ugandan market, confident that your operations are in compliance with local regulations.