Labour Law And Social Security Law In Jordan
One of the main concerns that investors take into consideration
when they think of investing in a country is the labour market,
laws, and regulations that govern the relationship between the
Employer and the Employee.
Jordanian Labor law number (8) was issued in 1996 to regulate the
relationship between the Employer and the Employee, which means
that any contract or any term in any contract between both parties
that contradicts the labor law is considered invalid.
Along with labor law, social security law number 19 for the year
2001 is an applicable law in the relationship between both
parties.
The social security law was issued to guarantee employee pension,
disability, death and to cover the medical expenses and or/any harm
occurred to the employee during his duty and/or any career
illnesses.
To cover the abovementioned benefits listed in the Social Security
Law, 5.5 % of the employee's salary plus contribution from the
employer equivalent to 11% of the employers' monthly salaries
shall be deducted and paid to the social security department at the
beginning of every month, according to the employee list provided
to the social security department by the employer. These payments
shall be made within fifteen days after the end of each month; any
delay will make the employer liable for fines and interests.
Article (52) of the labor law gave the Cabinet the right to
formulate a committee from the employers, employees and Ministry of
Labor to study the minimum wages according to the market prices and
the economic situation. This committee determined the minimum wages
to be one hundred ten Jordanian Dinar per month instead of eighty
Jordanian Dinar starting from 1st June 2006 for all employees
excluding the workers in garment manufacturing, as they will enjoy
this increase starting from 1st January 2007. Newspapers mentioned
that new regulations may be issued regarding the minimum wages by
the beginning of 2009 but nothing official regarding the matter has
been confirmed.
Shape of employment contracts
Employment contracts can be limited or unlimited contracts. In
the case of limited contracts, if the employer terminates the
contract before the end of its duration for unlawful reason, then
the employee is entitled for compensation equivalent to his
salaries for the rest of the period, while in the unlimited
contracts the compensation will be between three – six
months plus one month notice, in other words the minimum
compensation will be four...
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