Moroccan Wages and Labor Management
From International Business Wiki
Business wanting to locate production and/or distribution in Morocco could benefit through lower labor cost though that benefit could be offset by the administrative management requirements. In June 2004 the current labor code passed by the government took effect. It guaranteed minimum wage standards, minimum age for employment, maternity protection, hours of work and overtime, paid annual and holiday leave, policies for special categories of workers, and occupational safety and health (OSH) protection. It also formally ended forced labor practices and standardized labor union associations in regards to organization, representation, elections and dispute settlements (Labor Bureau of International Labor Affairs 2004).
Wages: Morocco does have a minimum wage (the Salaire Minimum Interprofessionnel Garanti, SMIG) standard for both industrial and agricultural sectors; currently it is about $0.97 to $1.06 per hour. Worker hours are limited to 44 hours a week, 10 hours a day before overtime is required however, it seems business rarely have to pay any premium for overtime. Most workers in Morocco work 10-12 hours a day, 6-7 days a week (Elmorchid & Mansouri 2004).
Don’t expect to pay minimum wage though, in the industrial sector labor is primarily controlled by three main labor unions: the Moroccan Labor Union (UMT), the National Labor Union of Morocco (UNTM), the General Union of Moroccan Workers (UGTM) though there are several others. The labor unions are quite powerful and collective bargaining between labor and management has been the lasting tradition. As a result the wages of most union workers are much higher than the common marked. Further wage costs include CNSS (national case of social security) contributions which are worker/employer shared from 50/50 to 25/75 percent (Muller & Nordman 2005).
Labor Management: The labor code brought Morocco in line with most labor practices of the industrialized nations of the world. Along with the protections noted above it also set minimum worker age at 15 with restrictions until age 16, and set up and inspection process for enforcement of the OSH standards as well as fines for offending companies that could result in government takeover of the company for repeated offences. One of the noteworthy acts of the labor code is the firing restrictions. For example if your company has a downturn well, layoffs for economic purposes are prohibited and downsizing for economic reasons is subject to prior approval by the regional authorities. Furthermore, the only way for a company to fire a worker is for disciplinary reasons and the law allows the worker to appeal his dismissal before the courts (Agénor & Aynaoui 2003). Not surprisingly the unions especially enforce the firing restrictions in the labor code and often companies must engage in further agreements with the unions to remove unproductive or bad employees. For this reason most companies are reluctant to hire new employees unless they are personally known to someone in the company. This of course can lead to nepotism and restrict company expansion.
References
Brahim Elmorchid and Brahim Mansouri (December 2004). The User Cost
Of Labor and Policy of Recruitment within the Moroccan Labor Market.
Faculty of Law and Economics, Marrakesh, Morocco.
Christophe Muller and Christophe Nordman (April 2005). Wage and Human Capital in
Exporting Firms in Morocco. Departamento de Fundamentos del Análisis
Económico, Universidad de Alicante, Campus de San Vicente, Alicante, Spain
Pierre-Richard Agénor and Karim El Aynaoui (October 26, 2003). Labor Market Policies
and Unemployment in Morocco: A Quantitative Analysis. The World Bank.
U.S. Department of Labor Bureau of International Labor Affairs (July 2004). Morocco
Labor Rights Report.
