Zambia, officially known as the Republic of Zambia, is a landlocked country located in southern Africa. With a fast-growing population of over 19 million people, Zambia offers a range of opportunities for businesses looking to invest and expand their operations. The country is known for its rich natural resources, including copper, cobalt and other minerals. Zambia’s economy is rapidly diversifying, with key sectors like agritech, information and communications technology (ICT), mobile technology, fintech, manufacturing, tourism and renewable energy all playing a significant role in its ongoing development.
Why Zambia?
Strategic location: Zambia is centrally located in southern Africa, sharing borders with eight countries, including the Democratic Republic of the Congo, Tanzania, Malawi, Zimbabwe and Angola. Its strategic position makes it an important transportation and logistics hub in the region, providing access to regional markets and facilitating trade.
Investment opportunities: Zambia has a favorable investment climate, with the government actively promoting foreign direct investment (FDI) through initiatives such as the Zambia Development Agency (ZDA) and the Zambia Revenue Authority (ZRA). The country offers investment opportunities in various sectors, including mining, agriculture, energy, infrastructure development, and tourism.
Stable political environment: Zambia has a history of political stability, with regular democratic elections and a peaceful transition of power in recent decades. The government is committed to creating an enabling environment for business and investment, providing a sense of security for foreign investors.
Innovation and entrepreneurship: Zambia is witnessing a rise in innovation and entrepreneurship, with initiatives to support startups and small businesses. Retail startup Wasoko recently announced plans to invest more than $1 million in its expansion into Zambia.
English proficiency: English is the official language of Zambia, which simplifies communication for businesses operating in the country. The high level of English proficiency among Zambians makes it easier for international companies to establish operations and interact with the local workforce.
Bright future: Zambia’s young and dynamic workforce, with a median age of approximately 17 years old, is benefiting from the remarkable advancements in education outcomes achieved by the country in recent years. This presents a valuable source of human capital for businesses, offering the potential to tap into an up-and-coming workforce that is adaptable, innovative and receptive to new ideas. Furthermore, Zambia offers a cost-effective labor market, making it an attractive destination for businesses seeking a skilled workforce at competitive rates.
Employment law in Zambia: How is it determined?
The country’s Employment Code is the principal legal framework that governs employment relationships. Alongside the Employment Code, there are other important legal sources that hold significance, including:
- The Workers Compensation Act
- The Industrial and Labor Relations Act
- The Ministerial Orders made pursuant to the Minimum Wage and Conditions of Employment Act
- The National Health Insurance Act
- The National Pension Scheme Act
These laws and acts collectively contribute to the comprehensive regulatory framework that aims to ensure fair and just employment practices, workers’ rights and social protection in Zambia.
What are the contract requirements regarding employment in Zambia?
Both oral and written employment contracts are recognized under employment law in Zambia. . Employers must maintain a record that includes specific details of an oral employment agreement, adhering to employment law in Zambia. These particulars must include:
- Employee’s name, sex, address, and nationality
- Employer’s name, address, and occupation
- Date of employee’s engagement and the intended role
- Type of contract
- Place of engagement
- Rate of salaries and any additional payments or benefits
- Salary payment intervals
- Any other prescribed details
If an employment contract exceeds six months in duration or the number of working days reaches or surpasses six months within a year, it is mandatory for the contract to be documented in writing. This ensures clarity and legal compliance in the employment relationship.
What do companies need to know about probation periods?
An employee in Zambia can be held to a probation period of up to three months to assess their suitability for a specific position. This probation period can be extended once, for a maximum of three additional months. The total duration should not exceed six months.
During the probation period, if the employer determines that the employee is not suitable for the role, the employer has the right to terminate the contract with a minimum notice period of 24 hours.
It’s important to note if an employee is rehired by the same employer for the same type of work within two years of their previous termination, and the termination was not based on performance-related issues, the employee is not subject to another probation period.
What is required when terminating a written employment contract in Zambia?
When terminating a written employment contract in Zambia, the employer must provide a valid reason for the dismissal that is connected to the employee’s conduct, capacity, or the operational requirements of the employer. This requirement ensures fairness in the termination process. Failure to comply with these obligations may hold the employer liable for damages.
What do companies need to know about notice periods in Zambia?
Unless an employee is found guilty of misconduct, they are entitled to receive a notice period or payment in lieu of notice when their contract is terminated. The minimum notice period requirements in Zambia are as follows:
- 24 hours for a contract not exceeding one month
- 14 days for a contract of more than one month but not exceeding three months
- 30 days for a contract of more than three months
What happens if an employer wishes to dismiss an employee based on behavior or performance?
If the reason for termination is based on an employee’s behavior or performance, the employer must provide the employee with an opportunity to present their side of the story. This allows for the employee’s perspective to be considered before a final decision is made.
Is severance pay in Zambia required?
Employees are entitled to receive severance pay in Zambia when their employment contracts are terminated by the employer or when the contracts reach their expiration date. The amount of severance pay in Zambia is calculated using the following methods:
- Termination on medical grounds: three months’ basic pay for each year served.
- Termination of a fixed-term contract: 25% of basic pay earned during the contract period.
- Termination due to redundancy: two months’ basic pay for each year served.
- Death of the employee: two months’ basic pay for each year served.
What happens if an employee is dismissed without proper notice or payment in Zambia?
In cases where an employer dismisses an employee without proper notice or payment in lieu of notice, the employer is required to submit a written report to a labor officer in the district where the employee was working. This report should detail the circumstances and reasons for the dismissal. The report must be submitted within four days of the dismissal.
What are the requirements for terminating a long-term employment contract in Zambia?
When terminating a long-term employment contract, the employer is obligated to provide the employee with a prorated gratuity payment based on the period of employment. This payment allows the employee to receive fair compensation based on their length of service with the employer.
Why are many companies opting to utilize a Zambia Employer of Record (EOR)?
Zambia offers attractive prospects for companies seeking global expansion due to its strategic location, skilled workforce and thriving economy. However, establishing a legal entity in Zambia can present challenges, including navigating bureaucratic processes, fulfilling paperwork requirements and meeting legal obligations. Moreover, safeguarding regulatory compliance, managing taxation, reporting, payroll processing and other HR functions require expertise and familiarity with local practices.
To overcome these hurdles, numerous companies are turning to a qualified Employer of Record (EOR) like GoGlobal. This partnership allows businesses to engage a local team without the need for establishing a legal entity. By doing so, companies can achieve compliance with local regulations, reduce costs, enhance agility in hiring and mitigate employment risks.
The EOR model can serve as a temporary bridge or long-term solution, enabling businesses to swiftly and compliantly tap into Zambia’s workforce.
Why do leading companies choose GoGlobal for EOR and recruitment in Zambia?
At GoGlobal, we adopt a people-centric approach to HR as a Zambia Employer of Record. Throughout the hiring process, we prioritize human interactions, employing cutting-edge technology solutions while deeply understanding the local customs and culture. Our services are available in English or local languages and we operate within our clients’ preferred time zones. This personalized and customized approach ensures a positive experience for all parties involved.
What distinguishes GoGlobal is our demonstrated expertise in navigating Zambia’s complex legal and regulatory landscape. Our dedicated team members possess in-depth knowledge of the country’s regulatory environment, labor market conditions and business culture.
In addition to our EOR services, GoGlobal offers a comprehensive Recruit & Hire solution. This encompasses the entire hiring process, including talent sourcing, onboarding, benefits administration and offboarding. Our innovative offering is particularly beneficial for securing skilled professionals in areas like IT, sales and client services – providing a comprehensive solution package.
Partnering with GoGlobal as your Zambia Employer of Record ensures a seamless hiring experience, allowing companies to confidently enter the market and thrive in a competitive business landscape.
GoGlobal maintains an extensive on-the-ground presence in Africa, with local offices in 18 countries across North Africa and Sub-Saharan Africa. This broad reach enables us to provide exceptional support to clients seeking to expand their operations and build successful teams throughout the continent.
Find additional details on benefits and hiring in Zambia or contact us to talk with an international HR expert.