Jordan's Labour Law No. 8 of 1996 (and its amendments) governs the employment relationship for most private-sector workers. A foreign-owned company setting up in Amman and a Jordanian business expanding its workforce both need to understand these rules before they hire. This guide covers the core obligations every employer in Jordan must meet.
1. Employment Contracts
Jordanian law recognises both written and oral employment contracts, but a written contract is strongly recommended and, for foreign employees, legally required. The contract should specify the job title, duties, salary, working hours, start date, and contract duration (if fixed-term). Under Article 15 of the Labour Law No. 8 of 1996, a fixed-term contract ends automatically when its term expires; if the two parties continue performing it after that term, it is deemed renewed as an indefinite-term contract from the start of employment.
Key clauses to include: probation period, notice period, non-compete obligations (which must be reasonable in scope and duration to be enforceable), confidentiality, and the applicable dispute resolution mechanism.
2. Probation Period
An employer may include a probation period of up to three months. During probation, either party may terminate the contract without notice and without liability for end-of-service indemnity. However, if no probation clause is included in the written contract, the employee is considered confirmed from day one. The probation period cannot be extended or repeated for the same employee in the same role.
3. Working Hours and Overtime
The standard working week is 48 hours, typically spread over six days (eight hours per day). During the month of Ramadan, Muslim employees' working hours are reduced to 36 hours per week. Any work beyond the standard hours constitutes overtime and must be compensated at 125% of the regular hourly rate. Work on Fridays, public holidays, or weekly rest days is compensated at 150% of the regular rate, unless the employee is given a substitute rest day.
Employers must also provide a minimum of one day of rest per week (typically Friday) and observe Jordan's official public holidays.
4. Social Security
Social security in Jordan is governed by the Social Security Law No. 1 of 2014 and its amendments. All employers must register with the Social Security Corporation (SSC) and enrol their employees within the first week of employment. Social security contributions are mandatory and currently total 21.75% of the employee's gross salary:
- Employer's share: 14.25% (covering old-age, disability, death insurance, work injury insurance, maternity insurance, and unemployment insurance)
- Employee's share: 7.5% (deducted from salary)
Failure to register employees or to remit contributions on time results in penalties, including fines and interest on arrears. The SSC conducts regular audits and cross-references data with other government agencies.
5. End-of-Service Indemnity
Employees who have completed at least one year of service are entitled to end-of-service indemnity upon termination (unless the employee is dismissed for cause under Article 28 of the Labour Law). The indemnity is calculated at one month's salary for each year of service, based on the last salary received. Fractions of a year are calculated proportionally.
This obligation applies regardless of whether the employee resigns or is terminated by the employer. For employees enrolled in social security, the Labour Law end-of-service indemnity is largely provided through the Social Security Corporation system rather than paid separately by the employer, so the two entitlements should be assessed together rather than assumed to be payable in full at the same time. Employers should consult with employment counsel to confirm the correct figure for each departing employee and avoid duplicating or under-paying these entitlements.
6. Notice Periods
For indefinite-term contracts, either party must provide written notice before termination:
- Monthly-paid employees: at least one month's notice
- Other employees: notice as specified in the contract, or a reasonable period consistent with industry practice
If the employer terminates the contract without providing the required notice, the employee is entitled to payment in lieu of notice (equivalent to the salary for the notice period). Similarly, if the employee resigns without notice, the employer may deduct the equivalent amount.
For fixed-term contracts, no notice is required if the contract expires at the end of its stated term. However, the effect of early termination depends on who ends the contract: if the employer terminates without cause, it owes the wages for the unexpired portion of the term; if the employee leaves of their own accord without a justified ground under Article 29, the employee's liability is capped at half a month's wage for each remaining month (Article 26).
7. Foreign Worker Permits and Jordanisation
Foreign nationals cannot work in Jordan without a valid work permit issued by the Ministry of Labour. The employer is responsible for obtaining the work permit before the employee commences work. Work permits are typically issued for one year and must be renewed annually. The application requires proof that the position cannot be filled by a qualified Jordanian candidate, a medical fitness certificate, and evidence that the employer is compliant with social security and tax obligations.
Jordan enforces Jordanisation policies that require employers to maintain a minimum percentage of Jordanian employees in their workforce. The required ratio varies by sector and is set by the Ministry of Labour. Employers that exceed the permitted ratio of foreign workers face fines and may be unable to renew existing work permits or obtain new ones.
Key compliance steps:
- Verify the Jordanisation ratio applicable to the sector before hiring any foreign workers
- Obtain work permits before foreign employees begin working
- Renew permits on time, expired permits result in penalties for both employer and employee
- Maintain accurate records of the workforce composition for Ministry of Labour inspections
8. Leave Entitlements
Jordanian law mandates the following minimum leave entitlements:
- Annual leave: 14 days per year (21 days for employees with five or more years of service)
- Sick leave: 14 days per year at full pay on the approved physician's report, renewable for a further 14 days at full pay if the employee is an in-patient at a hospital (Article 65)
- Maternity leave: ten weeks at full pay, taken before and after delivery, with at least six weeks falling after delivery (Article 70 of the Labour Law)
- Paternity leave: 3 days
- Bereavement leave: 3 days for the death of a close relative
- Hajj leave: 14 days (once during employment, for employees with five or more years of service)
When to Speak With a Lawyer
Employment law in Jordan carries real financial and operational consequences for non-compliance, from social security penalties and Ministry of Labour fines to wrongful termination claims. An employer establishing a business in Jordan, expanding the team, or restructuring the workforce can engage labour and employment counsel to review the contracts, policies, and compliance position before problems arise.
For broader corporate structuring questions, see our corporate and commercial practice area.
For advice on a specific matter, you may contact the firm.
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