Albanian Labor Law Overview
Albania's employment legislation is governed by the Albanian Labour Code (Law No. 7961, dated 12.07.1995, as amended) and is progressively aligned with EU directives as part of the country's EU accession process. Understanding these regulations is essential for any company hiring in Albania, whether through an Employer of Record (EOR), Professional Employer Organization (PEO), or direct employment.
Working Hours & Overtime
- Standard Work Week: 40 hours (8 hours/day, 5 days/week)
- Overtime: Maximum 200 hours/year, compensated at 125% for weekdays, 150% for weekends/holidays
- Rest Period: Minimum 11 consecutive hours between work days
- Night Work: Defined as work between 22:00 and 06:00, with additional compensation requirements
Overtime must be agreed in writing between employer and employee. Employers cannot unilaterally impose additional hours. Detailed timekeeping records must be maintained for each employee, and exceeding the 200-hour annual cap carries administrative penalties.
Minimum Wage
Albania's minimum wage is ALL 40,000/month (approximately EUR 370). This is reviewed periodically by the Council of Ministers and may be adjusted based on inflation and national economic conditions. All employment contracts must specify a gross salary at or above this threshold.
Probation Period
The Albanian Labour Code permits a probation period of up to 3 months for permanent contracts. During probation, either party may terminate the contract with a minimum of 5 working days' notice. The probation period must be explicitly stated in the written employment contract and cannot be renewed or extended for the same role with the same employee.
Termination & Notice Periods
Termination in Albania must follow specific procedures to be lawful. An employer may terminate an individual contract for just cause (disciplinary reasons) or objective reasons (redundancy, business closure). The minimum statutory notice periods are:
- Up to 2 years of service: 1 month notice
- 2 to 5 years of service: 2 months notice
- Over 5 years of service: 3 months notice
Wrongful dismissal or failure to follow proper procedures entitles the employee to compensatory damages. Collective dismissals (affecting more than 20 employees within a 90-day period) require a specific consultation process with employee representatives and notification to the Labour Inspectorate.
Social Security & Tax Contributions
Albania's social security system requires mandatory contributions from both employer and employee. Current rates are approximately:
- Employer contributions: ~16.7% of gross salary
- Employee contributions: ~11.2% of gross salary
- Personal income tax: Progressive rates from 0% to 23% depending on income brackets
Employers must remit social contributions monthly to the Social Insurance Institute (ISSH) and the Health Insurance Institute (ISKSH). Failure to remit carries significant penalties and late-payment interest.
Leave & Holiday Entitlements
The Labour Code guarantees employees a minimum of 20 working days of paid annual leave. Leave accrues proportionally and cannot be replaced by monetary compensation during an active employment relationship. Additional entitlements include:
- Maternity leave: 365 calendar days total (at least 35 days mandatory before the expected delivery date)
- Paternity leave: 3 paid days
- Sick leave: First 14 days paid by the employer, from day 15 onward covered by state insurance
- Public holidays: 12 statutory public holidays per year
Employment Contracts
All employment relationships in Albania must be documented with a written contract. The contract must specify the job title, duties, workplace, start date, duration (fixed or indefinite), salary, working hours, probation period, and notice terms. Contracts in Albania are typically in Albanian, though bilingual versions are common for international employers. Fixed-term contracts may be renewed, but repeated renewals beyond a certain threshold may convert the relationship to indefinite-term under the law.
Let HireAlbania Handle Compliance
Navigating Albanian employment law is complex, especially for foreign companies unfamiliar with the local regulatory framework. As Albania's local EOR and PEO provider, HireAlbania ensures full legal compliance, manages all HR administrative tasks, and protects you from regulatory risk — so you can focus on growing your business without compliance concerns.
