For employers looking to hire top talent in Madagascar, the challenges may seem endless. But, contrary to popular belief, hiring global employees doesn’t always have to come with a headache. Working with an Employer of Record (EOR) platform, like Borderless, makes hiring employees efficient, streamlines payroll, and guarantees compliance.
This article will guide you through the reasons and benefits of using an EOR to hire employees in Madagascar.
Why Hire Talent from Madagascar?
Madagascar is becoming more and more popular as a hub for hiring employees around the world. The population of Madagascar is young, well-educated, and tech-savvy, making it an ideal place for businesses to hire talent and build their global presence. While Madagascar’s official languages are Malagasy and French, English is widely spoken, which is great for companies looking to have a multilingual workforce.
Madagascar also has a unique and diverse culture that’s heavily influenced by France, making it the ideal place for employers that are looking for employees who are used to European culture and customs. The strategic timezone of Madagascar also makes it easy for European companies to align with employees.
Finally, due to its low employment costs, employers have the opportunity to save money while recruiting top talent. Overall, hiring from Madagascar provides employers with the opportunity to have a diverse, skilled and talented workforce that helps them grow and succeed in today’s rapidly changing global landscape.
How to Legally Hire from Madagascar
For employers looking to hire talent from Madagascar, there are a couple of ways to go about it. For one, employers could draft independent contractor agreements; however, these come with risks of misclassification and don't grant the new hire employee status.
A longer route involves setting up a physical business entity. Doing this is costly, time-consuming, and complex, especially when it comes down to complying with local labor laws and regulations.
Madagascar has several different minimum wage requirements; the country has a base minimum wage, but overall, the wages vary due to the industry and how long the employee has been employed. Taxes are also complex; the rate depends on the income of the employee, but may also be impacted due to dependents. If companies were to set up a legal entity on their own, doing so comes with significant challenges.
A third, popular, and stress-free route involves using an Employer of Record (EOR) platform. An EOR is a third-party organization that acts as a broker for hiring talent outside the country where the employers operate. Using an EOR to hire employees in Madagascar makes the process seamless and compliant.
What Does an Employer of Record Do?
An EOR provides an efficient and compliant way for organizations looking to recruit and hire talent from abroad. They take care of tedious administrative tasks associated with employment contracts, onboarding, tax documentation and filing, payroll processing, intellectual property protection, and termination. With labor laws constantly changing across the world, using an EOR guarantees you maintain strict compliance, no matter where you hire from.
Contracts and Documentation
Each country has specific information for what must be included in an employment contract, and Madagascar is no different. While some countries only have written employment contracts as a formality, they are required in Madagascar and must include specific information. It must include the tasks of the job, the sector, the salary, benefits, and the start date.
Fixed-term contracts are also allowed in Madagascar, but not without limitations. For example, fixed-term contracts are not allowed to be renewed more than twice. If an employer wishes to continue the working relationship, the employee must work under an indefinite contract.
Insurance and Benefits
Using an EOR to hire employees in Madagascar will guarantee that employees have proper insurance coverage and the necessary benefits required by local laws and regulations. This includes healthcare and unemployment benefits. An EOR will also take care of supplemental benefits for employees, like dental, vision, life insurance, and retirement savings plans. With global hiring becoming more and more competitive, it pays to offer employees attractive additional benefits.
Paid Time Off, Leave, and Public Holidays
Employers hiring in Madagascar need to be aware of paid time off allowances, types of leave, and public holidays. Employees in Madagascar are entitled to 30 days of paid time off per year if they’ve worked for the employer for more than a year.
Employees are also entitled to five days of paid sick leave each year and can be extended if necessary. New mothers are entitled to 14 weeks of paid maternity leave, but if necessary, can be extended.
Employees in Madagascar are entitled to 13 paid public holidays, which are:
- January 1: New Year’s Day
- March 8: International Women’s Day
- March 29: Martyr’s Day
- March/ April: Easter Monday
- May 1: Labor Day
- May/ June: Ascension Day
- Varies: Eid ul-Fitr
- May/ June: Whit Monday
- June 26: Independence Day
- August (date varies): Eid ul-Adha
- August 16Assumption Day
- November 1: All Saints Day
- December 25: Christmas
Navigating paid time off, leave, and holidays in Madagascar can be challenging and hard to keep up with. While there are guides and practices for employers to manage PTO on a global team, an EOR will ensure everything is properly calculated and tracked.
Tax Obligations
Employers in Madagascar are required to pay a range of taxes and social security contributions, all of which are ultimately based on the employee’s salary, household dependents, and industry. These contributions include healthcare, maternity leave, pension, disability and life insurance, and childcare benefits.
Working through all the different tax rates and contributions in Madagascar is time-consuming and overwhelming. Fortunately, an EOR will handle all the logistics and ensure that all taxes are filed compliantly.
Employer Responsibilities
While the EOR takes care of all legal and HR procedures, like contracts, payroll, and taxes, the employer also has some responsibilities. The employer needs to take on responsibilities as if they were hiring a local candidate; this includes recruitment, interviewing, and onboarding. Once the employee is onboarded, it’s the employer’s responsibility to maintain the subordinate working relationship.
It’s also up to the employer to be aware of the working culture in Madagascar and connect with employees. Even though Madagascar has cultural compatibility with other countries, like France, there are various factors that employers need to be aware of. This will create a positive and welcoming work environment that encourages communication and inclusivity, ultimately helping with employee performance and retention.
Advantages of Using an Employer of Record
Using an EOR in Madagascar will save time, reduce costs, and minimize compliance risks. Setting up an entity in a foreign country comes with a lot of stress. An EOR is already set up to hire employees abroad, making it a seamless and efficient process.
EORs have local knowledge and extensive experience in maneuvering through intricate HR processes, so employers won’t need to worry about any potential compliance and legal issues. In Madagascar, though, The Malagasy Commission on Information Technology and Liberties takes care of all confidential information related to employees. This data protection directive has been in effect since 2015.
However, despite widespread data protection in Madagascar, it’s still critical for employers to maintain and manage system security, especially with remote employees. Using an EOR with advanced local knowledge will guarantee that your organization is in compliance with the regulation.
Other than minimizing the stress of hiring globally, working with an EOR is cost-saving and ensures a positive employee experience with streamlined HR support.
Choosing the Right Employer of Record
When it comes to choosing the right EOR, employers must do their due diligence in order to find the right partner. Employers should take various factors into consideration, such as the following:
- Experience and expertise: When working with an EOR in Madagascar, you want to make sure they have local knowledge of employment laws and experience in the country. Working with an EOR with a positive reputation in Madagascar ensures compliance.
- Range of services: Keep in mind the range of services offered by EORs and see if it’s right for you. Look for different services related to hiring staff, like administering benefits, filing taxes, compliance and governance, and legal support.
- Data security: In a remote work environment, protecting intellectual property is vital. When choosing an EOR vendor, make sure they have a specific agreement which outlines the ways they aim to keep sensitive information secure.
Borderless — The EOR For You
If you’re looking to hire an employee in Madagascar, an EOR is the solution. With Borderless, we make the hiring process a breeze. While you connect with your employees, we’ll do the heavy lifting to guarantee compliance and make hiring a seamless, stress-free process.
Book a demo to see how we can streamline hiring employees from Madagascar.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
