Navigating Iraq’s New Social Security Law No. 18 of 2023

Iraq has recently announced the Social Security Law No. 18 of 2023 (“New Law“), which has been officially published in Gazette No. 4734 on August 28, 2023. This pivotal piece of legislation is set to come into effect on December 1, 2023, effectively replacing the former Social Security Law No. 39 of 1971 (“Old Law“).

Here are the key highlights and changes introduced by the New Law:

PSSD Contribution Rate: The monthly PSSD contribution rate remains unchanged at 17% of the salary amount, with employees contributing 5% and employers contributing 12%. This rate is consistent with the provisions of the Old Law. Employers are still obligated to remit this contribution to the Ministry of Labour – Social Security Authority (MLSA) on behalf of their employees.

Delay Fines: A revised delay fine structure, imposing a 1% fine of the contribution amount for delays occurring after 120 days from the following month of the contribution due date.

Penalties for Non-Compliance: Fines ranging from 1,000,000 IQD to 5,000,000 IQD for non-compliance, in addition to requiring payment of five times the due contribution amount.

Retirement Age: The New Law introduces updated retirement age criteria: For men, retirement age varies from 50 to 63 years, depending on years of service. For women, retirement age ranges from 50 to 58 years, also based on years of service.

Foreign Employees Fees: Employers must pay 2,000,000 IQD for each foreign employee entering Iraq and an additional 750,000 IQD after adjusting the foreign employee’s legal status.

What should you do next?

In light of these significant legislative changes, we strongly recommend that you undertake a comprehensive review of your existing practices and policies to ensure full compliance with the New Law ahead of its enforcement date on December 1, 2023.

How can we help?

As the leading law firm in the Middle East & North Africa Region, we are well-versed in these substantial legal developments. Our team of experts is readily available to assist you in navigating this transition smoothly, ensuring your organisation is adequately prepared and fully compliant with the New Law.