Wages and social security of subcontractor workers: who bears them?
The Law Office of Ali Barakat, from Baghdad, al-Yarmouk, addresses who bears the wages, rights, and social security of workers engaged by a subcontractor when part of the work is entrusted to another employer. The source is article 12 of Labour Law No. 37 of 2015, published in the Official Gazette, issue 4386, of 9/11/2015, together with article 21 of Workers' Retirement and Social Security Law No. 18 of 2023, published in the Gazette, issue 4734, of 28/8/2023. How the Law applies to oil companies is covered by a cross-reference to its page.
Equal rights and joint liability in the Labour Law
If the original employer assigns to a second employer the carrying out of some of the original employer’s work, or a part of it, by way of subcontract, and the work is performed under like working conditions, the person who receives the assignment must treat those he or she employs and the original employer’s workers on an equal footing in all rights, and the two stand together in that liability, under article 12. The rule rests on two conditions that appear in the text: that some of the principal employer’s work, or part of it, is entrusted as a subcontract, and that this takes place under the same working conditions. If both conditions are met, the duty of equal treatment extends to all rights, not to wages alone, and joint liability arises between the principal and the person entrusted with the work.
“All rights” is read with the rest of the Labour Law: the wage and what is annexed to it in article 1; the times of payment and the statement of elements in articles 53 and 59; permitted deductions in article 57; rest, leave, and holidays; occupational safety; and the end-of-service gratuity where it is due. Delayed wages and what the Law allows are in Remedies for delayed wages. Joint liability means the worker may pursue the right against either of the persons jointly liable, within what the text draws.
This rule is not article 50, which makes the new employer responsible for the previous employer’s obligations when the project is merged, or ownership is transferred, sold, leased, or invested, while the previous employer remains jointly and severally liable for obligations that accrued up to the transfer. The path of a transfer of the undertaking is in The fate of workers’ contracts on a change of ownership or a merger.
Social-security notice and the contractor’s joint liability
An employer who places the performance of work with a contractor, undertaker, or investor must inform the Workers’ Pension and Social Security Department, at least a week before performance starts, of that contractor’s name and address and of a description of the work and its cost, under article 21 of Law No. 18 of 2023. The effect of that information runs against the contractor for the contractor and for any secondary undertaker beneath the contractor, and the original and the secondary bear fulfilment together. State finance offices are not to pay a sum due to an employer, undertaker, or investor until official clearance from the social-security department is before them; otherwise the office and the official bear the consequences the text attaches.
The employer is in any event bound to enrol the workers who are covered and to pay the contributions, and to file annual data that match the employer’s records, under articles 16, 17, 22, and 23 of the social-security law. Contribution rates and the wage base are set out in the page on enrolling workers in social security, and the practical detail is in The employer’s social-security duties. Foreign oil companies and subcontracting in the fields are in Labour Law rules that matter to foreign oil companies in Iraq.
The office reads this framework from Baghdad. Equal treatment and joint liability are measured against whether “the same working conditions” are met and against what was entrusted as a subcontract, not against a general commercial description of a chain of contracts. Notice to the social-security department does not replace the equal rights article 12 draws, and the reverse is also true.
Legal basis and sources
- Labour Law No. 37 of 2015 (Iraqi Official Gazette, issue 4386 of 9/11/2015) — Articles 12 and 50
- Workers' Retirement and Social Security Law No. 18 of 2023 (Iraqi Official Gazette, issue 4734 of 28/8/2023) — Article 21
Frequently asked questions
Who bears a subcontractor worker’s wage if the conditions in article 12 are met?
Article 12 requires equal treatment as between those employed by the person who receives the work and the original employer’s workers, in all rights, and places them together in liability, where some of the original employer’s work, or a part of it, is assigned by way of subcontract under like working conditions.
When must social security be notified of the contractor?
Article 21 of Law No. 18 of 2023 requires notice of the contractor’s name and address, and of the nature and cost of the work, at least seven days before the work starts. The contractor is bound by the consequences of the notice for the contractor and for the secondary undertaker, and the original and secondary undertakers are jointly liable for fulfilling the obligations.
Is a transfer of ownership of the project the same rule?
No. Article 50 regulates the liability of the new and previous employer on a merger, transfer of ownership, sale, lease, or investment. Article 12 regulates subcontracting under the same working conditions. The two paths are not confused.
Related topics and articles
- 01A foreign oil company hiring in Iraq: six labour questions before day oneA labour checklist for foreign oil companies in Iraq: who the Labour Law covers, permits for foreign staff, layers of subcontractors, site safety, and social security.
- 02When wages arrive late: the calendar the Labour Law sets and the path to recover themThe calendar for paying wages under articles 53 and 60 of Labour Law No. 37 of 2015, the rule that a waiver of wages due is void, and how a wage claim moves to the department and the Court of Labor.
- 03The employer's duties in workers' social securityEmployer duties under Law No. 18 of 2023: yearly particulars, payment time limits, clearance, contractors and work injury.
- 04End-of-service entitlements under Labour Law No. 37 of 2015The end-of-service gratuity under Labour Law 37/2015: the two-week formula, the statutory exceptions, and how it differs from benefits under Law 18/2023.
- 05Which labour and social-security rules apply in the governorates and in the Kurdistan Region?The reach of Labour Law 37/2015 and Law 18/2023 in the governorates not organised in a region, and how work is organised in the Kurdistan Region.