Minimum wage in Morocco in 2019

Following the signature in April 2019 of an agreement between the General Confederation of Moroccan Enterprises (CGEM) and three trade unions, it was decided to increase the Minimum Wage (SMIG) by 10% over two years.

The first increase of 5% will be effective as of July 1, 2019, whereas a second increase of the same percentage will be applicable as of July 1, 2020.

The agreement also provides for an increase in family allowances of MAD 100 for each child up to three children starting from July 1, 2019.

This blog post will explore this subject to help entrepreneurs and company executives comply with current labour regulations and better understand its impact on their business.

 

1. What is the minimum wage in Morocco? Definition, obligations, and sanctions

 

Definition

 

By way of definition, the Guaranteed Interprofessional Minimum Wage (SMIG) corresponds to the lowest minimum hourly wage set by a regulation requiring employers not to pay salaries whose hourly rate is lower than the legal minimum wage.

The Minimum salary in Morocco (SMIG) was introduced in Morocco in the early 1980s as a means of protecting employees, increasing their purchasing power and guaranteeing a minimum income for Moroccan workers. It applies to both public sector and private sector workers.

As part of the kingdom efforts to promote social justice, the minimum wage has increased no less than twenty-two times since its inception.

 

Mandatory nature of the minimum wage

 

An employer may not grant an employee remuneration below the minimum wage (article 356 of the Labour Code), even if the latter expressly accepts it (section 360 of the Labour Code).

 

Sanctions in case of a breach of the minimum wage requirement

 

A fine of 300 to 500 dirhams is applicable in the event of payment of a salary below the minimum wage. The penalty is appropriate as many times as there are employees involved in this breach. However, the total fines cannot exceed a sum of 20,000 dirhams. In the event of a repeat offense, the penalty is twice the initial fine.

 

 

2. Gross/net Minimum wage amount

 

Method of calculation

 

In non-agricultural activities such as industry, trade and the liberal professions, the legal minimum wage corresponds to the basic hourly wage paid to the employee, plus any tips and wage accessories (allowances and benefits in kind).

In the agriculture sector, a specific minimum wage (SMAG) apply based on the basic daily salary paid to the employee, without taking into account any benefits in kind.

 

Hourly minimum wage rate in Morocco

 

Activity	Effective date	Rate
Agricultural	July 1, 2012	63.39 per day
Non-agricultural	July 1, 2019	14,133 dirhams per hour

 

For information, Morocco minimum wage in 2018 on an hourly basis was 13.46 MAD/ hour.

 

Cost of the minimum wage for the company

 

The monthly cost of the minimum wage for the equivalent of 191 working hours (full time job) is 3,268.01 dirhams. It is composed of the following elements:

 

Items		Amount in dirhams
Gross monthly minimum salary	191 hours	2,699.40
Employer's contribution to the CNSS	16.98%	458.36
Employer's contribution to the AMO	4.11%	110,95
Total cost for the company		3 268,01

 

Monthly minimum wage net amount

 

An employee paid at the minimum wage who works a full month (equivalent to 191 hours of work during the month) and who has only basic social security coverage (CNSS), will have a payslip as follows:

 

Items		Amount in dirhams
Monthly salary Gross	191 hours	2,699.40
CNSS employee contribution	4.48%	- 120.93
AMO employee contribution	2.26%	- 61.01
Net salary		2 517,46