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Comprehensive Guide to Employment Laws in Ghana

Ghana has a comprehensive legal framework that governs labor relations and employment practices. The Labor Act 2003 (Act 651) and the Labor Regulations govern Ghana’s employment and labor laws. 

The Labor Act in Ghana clearly distinguishes between a “contract of employment”. It includes an implied contractual term that the employer and employee have a duty of mutual trust and confidence. 

This page provides a comprehensive overview of Ghana’s labor code, which can help companies ensure compliance with employment rules when hiring and managing employees.

Applicability of the Act

The Employment Act in Ghana is implemented using various approaches such as setting a minimum wage, regulating working hours, overtime, and termination of employment, and ensuring workplace health and safety. The Ministry of Employment and Labor Relations oversees the enforcement of the Employment Act through the Labor Department. At the same time, labor organizations and unions play a significant role in advocating for workers’ rights and holding employers accountable. The employment law Ghana guide has some key points :

  • This applies to all workers and employers, except those in the armed forces, police service, prison service, and securities intelligence agencies.
  • It requires a written employment contract for six months or more work within a year. 
  • Every worker is entitled to receive equal pay for performing equal work, regardless of any distinctions or differences.
  • The labor laws require a minimum of 15 working days of annual leave per year of service. However, companies can provide more than the minimum amount of annual leave.
  • The Ghana National Pensions Act, 2008 (Act 766) covers the administration of Ghana’s Basic National Social Security Scheme. The employer’s contribution to the scheme is 13.0% of the basic salary.

Employment Contract

In Ghana, a written employment contract is required for work done for six months or some working days equivalent to 6. The Labor Act No 651 of 2003 consolidates and modernizes the different previous legislations related to labor in Ghana. Additionally, the Act incorporates provisions that align with the ratified International Labour Organization (ILO) Conventions.

An employment contract in Ghana can be written or oral, and it should clearly outline the employer and employee’s rights and obligations. After the employment begins, the employer must provide a written statement detailing the main terms of the employment contract within two months. This statement should include essential details such as job title, remuneration, working hours, and other relevant terms of employment.

The employment contract terms are negotiable, and employees can negotiate the contract offer when offered employment. There are three basic types of employment contracts in Ghana: permanent employment, casual employment, and temporary employment:

Permanent employment 

In Ghana, it is mandatory for employers to provide a written employment contract within two months of the employee’s start date. This contract should contain important details such as the worker and employer’s information, wage rate, job title and payment interval, work hours, annual leave, overtime payment, incapacity for work due to injury or sickness, and length of termination notice required by both parties. 

The employment contract should be for a continuous period until the employee reaches 60. Foreigners who want to work in Ghana must obtain a work permit, which requires the sponsoring company to apply to the Ghana Immigration Service (GIS) and provide sufficient justification for the foreign worker’s employment.

Casual employment 

The Labor Act governs informal jobs in Ghana, which applies to all workers and employers except those in the armed forces, police service, prison service, and securities intelligence agencies. Casual workers are those engaged in seasonal or intermittent work for up to six months, with remuneration calculated daily. Various casual job opportunities are available in Ghana, and job seekers can find them on job search websites. The Ghana Revenue Authority also provides information on Pay As You Earn (PAYE) for casual workers. Around 67% of working-age people in Ghana were dependent as of 2020.

Temporary employment 

In Ghana, temporary workers are entitled to receive the minimum wage and have specific working hours, rest periods, paid public holidays, compensation for working at night, and sick leave, as stated in the Act. This is applicable regardless of any terms that might have been previously agreed upon by both parties.

Key Provisions of the Act

The Constitution of Ghana and the Labor Act provides key provisions for employment and Ghana labor laws. The Constitution forbids discrimination based on race, sex, ethnic origin, creed, color, religion, or social or economic status.

The significant provisions of the Labour Act in Ghana are as follows:

  • The Act establishes public and private employment centers and registration of private employment agencies.
  • Protects the employment relationship and sets out general conditions of employment.
  • Employment laws prohibit any form of discrimination or harassment in the workplace. 
  • The Act sets minimum wage/salary levels.
  • The Act provides for fair and unfair termination of employment.
  • Employment laws in Ghana include provisions to promote equal employment opportunities for all individuals, including those with disabilities, young persons, and women.
  • The Act establishes a National Labour Commission.

Other key factors are:

  • Minimum wage: Ghana’s minimum wage is 14.88 cedis daily, effective January 1, 2023. This represents a 10% increase over last year’s minimum salary of 13.53 cedis. The minimum wage is mandated by law, and every worker in Ghana can be paid at least this statutory minimum salary. 
  • Work hours: As per the Ghana Labor Law, the maximum allowable working hours for an employee are 8 hours per day. The law also mandates a daily rest period of at least 12 consecutive hours between two successive working days and a weekly rest period of 48 consecutive hours every seven days of regular working hours.  
  • Severance pay: In Ghana, there is no fixed method for determining severance pay, as it is typically subject to negotiation between an employer and employee or labor union. Ghana labor laws dictate that individuals who have their employment terminated are eligible for compensation, including severance pay. However, there is no severance pay available in situations where a worker is terminated for non-economic reasons on an individual basis. The Ghana employment law termination is regulated by the Labor Act of 2003.
  • Maternity leave: According to the labor laws in Ghana paid maternity leave for pregnant employees is entitled to 12 weeks at 100% of their regular pay rate. Under Ghanaian labor laws, in the case of multiple or complicated births, maternity leave is extended to 14 weeks. Following maternity leave, a woman is entitled to one hour of leave during the workday to nurse her child until the child reaches the age of one. This provision aims to promote and support maternal and child health in the workplace.
  • Vacation time: Employees are entitled to at least 15 working days of paid annual leave after completing 12 months of continuous service. Public holidays cannot be deducted from annual leave. 
  • The key provisions of the employment act and Ghana labor laws aim to protect workers and ensure fair working conditions.


Section 124 (6) of the Labor Code in Ghana imposes penalties on employers who fail to comply with a decision or order issued by the Minister for Labor or one of the inspectors. The penalty takes the form of a fine, as well as compensation to any person who can provide evidence that they incurred losses, damages, or injuries due to the employer’s non-compliance.

Employers who illegally employ a foreign worker without due authorization are liable to pay a penalty of 5,000 cedis. The foreign national who takes up employment in Ghana without due authorization is liable to a fine of 2,500 cedis. The Act does not specifically restrict the length of a foreign worker’s assignment. 

Compliance Strategies for Employers

Employers in Ghana must comply with regulatory requirements to avoid penalties, fines, and damage to their reputations. Effective compliance strategies should include regular compliance audits conducted by experienced professionals with a deep understanding of the regulatory landscape in Ghana. 

Compliance audits help identify areas of non-compliance and develop strategies to mitigate compliance risks. Once a business understands the regulatory landscape in Ghana, the next step is to develop effective compliance strategies tailored to its specific needs.

Employers in Ghana must also follow the rules for employing foreign workers. Foreign workers may be authorized to work in Ghana through specific routes. The entity must hold good standing with the Registrar General’s Department, the Ghana Revenue Authority, the GIPC, and the sector regulator of the sponsoring entity. 

How Can Multiplier Help Businesses Stay Compliant?

Multiplier provides a comprehensive solution for companies with multinational employees by automating payroll, benefits, and compliance. It operates as an Employer of Record (EOR) platform, meaning businesses can legally and efficiently interact with their international employees in a new country without setting up a local corporation. This allows companies to act as legal employers for their employees and comply with all the labor regulations in Ghana.

Frequently Asked Questions

Yes, fixed-term employment contracts are generally permissible under Ghanaian labor and employment laws. The Labor Act does not preclude employers from hiring applicants for specific durations, nor does it state a maximum duration for fixed-term contracts.

If employees in Ghana experience issues related to employment, such as discrimination or unfair treatment, they reserve the right to file a complaint with either the Labor Department or the National Labor Commission. The complaint must state all relevant information and evidence to support the claim and must be in writing.

Foreign workers may be authorized to work in Ghana through either of the following routes: (1) obtaining a work permit from the Ghana Immigration Service or (2) registering with the Ghana Investment Promotion Centre (GIPC). The entity must have good standing with the Registrar General’s Department, the Ghana Revenue Authority, the GIPC, and (where applicable) the sector regulator of the sponsoring entity.

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