Global HR Compliance in Madagascar
Madagascar’s employment compliance is shaped by rigid statutory rules, limited administrative capacity, and regionally inconsistent enforcement. Labour law formally regulates every aspect of the employment relationship, from contract type and renewal limits to dismissal grounds and wage structure, but in practice, enforcement often varies depending on sector, location, and government resourcing.
Fixed-term contracts are restricted both in duration and renewability, and often default to indefinite status when mishandled. Minimum wage thresholds are not only sector-specific but adjusted based on the employee’s tenure, requiring careful payroll calibration. Immigration compliance remains a pain point, particularly for employers bringing in foreign expertise, with delays and opaque local interpretation common across jurisdictions.
Foreign companies operating in Madagascar must take a structured, documentation-heavy approach to HR compliance. Local knowledge, procedural rigour, and proactive risk mitigation are essential to avoid disputes, regulatory penalties, or workforce disruption.
Madagascar: Hiring and Firing Guide
Employment contracts
Employment contracts in Madagascar are governed by the Labour Code and must comply with general legal principles including mutual consent, lawful cause, and legal capacity. Contracts may be indefinite or fixed-term.
All employment agreements must be documented in writing, either in Malagasy or French, and issued in duplicate. The contract must clearly state the employee’s role, classification level, base salary, and start date.
A written contract is not mandatory to prove the existence of an employment relationship; courts may accept alternative forms of evidence. Contracts are exempt from stamp duty and registration fees.
Fixed-term contracts must contain a clearly defined duration or be linked to a predictable event. These contracts are limited to two years and are only allowed in specific circumstances. They may not cover roles tied to the ongoing operational activity of the employer unless justified by the nature of the work.
Fixed-term contracts with a minimum length of six months are automatically converted into indefinite contracts after two renewals. A break of less than one month between contracts in the same role is considered a continuation of employment and counts as a renewal.
Minimum Statutory Employment Conditions
Hours of work
The legal monthly limit for working hours in most sectors is 173.33 hours. In the agricultural sector, hours are calculated annually, capped at 2,200 hours. Daily and weekly work limits, overtime rules, and rest periods are regulated by government decree. Overtime must be remunerated at enhanced rates and must comply with sector-specific caps.
Probationary period
Employers may include a probationary period of up to six months in an employment contract. This period may be renewed once, and any renewal must be mutually agreed upon and documented in writing.
The probationary period allows either party to terminate the relationship with reduced obligations, but it does not override statutory protection against unjustified dismissal.
Annual leave
Employees earn 2.5 days of paid annual leave for every month of effective service. This entitlement is separate from public holidays and weekly rest days. Unused leave must be paid out upon contract termination unless otherwise provided for by collective agreements.
Parental leave
Pregnant workers are entitled to fourteen consecutive weeks of maternity leave, including a mandatory minimum of eight weeks following childbirth. This may be extended by up to three weeks if a licensed physician certifies a medical complication linked to the pregnancy or postpartum condition.
Employees receive half their salary during this period, funded by the National Social Welfare Fund or, if unavailable, directly by the employer. Additional compensation includes reimbursement of childbirth-related medical expenses within regulated limits.
During maternity leave, the employer is prohibited from dismissing the employee or altering the terms of employment. Termination by the employee on medical grounds requires no notice and does not trigger liability for indemnity.
Sick leave
Employees are entitled to a minimum of five paid sick days per year. Longer-term illness or disability is subject to medical certification and handled under broader social insurance provisions. Employers may be required to extend sick pay under collective bargaining agreements or enterprise policy, but the statutory floor remains limited.
Minimum wage
As of January 2025, Madagascar enforces a tiered minimum wage structure that differentiates by sector and employee tenure.
For employees with less than three years of service, the monthly minimum wage is 262,680 Malagasy Ariary in the non-agricultural sector and 266,500 Ariary in the agricultural sector. For employees with three or more years of service, slightly higher thresholds apply. Hourly equivalents are calculated based on the applicable sectoral working time regulations.
These updated minimums are binding and enforceable by labour inspectors. Employers must align their payroll systems accordingly to remain compliant.
Termination and Dismissal
Fixed-term contracts
A fixed-term contract must run its full course unless early termination is provided for in the contract or justified by gross misconduct or force majeure. Unilateral early termination outside of these cases exposes the terminating party to liability for damages. Repeated renewals or contract interruptions of less than one month may legally convert the contract into one of indefinite duration.
Indefinite-term contracts
Indefinite contracts may be terminated by resignation, dismissal, mutual agreement, or judicially confirmed force majeure. Except in cases of gross misconduct, the terminating party must provide notice. Where notice is not respected, the party responsible must compensate the other for the full value of the missed notice period, including wages and all related benefits.
Gross misconduct permits immediate termination without notice, but the burden of proof rests with the employer. The Labour Code mandates that dismissal must be based on real and serious cause. Employers are expected to document disciplinary steps and ensure that dismissals are not arbitrary or retaliatory. Courts routinely examine whether proper procedures were followed.
Acumen International: Employer of Record in Madagascar
Service Scope
Acumen International enables international employers to legally hire and compensate local and foreign professionals in Madagascar through our Employer of Record model.
We provide compliant employment contracts, payroll execution, employee benefits administration, and ensure legal registration of all employment relationships. This allows companies to enter the Malagasy labour market without setting up a legal entity and with full legal continuity.
Employer Responsibilities
Acting as the legal employer, we manage all obligations relating to taxation, social security contributions, employee benefits, contract enforcement, and end-of-service liabilities.
Our approach insulates your business from compliance risks arising from rapidly changing wage laws, dismissal rules, and sector-specific employment norms.
We ensure every aspect of the employment relationship is documented, traceable, and lawful under current Malagasy regulations.
Immigration Support
For companies employing expatriate staff, we handle visa and work permit sponsorship procedures. This includes coordinating application submissions, renewals, and immigration status monitoring with the relevant authorities in Madagascar. Our immigration support ensures that foreign professionals are hired and retained without exposing the company to documentation errors or unauthorised employment.