Nigeria Employment Law: The Essential Guide for Foreign Businesses
Nigeria is an African giant.
A population of 200 million, being the largest oil and gas producer in Africa, and a GDP estimated at around $290 billion in 2025 make it stand out to investors.
Further still, in the current context of surging oil and gas prices, Nigeria is receiving growing attention from the international community, particularly for its Dangote refinery. But the interest for Nigeria goes well beyond petroleum. It extends to the booming telecommunications industry, and the historically important agriculture sector.
To tap into these opportunities, businesses should understand the workings of the country: from the culture, to the way business is done, and even right down to the law itself.
In this article, our Nigeria experts expand on some key labour laws every business should know about before expanding into the country.
Nigeria's key industries
Petroleum & Gas
Nigeria is the world’s 12th largest producer of oil, and also holds the largest natural gas reserves on the continent.
The nation’s petroleum industry is the backbone of its economy, holding roughly 37 billion barrels of crude oil and over 210 trillion cubic feet of natural gas reserves. As such, it drives about 65% of government revenue and 85% of export earnings.
Telecommunications
Again at the top of the list, the Nigerian telecommunications industry is Africa’s largest and telecom market, with an estimated market size of $4.76 billion, over 179 million active subscriptions, and a major contribution of over 12% to the nation’s Gross Domestic Product (GDP). This sector supports rapid growth in the data economy, fintech, and enterprise connectivity.
Agriculture
Agriculture is a vital pillar of Nigeria’s economy.
It provides jobs for nearly 50% of the working population and makes up about 24% of the gross domestic product. Staple crops include cassava, maize, yam, guinea corn, beans, and millet. Nigeria is also a top global producer of sorghum, cocoa beans, and palm oil.
Nigeria's Labour Law
Employment Contracts in Nigeria
Employers must give a written statement of employment terms within 3 months of the start date, covering role, wages, notice periods, hours, holidays, and sick pay. Any changes must be communicated within 1 month.
Workers must have a medical examination at the employer's expense, with some exemptions for agricultural or low-risk work.
Workers under 16 cannot enter employment contracts (except for apprenticeships).
Contracts cannot make trade union membership, or non-membership, a condition of employment, or be used to penalise workers for union activity.
Contract transfers between employers require the worker's free consent and labour officer approval.
Employer Obligations
Employers must provide suitable work on each working day a worker presents themselves fit for duty or pay wages as if they had worked. Exceptions apply for short-term emergencies (up to a week) or disciplinary suspension.
Plantation workers on day-rate contracts must be offered work on at least 24 days a month.
Employer registration
The Minister can make regulations requiring employers to register, either generally or for specific classes or areas.
Regulations can cover how registration works, who maintains the register, and when employers can be refused registration or struck off.
Employers can be barred from employing citizens as workers if they aren't registered.
Breaching registration regulations carries a fine of up to N1,500 or up to two years' imprisonment, or both.
Working Hours & Overtime in Nigeria
Normal working hours are set by agreement, collective bargaining, or a wages board, and anything beyond normal hours counts as overtime.
Workers doing 6 or more hours a day are entitled to at least 1 hour of rest in total, and extra breaks for continuous or strenuous work.
Workers get one full rest day (24+ hours) every seven days, with compensating time off or overtime pay if this is reduced.
Workers travelling 16km or more to a worksite are entitled to free transport or an allowance.
Night work for women
Women generally cannot be employed on night work in industrial or agricultural undertakings.
Exceptions exist and apply to nurses and women in non-manual management roles. Additionally, defences exist for unforeseeable, non-recurring interruptions, or where perishable materials need urgent processing.
"Night" is defined as at least 11 consecutive hours including 10pm to 5am for industrial work (reducible to 10 hours for up to 60 days a year in seasonal cases), or at least 9 hours including 9pm to 4am for agricultural work.
The Minister can exempt women covered by a collective agreement permitting night work, provided adequate transport and protection arrangements exist.
Employer of Record (EOR) in Nigeria: how it helps
An employer of record (EOR) in Nigeria provides support in many important ways: expansion into the country without entity registration, employee onboarding, legally compliant procedures and modes of operation, payroll, and employee benefits administration among many others.
Africa HR Solutions has been providing recognised and trusted EOR services in Africa for over 15 years. To find out how we can best help you during your expansion to Nigeria, speak with one of our EOR and payroll experts today.
Wage payments in Nigeria
Wage Payments
Wages must be paid in legal tender only.
Any contract paying wages another way is void. Interestingly, employers can provide food, housing, or other benefits as part of pay, with the exception of alcohol and drugs.
Wages cannot be tied to conditions about where or how a worker spends them and cannot be paid on premises selling alcohol or retail goods (except for workers employed there). Wage advances are capped at one month's pay, with a minimum three-month repayment period and no interest or discount charges.
Deductions
Deductions are generally prohibited except for approved reasons: employer-authorised deductions for worker misconduct (with labour officer consent), pension contributions, trade union dues, or overpayment recovery (limited to the three months before discovery).
Total deductions in any month cannot exceed one third of wages.
Wages are due at the end of each pay period, with a maximum interval of 1 month.
Payment Records
Employers must keep records of wages and conditions of employment.
For any worker who has received a written contract, employers must record: name and address, town or place of origin, date of birth, next of kin details, date and place of engagement, National Provident Fund number, and date employment ended.
These records must be kept 3 years after the relevant period.
Returns and statistics
The Minister can require employers to submit periodic or one-off returns and statistics on employee numbers, pay rates, and other employment conditions.
Failing to provide required returns or statistics is an offence, carrying a fine of up to N200 on conviction.
Leave & Holidays in Nigeria
Maternity Leave
A woman can leave work with a medical certificate confirming confinement is expected within 6 weeks. She also cannot be made to work during the 6 weeks following confinement.
If continuously employed for 6 months or more before her leave, she must be paid at least 50% of her normal wages during this absence, regardless of minimum wage rules.
She's also entitled to 2 half hour breaks a day for nursing, applying to both legitimate and illegitimate children.
Employers are not liable for her pregnancy or confinement-related medical expenses.
She cannot be dismissed, or given notice that would take effect, during this protected absence, or during a longer absence certified as arising from pregnancy or confinement (up to a prescribed limit).
Sick Leave
After 12 months of continuous service, workers are entitled to at least 6 paid working days of annual leave (12 for under-16s). This can be deferred by agreement, up to 24 months.
Employers cannot pay wages instead of leave while the contract is still active.
Workers get up to 12 paid working days of sick leave per year, with a medical certificate, provided they remain willing and able to work otherwise.
Termination in Nigeria
Notice & Termination
Either party can end a contract by giving notice. Required notice periods scale with length of service:
- 1 day (under 3 months)
- 1 week (3 months to 2 years)
- 2 weeks (2 to 5 years)
- 1 month (5 years or more)
Notice of one week or more must be in writing. Parties can waive notice or accept payment in lieu. All owed wages must be paid by the end of the notice period.
Redundancy
Employers must inform the relevant trade union or worker representatives of the reasons and scale of any redundancy. The "last in, first out" principle applies, adjusted for skill, ability, and reliability.
Employers must negotiate redundancy payments where not already covered by regulation.
Disclaimer: The information contained in this article is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to this article or the information, products, services, or related graphics contained therein for any purpose.
Frequently Asked Questions
Do employers in Nigeria have to provide a written contract?
Yes.
Employers must give employees a written statement of their employment terms within 3 months of the start date. This should cover the role, wages, notice periods, working hours, holidays, and sick pay. If any of these terms change, the employer must inform the worker within 1 month.
What is the minimum notice period for ending employment in Nigeria?
Notice periods depend on length of service.
Employees with fewer than 3 months of service are entitled to one day's notice, rising to 1 week for 3 months to 2 years of service, 2 weeks for 2 to 5 years, and 1 month for 5 years or more. Any notice of a week or longer must be given in writing, and either party can choose to accept payment in lieu of notice instead.
How much maternity leave are employees entitled to in Nigeria?
Women can take leave once a medical certificate confirms confinement is expected within 6 weeks, and they cannot be required to work during the six weeks following confinement. Those with 6 months or more of continuous service before their leave must be paid at least half their normal wages during this time, and they cannot be dismissed during this protected absence.
Are there restrictions on working hours and rest periods?
Normal working hours are set by agreement, collective bargaining, or a wages board, with anything beyond this counting as overtime. Workers doing 6 or more hours a day are entitled to at least an hour of rest, and everyone is entitled to one full rest day of 24 hours or more every 7 days.
What are the rules on wage deductions in Nigeria?
Deductions from wages are generally prohibited unless they fall into approved categories, such as pension contributions, trade union dues, employer-authorised deductions for misconduct, or recovery of overpayments made within the previous three months.
Total deductions in any single month cannot exceed one third of an employee's wages.
How can foreign businesses employ staff in Nigeria without setting up a local entity?
This is where an employer of record comes in.
An EOR allows a foreign business to onboard staff in Nigeria without registering a local entity, while handling onboarding, payroll, benefits, and compliance with Nigerian labour law on the company's behalf.
