Madagascar Labour Law: What employers should know (EOR)

by Grant Geraghty | Apr 30, 2025 | Compliance

Looking to tap into Madagascar’s abundant natural resources? Don’t let a lack on information about the country’s administrative procedures and local customs halt your expansion there. As an African Employer of Record (EOR) in Madagascar we have compiled extensive information about the labour law and work customs in Madagascar.

This comprehensive guide, complete with real-world examples and practical tips, will help you better plan your expansion in Madagascar.

1. Employment Contracts in Madagascar

In Madagascar, written employment contracts are mandatory and must be drafted in French or in Malagasy. Contracts can be either:

- Fixed-term contracts (Contrat à Durée Déterminée or CDD): Typically used for seasonal work or temporary projects.

- Open-ended contracts (Contrat à Durée Indéterminée or CDI): The standard for ongoing employment relationships.

Take for example:

A French agribusiness expanding into Madagascar hires 20 seasonal workers for a 6-month harvesting period. These workers must be issued fixed-term contracts specifying duration, job description, and wages.

Alternatively, if an American software company was expanding into Madagascar and needed 3 full-time workers, they might first need to be issued fixed-term contracts during their probation period, which would then be renewed and replaced with open-ended contracts.

2. Working Hours & Overtime in Madagascar

The legal working week in Madagascar is 40 hours over five or six days. Overtime is permitted but must be compensated:

- 130% of base pay for the first 8 hours of overtime.

- 150% for additional hours or work on public holidays/rest days.

Take for example:

An international NGO that onboards administrative staff in Antananarivo, Madagascar’s capital. When these employees are required to work on a public holiday to support urgent logistics, their overtime must be compensated at the 150% rate.

3. Minimum Wage in Madagascar

The minimum wage in Madagascar, as in other African countries, is periodically reviewed by the government. In 2025, the SMIC (Salaire Minimum Interprofessionnel de Croissance) increased to 262680 MGA/month (approx. $59) up from 184653 MGA/month in 2024.

That being said, employers must also ensure they are compliant with sector-specific collective agreements, which may stipulate higher minimums.

4. Leave & Holidays in Madagascar

Madagascar offers several types of leave to workers:

- Annual leave: 2.5 days per month of work (totalling to 30 days per year).

- Sick leave which is granted with a medical certificate.

- Maternity leave up to 3 months.

- Paternity leave usually lasting up to 10 days, depending on agreements.

There are also 14 public holidays, including Independence Day (June 26) and Labour Day (May 1).

5. Termination & Severance in Madagascar

Termination procedures vary depending on the contract type and reason for dismissal. A notice period – served by either party – only begins at the date of receiving written notice of dismissal. Severance pay also depends on the employee’s length of service.

Additionally, unlawful termination can lead to court disputes and fines, making local expertise in Madagascar crucial. As an EOR in Madagascar, we have on-the-ground teams who understand the local work culture, local legislation, and who keep you up to code with the latest legislative changes.

6. Social Security & Payroll Taxes in Madagascar

Employers in Madagascar must register their employees with the Caisse Nationale de Prévoyance Sociale (CNaPS) and contribute to social security in the following ways:

- Employer contribution ~13% of gross salary

- Employee contribution ~1%

There are also other payroll charges, such as health insurance and pension contributions.

7. Unionisation & Employee Rights in Madagascar

Employees in Madagascar have the right to join unions and bargain collectively. Employers must respect union rights and are obligated to consult with staff representatives when making significant changes.

For example, if a mining company was restructuring its operations, it would have to engage in discussions with the employee union before layoffs, as mandated by Malagasy labour law, or risk legal repercussions otherwise.

Why use an EOR in Madagascar?

Labour law in Madagascar is more employee-centric than in other African countries, offering strong protections around wages, leave, and termination. For companies looking to expand into Africa, working with an experienced African EOR ensures a streamlined and compliant entry into the Malagasy market.

Understanding and complying with Madagascar’s labour law can be challenging to say the least, especially with changing regulations and local nuances, and considering the frequent use of French in the country and workplaces. By partnering with an African EOR like Africa HR Solutions: