Annual leave under Iraqi Labour Law is a minimum entitlement that cannot be waived. Every employee covered by the Labour Law is entitled to paid annual leave after completing a qualifying period of service, with a longer entitlement for those performing arduous or harmful work. Questions frequently arise about how leave accrues, whether unused leave can be carried over, when it must be taken and whether it must be paid out on termination. Employers that do not manage leave carefully may face large liabilities for accumulated leave and claims from departing employees.
Clear policies, accurate records and active management of leave balances protect employers and ensure employees receive their entitlements.
The Labour Law No. 37 of 2015 provides for paid annual leave of not less than twenty-one days after a year of service, increasing to thirty days for arduous or harmful work, and provides that any agreement to waive minimum leave is void. It also addresses scheduling, division of leave and payment for unused leave on termination. Kurdistan Region applies its own labour framework.
Entitlement to annual leave under Iraqi Labour Law
Employees are entitled to at least twenty-one days of paid annual leave after completing a year of service. Employees performing arduous or harmful work are entitled to at least thirty days. Contracts and policies may provide more, but not less. Employers should identify which roles qualify as arduous or harmful.
Accrual and the first year
Leave entitlement arises after the qualifying period. Employers should define how leave accrues during the year and how it is treated for employees who leave before completing a year, consistent with the law.
Scheduling leave
Employers may schedule leave according to operational needs, but should allow employees to take their entitlement. Policies should explain how requests are made and approved. The law may require that a minimum portion be taken continuously, with the remainder divided.
Carry-over
Questions about carrying unused leave into the following year depend on the law and the employer’s policy. Because minimum leave cannot be waived, employers should encourage employees to take leave rather than accumulate large balances. Where carry-over is permitted, limits and deadlines should be set.
Payment in lieu
On termination, employees are generally entitled to payment for accrued but untaken leave. Employers should calculate this accurately using the correct wage base. Paying leave in lieu during employment instead of allowing it to be taken may conflict with the purpose of the law and should be approached with caution.
Public holidays and other leave
Annual leave is separate from public holidays, sick leave, maternity leave and other statutory leave. Public holidays falling during annual leave may not count against the annual leave entitlement, depending on the rules.
Records
Accurate records of leave entitlement, leave taken and balances are essential, both for management and for defending claims. Leave records should be reconciled with payroll. Employment law advice in Iraq can assist with policy and record design.
Financial reporting
Accrued leave balances represent liabilities. Employers should recognise them in the accounts and monitor them, especially in organisations with long-serving employees.
Common mistakes
- Policies granting fewer than twenty-one days.
- Not recognising thirty days for arduous or harmful work.
- Allowing unlimited accumulation of leave.
- Paying leave in lieu instead of allowing it to be taken.
- Miscalculating leave payout on termination.
- No reliable leave records.
Practical checklist
- State at least the statutory leave entitlement in contracts and policies.
- Identify roles qualifying for longer leave.
- Define accrual, scheduling and carry-over rules.
- Encourage employees to take leave each year.
- Pay accrued leave correctly on termination.
- Maintain accurate leave records reconciled with payroll.
Annual leave for rotational and site workers
Rotational schedules, such as 28 days on and 28 days off, are common in oil, gas and remote construction projects. Employers sometimes treat the off-rotation period as covering annual leave entitlement. Whether this is lawful depends on how the schedule is structured, how off-rotation days are paid and whether the arrangement complies with rest and leave requirements under the Labour Law. Employers should document how annual leave is provided for rotational staff, ensure that the employee receives at least the statutory entitlement as genuine paid leave and keep records showing leave taken. An undocumented assumption that rotation covers leave is a common source of claims at the end of employment.
Leave and termination
When employment ends, accrued but untaken leave is generally payable. Employers should calculate the balance accurately, using reliable records, and include it in the final settlement. Where records are poor, the employee’s claim may be accepted. Regularly encouraging employees to take leave, and recording leave taken, reduces both the financial liability and the evidential risk.
Leave during notice
Employers sometimes require employees to take accrued leave during the notice period. Whether this is permitted depends on the contract, internal regulations and the circumstances. Clear policies avoid disputes on this point.
Kurdistan Region
Leave entitlements for staff in Kurdistan Region should be checked against the Region’s labour framework.
Leave policies for foreign employees
Expatriate employees often expect leave arrangements linked to home travel, such as an annual flight home and longer leave blocks. These arrangements may be more generous than the statutory minimum and are acceptable, provided the statutory entitlement is preserved. Employers should make clear in the contract how home leave relates to annual leave, whether travel days count as leave and how unused leave is treated on termination, so that expatriate packages do not create disputes about overlapping entitlements.
Illustrative example. A company allowed employees to accumulate unused leave without limit. When several long-serving employees leave, they claim payment for years of accumulated leave, creating a large unexpected cost. The company introduces a policy requiring leave to be taken each year, sets limited carry-over and begins monitoring balances monthly.
Key takeaways
- Annual leave under Iraqi Labour Law is at least twenty-one days, or thirty for arduous work, and cannot be waived.
- Employers should manage scheduling and limit accumulation.
- Accrued leave is generally payable on termination.
- Accurate leave records are essential.
How Etihad Law Firm Can Help?
Managing annual leave under Iraqi Labour Law proactively ensures compliance and prevents costly accumulated liabilities.
Etihad Law Firm advises employers on leave policies, records and related claims in Iraq.