Employee Rights and Benefits in Lesotho

Employee rights and benefits elaborates the current policies and the procedures in regards to the Lesotho Labour Code, these include leave policies, minimum wage, retirement benefits and employee well-being. These particular regulations are very critical in making sure there is fair treatment of all the employees and that there exists no discrimination. 

Lesotho is a landlocked country enclaved in the larger South Africa Lesotho, officially known as the kingdom of Lesotho. Situated in the Maloti mountains which are the highest in Southern Africa, it has become one of the most attractive markets in Africa, with companies in every industry eying to hire and start operations in the country. Companies that are expanding into new markets are able to achieve significant growth as products and services find new consumers. 

Minimum wage & Severance Pay

The minimum wage in Lesotho was recently revised starting 1^st May 2022, the general monthly minimum wage increased to LSL1,1881.00 for workers with less than a year of service. For employees with more than a year of service, the general minimum wage was increased to LSL2,053.00.

The Labor Code provisions severance pay in Lesotho, which is directly linked to the employee's length of service. Any employee who has served in the same company for more than one year is entitled to severance pay equivalent to their two weeks’ wages and paid at the end of each year’s service. However, the amount of severance pay is capped at some level, and the amount is always updated from time to time by the minister in consultation with the renowned Wages Advisory Board. However, severance is not payable to employees terminated due to misconduct. 

Leave Policies

Employees in Lesotho are entitled to a minimum of 12 working days as Annual Leave in a year; this means they are entitled to at least one day each month when in continuous employment by the same entity. This doesn't include the eleven national holidays enjoyed by all the citizens of Lesotho. 

Maternity leave is another mandatory statutory policy in Lesotho, and employees are generally entitled to twelve weeks, six weeks before confinement, and six weeks after. However, in case of any illness or complications during pregnancy, they are allowed up to eight weeks of leave. On the other hand, there is no statutory Paternity Leave in Lesotho. 

Sick leave is also a mandatory statutory policy in Lesotho; employees are entitled to unpaid sick leave during the first six months of employment working with the same company. Whenever the length of employment exceeds six months, employees are entitled to 12 fully paid sick leave days and up to 24 sick leave days with half pay within 12 months of continuous employment. 

Working Hours & Overtime Pay

The Employee Probation Period in Lesotho is set at a maximum of four months by the labor code. As soon as the probation period ends, the employment becomes permanent indefinitely. The normal working hours are 45 days a week within five or six days as the reference period. In a five-day workweek, employees are expected to work 9 hours a day; however, in a six day work week, they are to work 8 hours for the first five days and 5 hours on the sixth day. Overtime must be at most 11 hours a week; it is paid a supplement of at least 25% of their base wages. 

Termination of employment

Either party can terminate employment in Lesotho, and dismissal has to be objectively justified to expected employees' conduct and capacity. The employers must provide a written statement for the reasons for dismissing an employee. There are prohibited reasons for dismissal, including pregnancy, maternity, filing of a complaint against the given employer, and religion, among others. The statutory written notice period, as provided under the labor code, clearly stated that “unless otherwise stipulated in a collective agreement, the notice period will be as follow; 

• Seven days of notice period for less than six months of service, 
• Fourteen days’ notice for less than one year of service, 
• a month’s notice for a service of more than a year,
• A three-month notice for a service of more than ten years. 

Expansion into Lesotho

Lesotho is endowed with an affordable workforce with friendly regulations for investors. Companies looking to hire compliantly and start operations in Lesotho can do so in two ways which include; 

• Setting up a legal entity and hiring as a company

• Using an employer of records 

Setting up a legal entity can prove challenging and time-consuming hence companies resort to using an employer of records such as workpay to do the heavy lifting of employing and initiating the operations smoothly. To compliantly employ in Lesotho and avoid legal issues, companies need to understand the mandatory employee rights and benefits, which include; employees’ probation periods, leave policies, working hours, overtime, termination of employment, notice period, social security benefits, and severance, among others.

Final Observation

At the moment, Lesotho still needs a social security system in place for employed persons. The residents are subjected to income tax on a worldwide income, and non-residents are subjected to tax only on Lesotho source income.

The income tax is generally levied at known progressive rates starting from 20% to 30% of their income, while a flat rate of 40% is levied on trustees.