The Employer Violations That Trigger Albanian Labor Inspectorate Penalties: What Every Worker and Business Owner Must Know

Employment in Albania is governed by the Labor Code (Kodi i Punës), Law No. 7961/1995, as comprehensively amended most recently in 2023. The Labor Code applies to all employment relationships where work is performed in Albania, regardless of the nationality of the employer or employee. Foreign nationals employed legally in Albania have the same labor rights as Albanian citizens — there is no second-class employment status for foreigners.

The Labor Code sets minimum standards that cannot be contracted away — any contract provision offering less than the Labor Code minimum is void, and the statutory minimum applies automatically. Employers can offer more favorable terms than the Code requires, but cannot offer less. Collective bargaining agreements (where they exist) may establish sector-specific standards above the statutory minimums.

Every employment relationship must be covered by a written contract signed before work begins. Oral contracts are legally valid but heavily disfavored — without a written contract, the employer bears the burden of proving the terms of the relationship. The contract must include:

• Names and addresses of employer and employee
• Position/job title and description of duties
• Workplace location
• Starting date and, if fixed-term, the end date
• Duration of any probationary period (maximum 3 months under Article 142 of the Labor Code)
• Gross salary and salary payment date
• Working hours per day and per week
• Annual leave entitlement
• Notice period for termination

The employer must declare the new employee to the tax authority (DPT) at least one calendar day before work begins. It is this declaration -- not a labor filing -- that triggers enrollment in the social insurance and health insurance systems, and failing to make it is what carries the unregistered-employee fine under Law 9920, Article 119 (plus back tax and contributions). Separately, the State Labor Inspectorate (Inspektorati Shtetëror i Punës) enforces the obligation to have a signed written employment contract in place (Kodi i Punës, Article 202). Both obligations apply, and leaving the employee undeclared also leaves them without proper social insurance coverage during the unregistered period.

The Albanian minimum wage is set by Council of Ministers decision. As of 2026, the minimum monthly gross wage is ALL 50,000 (~EUR 480), effective January 1, 2026 under Council of Ministers Decision No. 776/2025.

Salaries must be paid at least monthly on a fixed date specified in the contract. Payment must be made in Albanian lek (ALL) for work performed in Albania. Employers may not make deductions from wages beyond those authorized by law (income tax withholding, social insurance contributions, court-ordered garnishments). Unauthorized deductions — for breakage, customer complaints, uniform costs — are illegal. For a breakdown of contribution rates, see our social security guide.

For reference, average gross monthly salaries in Tirana by sector (2026 estimates):

• IT/tech professionals: ALL 100,000-300,000 (~EUR 960-2,880)
• Finance and accounting: ALL 60,000-150,000 (~EUR 580-1,440)
• Hospitality and retail: ALL 40,000-70,000 (~EUR 385-670)
• Construction workers: ALL 40,000-80,000 (~EUR 385-770)
• Healthcare (public sector): ALL 60,000-120,000 (~EUR 580-1,150)

Annual leave: Minimum 22 working days per year (the statutory floor since Law 91/2024, in force 24 August 2024). Employees earn leave proportionally during their first year. Leave must be given during the work year, or at the latest by the end of the first quarter — 31 March — of the following year. Leave must be paid at the employee's normal salary rate.

Public holidays: Albania has around 14 official public holiday days per year (several dates move each year -- the two Bajram holidays and the Orthodox and Catholic Easters). Work on public holidays is either compensated at double rate or compensated with an equivalent day off, at the employee's choice. The official Albanian public holidays are: New Year (January 1-2), Summer Day (March 14), Nevruz (March 22), Catholic Easter, Orthodox Easter, May Day (May 1), Fitër Bajrami (Eid al-Fitr), Kurban Bajrami (Eid al-Adha), Mother Teresa Day (September 5), Independence Day (November 28), Liberation Day (November 29), National Youth Day (December 8), and Christmas (December 25).

Sick leave: For the first 14 days of illness, the employer pays sick leave at 80% of daily salary. From day 15 onward, the Social Insurance Institute (ISSH) pays sick benefits at 70% of the average daily wage for the past 12 months where the employee has less than 10 years of insurance coverage, or 80% where they have 10 or more years, continuing up to 6 months of consecutive illness.

Maternity leave: 365 calendar days of maternity leave (see our maternity and parental leave guide), of which 35 days must be taken before the expected birth date. The first 150 days are paid at 80% of salary by ISSH (social insurance). The remaining days are partially compensated through a state benefit scheme. Fathers are entitled to 3 days of paid paternity leave at the time of childbirth.

Albanian Labor Code protects employees from arbitrary dismissal. Employers can terminate an employee only for defined legitimate reasons:

• Disciplinary grounds: Serious breach of work duties, gross misconduct
• Economic/organizational grounds: Genuine redundancy, business restructuring
• Performance grounds: After documented process including a warning and opportunity to improve

Notice periods depend on years of service:

• Up to 6 months employment: 2 weeks notice
• 6 months to 2 years: 1 month
• 2-5 years: 2 months
• 5+ years: 3 months

Employees must be given a written dismissal notice stating the reasons for termination. Verbal dismissal is invalid. Wrongful termination entitles the employee to compensation set by the Labor Code: up to 2 months' salary for a breach of the dismissal procedure (Article 144), and up to 12 months' salary where the dismissal was without reasonable cause (Article 146). In addition, employees with at least 3 years of service are owed a mandatory seniority reward of at least 15 days' salary for each full year of service (Article 145). These awards come on top of pay for the applicable notice period.

Employees on maternity leave, sick leave, or annual leave cannot be terminated during those protected periods. Trade union representatives have enhanced protection against dismissal.

Disclaimer: The information in this article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Cross-border tax structuring requires professional analysis of your specific circumstances. We recommend consulting with a qualified tax advisor before making decisions based on this content.