Social audit


Is social audit in Morocco of the same importance as other audits (accounting, tax, etc.)? Does social audit have its place in the daily life of a company? How do companies assess their compliance with current social regulations?

In Morocco, the dilemma that social audit presents us with takes place in an ever-changing environment. As a matter of fact, due to the continuous evolution of both, society and legislation, each economic actor requires tailor-made interventions, adapted to its unique characteristics, and needs. In other terms, auditing cannot be standardized and nor can it be applied mechanically to all companies. This is equally true for financial audits as it is for social audits.

Upsilon consulting is an accounting firm. Who are we?

Social audit: a measure of risk

The employee-employer relationship is one of the most critical components of a company’s environment. This can easily be noticed when assessing the importance it has been given by legislators, regardless of the country, the political regime and the economic system.

Indeed, labor law is one of the most detailed and evolving laws worldwide. It is frequently subject to modification to accompany the evolution of society. This law, as important as it is, remains more or less unknown to many. Of course, everyone is aware of the major features of labor law (wages, vacations, working hours, etc.). However, there are still some subtleties and intricate details that only professionals master.

The current Moroccan labor code has been in effect since 2003. This labor code defines the rules regarding employment. The Moroccan labor code is compliant with international standards as detailed in the conventions of the United Nations and its specialized organizations related to labor.

Keep in mind, for all intents and purposes, that labor law sides mostly with employees, and not with employers. This means that, in the event of a dispute, the above-mentioned subtleties of the labor code become important arguments, and their non-observance results immediately in penalties for the company.

Necessity of a social audit

As the name suggests, social audit assesses the quality and the respect of social obligations within an entity. Unlike statutory audits, social audits are not mandatory in Morocco. However, even though optional, a social audit is the ideal tool to contain its social risks and to cover them before a possible control of the labor inspection.

The social obligations a company has to respect are related to each phase of its development:

  • At the company’s creation
  • When hiring its first employees
  • When exceed a specific number of employees
  • And when conducting restructuring operations

What are the risks in case of social non-compliance?

The Labor Code provides for significant penalties for failure to comply with certain obligations.

Thus, for example, Article 78 of the Labor Code provides for sanctions in the following cases (non-exhaustive):

  • A fine going from 15,000 to 30,000 dirhams if the company does not respect the provisions relating to trade union freedoms;
  • A fine of up to 20,000 dirhams in case of non-delivery of a work card (500 dirhams per work card, without exceeding a maximum total of 20,000 dirhams); The penalty can be imposed as many times as there are controls;
  • A company is liable to a fine of 2,000 to 5,000 dirhams per employee if it does not provide employees with the information provided for in Article 24:
    • The collective labor agreement and, if applicable, its content;
    • Work schedules
    • Weekly day off
    • Legal provisions and measures regarding health and safety, and the prevention of risks related to machinery;
    • Pay date, time, and location
    • Registration number to the National Social Security Fund
    • The insurance company insuring them against work-related accidents and diseases

Additional penalties are applicable in several other cases, namely:

  • Failure to comply with notice period provisions;
  • Refusal to grant legal leaves of absence or failure to respect their legal duration ;
  • Non-compliance with the provisions of collective agreements ;
  • Failure to Display the Rules of Conduct;

In general, several mandatory provisions expose the company to sanctions in the event of a visit by the labor inspector. Obviously, the larger the employed workforce, the greater the costs of said penalties.

Thus, for large companies, a social audit is significantly more important due to their number of employees, even more so, since certain obligations require a minimum number of employees to be applicable.

That’s why we advise all the actors of the economic scene to consult their advisors and accountants to remain up to date with the evolution of the legal system.

Some social obligations in Morocco

In response to such a volatile situation whose consequences can weigh heavily on a company, both in terms of money and reputation, we will try to cover as social obligations as possible. Keep in mind that we will focus on the obligations provided for in the Moroccan labor code. We will address those known to all, as well as those less known, and will try to gather as many details as possible in order to build a kind of legal template that could serve as a basis for your internal social audit.

Employment contracts

The first obligation that an employer must respect is obviously related to the contractual formalism of the employment relationship between employers and employees. Several types of employment contracts exist, each with its own characteristics and a specific regulatory framework. Moreover, and like any other contract, to be valid, employment contracts must meet the conditions set forth in the Code of Obligations and Contracts : consent, capacity of the parties to contract, object and cause of the contract.

Again, regarding formalism, the legislation favors the establishment of written employment contracts by exempting them from registration fees. However, in certain cases, drawing up an employment contract in writing becomes mandatory. This concerns contracts for travelers, representatives, or salesmen as well as subcontracts.

Furthermore, according to article 16 of the Labor Code, and regarding the duration of employment contracts, they can be concluded for an indefinite period, for a fixed term or to perform a specific job. The legislator, with the objective of promoting job stability, has restricted the scope of application of fixed-term contracts. In fact, a fixed-term contract can only be concluded in the following situations:

  • To replace an employee whose employment contract is suspended, with the exception of suspensions resulting from strikes.
  • To manage a temporary increase in the company’s activity
  • When the work at hand is of a seasonal nature


The decision to hire an employee translates legally into a plurality of obligations that the employer must respect. However, before getting to these obligations, there is a critical key element that must be taken under consideration : Discrimination.

Indeed, the law clearly prohibits employers from making their decisions to hire or not to hire on the basis of discriminatory arguments. This legislative will to protect the principle of equal opportunity is not limited to the act of hiring. It also concerns :

  • Conduct and work assignment
  • Professional training
  • Salary, promotion and benefits
  • Disciplinary measures and termination of employment.

Following the same mindset, the Moroccan legislation refers once again to another universal principle: child labor. Here again, the legislation is absolutely decisive: a total ban on the employment of minors under the age of 15. Moreover, once the age of 15 has been reached, employed minors stay under the protection of the law. This means that labor inspectors have the power to assess working conditions and health of employed minors at any time.

Obviously, failure to comply with either of these two obligations results in serious penalties for companies.

Post-employment obligation

Once an employee is hired, certain obligations become valid. We are referring to the different documents an employer must deliver to his employees. Indeed, the law imposes that the employer delivers to his employees, in writing and at the time of hiring, all provisions and terms relating to their jobs, namely:

  • The collective labor agreement and, if applicable, its content;
  • Work schedules
  • Weekly day off
  • Legal provisions and measures regarding health and safety, and the prevention of risks related to machinery;
  • Pay date, time, and location
  • Registration number to the National Social Security Fund
  • The insurance company insuring them against work-related accidents and diseases

Work cards

Likewise, the employer is required to issue work cards to his employees. These compulsory work cards must contain a set of information defined by regulation, and which are, amongst others:

  • Employer Information :
    • Company name, if the employer is a legal entity, or the full name of the employer if not
    • Registration number to the National Social Security Fund
    • Registered office of the company, if the employer is a legal entity, or the address of the employer if natural persons.
  • Employee information :
    • Employee’s full name
    • Date of birth
    • Date of effective employment
    • Employee’s function
    • Salary
    • Employee’s National Social Security registration number,
  • Name of the insurance company.

Internal bylaws

As the name suggests, the company’s internal bylaws are a collection of rules that govern the internal life of the company, the internal procedures, and the overall organization of the company. Contrary to the documents presented above, the obligation to have internal bylaws does not apply to everyone. Indeed, only employers who usually employ at least ten employees are required to establish internal bylaws. These rules must be drawn up after having been communicated to the employees’ representatives and to the trade union representatives in the company, if any. These internal regulations are submitted to the governmental authority in charge of labor for approval.

Another particularity of the internal bylaws is that the company has a period of 2 years from its opening or establishment to write them. In addition, the employers to whom this obligation applies must bring these regulations to the attention of the employees. In fact, Article 140 of the Labor Code obliges the employer to post the internal bylaws in a place usually frequented by the employees and in where they are usually paid.

Collective labor agreements

The Labor Code, in Article 104, defines collective labor agreements as collective contracts that govern labor relations. The parties to a collective agreement are:

  • On the one hand, one or more employers contracting in their personal capacity, or the representatives of one or more professional employers’ organizations,
  • On the other hand, the representatives of one or more of the most representative employee trade union organizations.

Of course, the following two obligations are only applicable if the companies are parties to a collective labor agreement.

  • The first obligation is an obligation of formalism. Indeed, collective agreements must, under penalty of nullity, be established in writing.
  • The second obligation is also of an administrative nature: every collective labor agreement must be filed without charge, in the care of the most diligent party, with the clerk of the competent court of first instance of any place where it is to be applied and with the governmental authority in charge of labor.

Occupational medicine

The Labor Code requires companies to have an occupational medical service in two cases:

  • If the company has over 50 employees
  • If the work exposes employees to occupational diseases

In addition, industrial, commercial and handicraft enterprises, as well as agricultural and forestry enterprises and their dependencies that do not meet the above-mentioned conditions, must set up independent or joint occupational health services under the conditions established by the government authority in charge of labor.

Of course, physicians operating in occupational health services must hold a diploma attesting that they are specialists in occupational medicine. Being registered with the Order of Physicians and having the authorization to practice medicine are two criteria that all occupational physicians must meet.

Additionally, companies obliged to have an independent occupational medical service must have an occupational physician present during all working hours.


As mentioned before, certain legal obligations only become mandatory when a certain number of employees is reached or when certain conditions are met. The following cases represent some obligations that are valid under certain conditions.

  • Company employing disabled employees

In this case, the employer must equip its premises with the necessary accommodations to facilitate the work of disabled employees and ensure that they are provided with all the necessary health and safety conditions. In addition, employers must submit to a medical examination the disabled employees they intend to hire. The occupational physician conducts this examination annually.

  • Safety and hygiene committee

To avoid any possible confusion, let us first state the following: monitoring the hygiene and cleanliness conditions of its premises is mandatory for any company, regardless of its size or other. However, once a company reaches 50 employees, having a safety and hygiene committee becomes mandatory.

  • Special nursing room

Another obligation conditioned by the number of employees in a company would be to provide a special nursing room. This room must be within the company or in its immediate vicinity. However, it is only applicable when the company employs at least 50 female employees over the age of 16.

Termination of the employment contract

The termination of an employment contract can occur for different reasons:

  • End of contract (for fixed-term contracts),
  • Mutual agreement,
  • Dismissal for serious misconduct,
  • Economic dismissal,
  • Liquidation of a company…

Nevertheless, the Labor Code has defined rules that govern these situations.

The first general obligation (Article 72 of the Labor Code) is to issue a work certificate. Upon termination of the employment contract, the employer must give the employee a work certificate within a maximum of eight days, under penalty of damages.

The second obligation to be respected in terms of termination of an employment contract is the notice period. These vary depending on the type of contract in question.

The third aspect of the termination of employment contracts is the dismissal for serious misconduct. This is an extremely delicate matter, which often results in legal or judicial procedures. Indeed, the employer must prove the reason for the dismissal for serious misconduct. This can take several forms, including

  • Theft
  • Breach of trust
  • Disclosure of privileged information
  • Serious insult

And that is not all.

To substantiate the grounds for serious misconduct, the employer calls on the labor inspector. The inspector will note the violation committed and will then write a report.

In addition, when an employment contract is terminated, regardless of the reason, the Labor Code requires the payment of compensation for paid leave. Indeed, article 254 of the Labor Code specifies that this indemnity is due regardless of the reasons for termination.

Normal working hours

The normal working time for employees is 44 hours per week in non-agricultural activities, without exceeding 10 hours per day. This daily limit may be broken under certain conditions. These are detailed in article 192 of the labor code which states the following :

“When in a company, urgent work must necessarily be performed immediately to prevent imminent dangers, to organize rescue measures, to repair accidents to either the equipment, installations or buildings of the company, or to prevent the decay of certain materials, the normal working hours may be extended for one day and then at the rate of two hours for the following three days.”

In contrast to non-agricultural activities, the overall annual working time is 2496 hours for an agricultural activity. The organization and distribution of these working hours vary according to the needs of the crops and its determination is the responsibility of the competent government authority.

Vacations and days off

Companies must give their employees a weekly rest period. This rest is at least 24 hours long, from midnight to midnight. The weekly rest must be granted simultaneously to all employees of the same establishment.

In addition to the weekly rest period, companies also grant, according to the legal provisions, rest on paid holidays and public holidays.

Another legal provision relating to vacations concerns paid annual leave. The minimum duration of this leave is :

  • One and a half working days per month of service
  • Two working days per month of service for employees under the age of 18.

In addition, the duration of paid annual leave increases by one a d a half day for each full period, continuous or otherwise, of five years of service. However, such increase cannot bring the total leave to more than thirty working days. In any event, during their paid annual leave, employees shall receive an allowance equivalent to that which they would have received had they been on duty.

Besides, the Labor Code describes another type of leave which concerns newborns. In fact, for each birth, the employee is entitled to three days of leave.

Finally, in the case of family events, employees are granted time off work. These events include, amongst others, the marriage and death of a loved one.


Legal Minimum Wage

One of the most important parts of the labor code is the wage. One of the basic legal provisions is undoubtedly the compliance with the legal minimum wage. Recently amended under Decree No. 2.19.424 published in the BO of June 27, 2019, the minimum wage is as follows:

The minimum wage applies to liberal professions and to industrial and commercial sectors. It is established at an hourly rate of 14.81 MAD. So, a monthly SMIG of 2828.71 MAD on the basis of 191 working hours per month.

  • Guaranteed Minimum Agricultural Wage (SMAG)

The SMAG concerns agricultural activities and is established at a daily rate of 76.70 MAD. Meaning, a monthly SMAG of 1994.20 MAD on the basis of 26 working days per month.

Seniority Bonus

Seniority bonus takes into account, for its determination, the salary itself, its accessories as well as the increases for overtime, excluding certain elements specified in Article 353 of the Labor Code. These exclusions include:

  • Family benefits
  • Tips, except for employees paid exclusively by tips
  • Gratuities awarded
  • Profit sharing
  • Allowances or bonuses whose purpose is to reimburse or compensate employees :
    • Expenses incurred by them in the course of their work
    • From an unfavorable situation,
    • The performance of arduous or dangerous work…
  • Allowances for temporary replacement of an employee in a higher-grade position.

Furthermore, the seniority bonus must be paid under the same conditions as the salary:

  • First, in Moroccan currency
  • Secondly, by respecting the legal frequencies.

Finally, it should also be noted that the seniority bonus is subject to increase and follows the following scale

  • 5% of the salary paid, after two years of service ;
  • 10% of salary paid, after five years of service ;
  • 15% of the salary paid, after twelve years of service ;
  • 20% of the salary paid, after twenty years of service ;
  • 25% of the salary paid, after twenty-five years of service.

Book and pay slips

In general, employers or their representatives must keep in each establishment or part of an establishment or workshop, a so-called payroll book, established according to the model set by the government authority in charge of labor. From a legal point of view, the employer must keep this payroll book for a minimum of two years from its closing.

In addition, at the time of payment of wages, the employer delivers to its employees their pay slips. This document, which plays the role of a supporting document, must include certain information set by the government authority in charge of labor.

Employee representative – Works council :

The legal provisions on employee representatives apply to companies with at least 10 employees. These companies must have an employee representative and a special register for them.

For companies with at least 50 employees, a new obligation is added: that of having a works council.

Social Audit – Conclusion

In recent years, or even decades, a global movement linking corporate reputations to the well-being of their respective environments has gained momentum. Today’s world is asking whether companies are eco-friendly, adopt anti-pollution standards, participate in sustainable development… This philosophy is centered on corporate responsibility. One of the key components of this philosophy is whether the company takes care of its employees. The respect of regulations and rights of employees directly affects the image of the companies.

The social audit is a tool at the disposal of employers to ensure continuous compliance with the provisions of the law. In addition, conducting a social audit is a signal that the company is seeking to control its current state and to improve it. Thus, conducting a social audit on a regular basis avoids the costs of non-compliance with the law and preserves and strengthens your reputation, both internally, with your employees, and externally, with third parties.

You have a specific need, ask for a quote in a few clicks.


Accounting in Morocco

Transfer of shares : Comparison between SA and SARL

Business difficulties in Moroccan law