11. Labor Policies and Practices
Albania’s labor force numbers around 1.22 million people, according to official data. After peaking at 18.2 percent in the first quarter of 2014, the official estimated unemployment rate has decreased in recent years, falling to 11.2 percent at the end of 2019 compared to 12.3 percent in December 2018. However, unemployment among people aged 15-29 remains high, at 21.4 percent. The effect of the 6.4-magnitude earthquake in November 2019 and the COVID-19 pandemic on Albanian unemployment will take time to unfold. Around 40 percent of the population is self-employed in the agriculture sector. Informality continues to be widespread in the Albanian labor market. According to the International Labor Organization (ILO), almost 30 percent of all employment in the non-agriculture sector is informal.
The institutions that oversee the labor market include the Ministry of Finance, Economy and Labor, the Ministry of Health and Social Protection; the National Employment Service; the State Labor Inspectorate; and private entities such as employment agencies and vocational training centers. Albania has adopted a wide variety of regulations to monitor labor abuses, but enforcement is weak due to persistent informality in the work force.
Outward labor migration remains an ongoing problem affecting the Albanian labor market. There is a growing concern about labor shortage for both the skilled and unskilled workforces. Over the last several years, media outlets have reported that a significant number of doctors and nurses have emigrated to Europe, mostly to Germany. There are also claims that the textile industry, which hires unskilled labor, is facing difficulties replacing workers s resulting from growing due to emigration of Albanian citizens. In December 2019, the average public administration salary was approximately 63,826 lek (approximately USD 575) per month. The GoA increased the national minimum wage in January 2019 to 26,000 lek per month (approximately USD 225), but it is still the lowest in the region.
While some in the labor force are highly skilled, many work in low-skill industries or have outdated skills. The government provides financial incentives for labor force training for the inward processing industry (in which goods are brough into the country for additional manufacturing, repairing, or restoring), which in Albania includes the footwear and textile sectors. In March 2019, parliament approved a new law on employment promotion, which defined public policies on employment and support programs. Albania has a tradition of a strong secondary educational system, while vocational schools are viewed as less prestigious and attract fewer students. However, the government has more recently focused attention on vocational education. In the 2018-2019 academic year, about 21,300, or 18 percent, of high school pupils were enrolled in vocational schools, compared with 17.1 percent in the previous year.
The Law on Foreigners and various decisions of the Council of Ministers regulate the employment regime in Albania. Employment can also be regulated through special laws in the case of specific projects, or to attract foreign investment. The Law on TEDA-s also provides financial incentives for labor taxes on investments in the zone. In February 2020, parliament approved some amendments to the Law on Foreigners, extending the same employment and self-employment rights Albanian citizens have to the citizens of five Western Balkan countries. The new law extends to these citizens the same benefits that the original law provided to the citizens of EU and the Schengen countries. The recent amendments also allow hiring of foreign citizens in different sectors in the framework of to work in the reconstruction process efforts due to the November 2019 earthquake.
The Labor Code includes rules regarding contract termination procedures that distinguish layoffs from terminations. Employment contracts can be limited or unlimited in duration, but typically cover an unlimited period if not specified in the contract. Employees can collect up to 12 months of salary in the event of an unexpected interruption of the contract. Unemployment compensation makes up around 50 percent of the minimum wage.
Pursuant to the Labor Code and the recently amended “Law on the Status of the Civil Employee,” both individual and collective employment contracts regulate labor relations between employees and management. While there are no official data recording the number of collective bargaining agreements used throughout the economy, they are widely used in the public sector, including by SOEs. Albania has a labor dispute resolution mechanism as specified in the Labor Code, article 170, but the mechanism is considered inefficient. Strikes are rare in Albania, mostly due to the limited power of the trade unions and they have not posed any risk to investments.
Albania has been a member of the International Labor Organization since 1991 and has ratified 54 out of 189 ILO conventions, including the 8eight Fundamental Conventions, the four Governance Conventions and 42 Technical Conventions. The implementation of labor relations and standards continues to be a challenge, according to the ILO. Furthermore, labor dialogue has suffered from the 2017 division of the Ministry of Labor and Social Protection into two different institutions.
See the U.S. Department of State Human Rights Report:
and the U.S. Department of Labor Child Labor Report:
14. Contact for More Information
Economic and Commercial Officer
U.S. Embassy Tirana, Albania
Rruga Elbasanit, Nr. 103
Tirana, Albania +355 4 224 7285