Retirement Compensation Stalled by Employer Non-Cooperation

Asmar to "Akhbar al-Yawm": Everything in Lebanon is dollarized, except employee salaries

English version based on the Arabic-language article published by Akhbar al-Yawm

Lebanon’s prolonged economic meltdown has decimated the value of end-of-service benefits, leaving thousands of retirees with little to show for decades of work. Those who left their jobs between 2019 and 2023 have been hit hardest, receiving payouts that have lost nearly all purchasing power due to the collapse of the Lebanese pound.

A draft law introduced by MP Faisal Karami seeks to address this disparity by recalculating past indemnities based on today’s real value. The proposal, currently under review by parliamentary committees, targets both public and private sector workers who were compensated in devalued currency at the height of the crisis.

Speaking to the "Akhbar al-Yawm" agency, Bechara al-Asmar, President of the General Confederation of Lebanese Workers (GCLW), said the issue affects two distinct groups of workers:

The first group includes those now eligible for retirement compensation, often declared based on their actual salaries. While some receive relatively acceptable amounts, the figures vary widely depending on employer compliance. Asmar cited major telecom operators Alfa and Touch as examples of companies that have delayed settlement payments, preventing staff from accessing their benefits.

"The National Social Security Fund (NSSF) is legally obliged to disburse end-of-service payments regardless of whether employers pay their dues", Asmar said. "But due to the Fund’s deteriorated financial position, settlement by employers has become essential".

The second group comprises workers who left their jobs between 2019 and 2023, during Lebanon’s steepest financial downturn. Many received lump sums equivalent to only a few thousand U.S. dollars, Asmar said.

In response, the GCLW collaborated with Karami to draft legislation aimed at compensating these workers more fairly. The proposal, already discussed in the parliamentary Health Committee, has now been referred to the Administration and Justice Committee as well as the Finance and Budget Committee.

If passed, the law would require employers to cover 50% of the adjusted compensation, while the state would pay the other half. All indemnities disbursed during the crisis period would be multiplied by a factor of 30 to reflect true losses.

Addressing the mismatch between wages and rising living costs, Asmar pointed to a fundamental inconsistency: "Everything is priced in U.S. dollars, yet salaries and compensations are still paid in Lebanese pounds". He noted that workers pay taxes and utility fees at market dollar rates, currently around 89,500 LBP per USD, but still receive compensation in the devalued local currency.

Despite the collapse, Asmar said layoffs remained limited, largely because Lebanon’s private sector has managed to adapt. "Most industries, especially in Beirut and Mount Lebanon, remain operational", he said. "Yes, businesses have seen a drop in revenues, but the loss in employees’ purchasing power has been much more severe".

He warned, however, that employer resistance continues to stall meaningful recovery. "What’s needed now is cooperation", he said. "But unfortunately, most business owners are unwilling to engage".