HomeSmall BusinessEmployment Law in the Dominican Republic: A Guide

Employment Law in the Dominican Republic: A Guide

Dominican Republic map

For anyone interested Establishment of a company in the Dominican RepublicFor those who already do business in this Caribbean country, understanding the employment law is crucial to maintaining the company’s good reputation and maximizing the potential for success.

The employment law of the Dominican Republic is governed by Ministry of WorksAlthough many aspects of the legislation are similar to those in other markets, the Dominican system also has its own particularities.

For anyone with limited market demand, such as a small number of local executives or teams for short-term projects, through recruitment Employer of Record (EOR) in the Dominican Republic Probably the best choice.

Because when you hire through EOR, the service provider acts as a formal employer and you retain full control of their schedule and responsibilities, which means you can avoid the need to establish a local entity.

The following provides an overview of the employment law of the Dominican Republic, including information on normal working hours, the most commonly used contract types for foreign investors, detailed information on termination and severance, information on holiday allowances, and wage-related tax guidelines. Employers must supervise .

If you want to know more about how we can support you in entering the Dominican Republic market and doing business, Contact us now.

Employment law in the Dominican Republic: working hours

According to the Employment Law of the Dominican Republic, the standard working week is 44 hours and the normal shift time is 8 hours. Any employee who works continuously for more than 6 hours must mandate a one-hour meal time, and all full-time employees have the right to work continuously for at least 36 hours a week.

Certain positions, such as management and supervisory roles, are not subject to these regulations.

Please note that there are usually 9 to 11 national holidays on working days in each calendar year.

Ordinary contracts under the Employment Law of the Dominican Republic

The employment law of the Dominican Republic allows foreign investors to use three types of contracts most commonly:

Stock image of someone signing a document to sign one of the three main contracts stipulated by the Employment Law of the Dominican Republic on behalf of someone
There are three main types of contracts in the Dominican Republic
  1. Indefinite employment contract It is the most common type of contract and only terminates in a mutual agreement between the employer and the employee or when one party has the right to act unilaterally.

    Examples include employees resigning from their positions, or employee misconduct leading to contractual dismissal.

  2. Fixed-term labor contract The duration is the period stipulated in the contract, and can only be sued if the nature of the service is guaranteed or in the best interests of the employee.Examples include when workers are required to pay for maternity leave or other long leave
  3. Contracts for specific tasks or projects It is in order to complete a specific result-based responsibility, and the flags and thresholds must be stated to clearly determine when the task or project is completed and when the contract is completed.

Termination and severance

Employees are obliged to provide notice of resignation based on the length of time they have worked in the company. In the event that the contract is terminated without a valid reason, the employer must provide a similar notice period. The deadline is as follows:

  • Zero notice for employees who have been in the company for less than three months
  • The employee shall be notified 7 days in advance after working in the company for three to six months
  • After the employee has worked in the company for 6 to 12 months, 14 days’ notice will be given
  • If the employee has served in the company for more than 12 months, 28 days’ notice will be given

After the contract is terminated, for whatever reason, the employer is obliged to pay the employees the following expenses:

  • The percentage of the year-end bonus is based on how many calendar years they have worked
  • Full compensation for accumulated unused leave allowance
  • Pay the profit share based on the proportion of the employee’s working financial year

The most important thing is that when employees are dismissed without good reason, they will be entitled to financial assistance based on their years of service in the company. The regulations are as follows:

  • Service is less than three months without any assistance
  • For three to six months of service, six days’ pay must be provided
  • For 6 to 12 months of service, 13 days’ pay must be provided
  • For 1 to 5 years of service, 21 days of service per year must be provided
  • For more than five years of service, a salary of 23 days of service per year must be provided

Holidays, vacations and other absences under Dominican law

After one year of continuous full-time work, employees are entitled to 14 days of paid time off (PTO) per year, which can be extended to 18 days after five years of service.

Stock image of a pregnant woman, representing a woman on maternity leave in the Dominican Republic
Maternity leave in the Dominican Republic lasts for 12 weeks

According to the Employment Law of the Dominican Republic, the holiday must last at least one full working week, and the allowance cannot be exchanged for additional remuneration.

Maternity leave and paternity leave
Starting 6 weeks before the due date, new mothers can enjoy a total of 12 weeks of paid maternity leave. The Dominican Employment Law also stipulates that the new father can enjoy two days of paid paternity leave after birth.

sick leave
According to the Employment Law of the Dominican Republic, employees are not entitled to paid sick leave. Therefore, the employer can decide to pay for the time missed due to illness.

Bereavement leave
If parents, children, partners or other dependents lose their lives, they can enjoy a total of three days of bereavement leave.

Employment Law in the Dominican Republic: Contribution

Employee deduction:
According to the employment law of the Dominican Republic, the national pension fund (AFP) and the public health insurance fund (SFS) are deducted from the employee’s salary, which amounts to 5.92% of the salary.

These are broken down into a 2.87% deduction for AFP and a 3.04% deduction for SFS.

Employer contributions
The employer’s total contributions to AFP and SFS and occupational health insurance are at least 15.34% of the value of wages paid

These are subdivided into a 7.1% contribution to AFP, a 7.09% contribution to SFS, and a 1.25% contribution to occupational health. Depending on the level of risk involved in the job, an additional 0.6% can be added.

Profit sharing
Employers are legally obliged to share 10% of annual net profits with employees and must pay within 90 to 120 days after the end of the fiscal year, which in the Dominican Republic ends on December 31. This means that the profit share is usually paid in April.

Employees who have served the company for less than five years shall have a profit share not exceeding 45 days’ wages, while employees who have provided more than five years of service to the company shall not exceed 60 days’ wages.

Please note that the following types of companies are exempt from sharing profits:

  • Agriculture, forestry and mining companies that have been in business for less than three years
  • Agricultural companies with capital not exceeding 1 million Dominican pesos (approximately USD 18,000 as of November 2021)
  • Company is located Free trade zone

Biz Latin Hub can help you start your business in the Dominican Republic

In Biz Latin Hub, our bilingual professional support expert team can help you master and correctly comply with the employment laws of the Dominican Republic.

Our comprehensive portfolio of enterprise solutions includes Founded, Accounting and taxation, Corporate legal services, Visa processing, and Recruitment and PEO, And we provide tailor-made integrated back-end service packages to meet various needs.

We have teams in 16 markets in Latin America and the Caribbean and have trusted partners to extend our coverage to almost every corner of the region. We focus on market entry across jurisdictions.

Contact us today Learn more about how we can help you enter and do business in the Dominican Republic.

Or learn more about us Team and expert authors.

Biz Latin Hub's overview of employment laws in the Dominican Republic
Overview of Employment Laws in the Dominican Republic

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