How To Hire And Pay Employees In Dominican Republic

Emerald Technology's guide to hiring employees in Dominican Republic.

CURRENCY

Dominican Peso is the official currency of the Dominican Republic. Its currency symbol is RD$, DOP.

CAPITAL CITY

Santo Domingo, is the capital, it is the largest city in the West Indies

LANGUAGE

Spanish is the official language, with 85% of the population speaking Dominican Spanish.

POPULATION The current population of Dominican Republic is 10.95 Million 2021 based on World bank numbers.
PAYROLL FREQUENCY

Salaries paid on a monthly basis. Employees are also entitled to a Christmas Bonus which is equal to 1/12 of their regular salary, this is also exempt from income tax.

PUBLIC HOLIDAYS Dominican Republic has 12 public holidays.

GROW YOUR TEAM IN DOMINICAN REPUBLIC

NO ENTITY, NO PROBLEM

To start growing your team in Dominican Republic, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months. 

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

PROS AND CONS OF HIRING IN DOMINICAN REPUBLIC

Latin America has become an exceptional market for business. With a fast-growing economy makes it an attractive business environment for organisations, due to its lower cost of production and a significantly low labour cost compared to others worldwide. Many companies outsource their IT work to the country to gain competitive cost savings on its workforce. The Dominican Republic is amongst the top 10 best economies in Latin America, as well as being the largest economy in the Caribbean.

The main reason for the Dominican Republic’s economic growth is because of the IT and Technology sector. The government is invested in growing this further, for example, initiatives like, Republica Digital. The Dominican Republic is also home to some of the biggest telecom companies that have invested in the country’s IT infrastructure.

The Dominican Republic benefits from high English proficiency due to the language being introduced into early year’s curriculum.

However, the Dominican Republic is not the most attractive country for workers if they are looking to make lots of money. The low labour costs are significant, and it can be difficult to earn lots of money here- especially as an expat.

WHY DOMININCAN REPUBLIC IS GOOD FOR REMOTE WORKERS

Remote working has never been easier and the Dominican Republic quickly became a popular location for remote workers.

The Dominican Republic is noted on the World Happiness Index higher than any other Caribbean nation. The quality of life provided is highly sought after, especially from expats.

As a foreign national, a visa is not always required to enter the country. Countries like US, Canada and other European countries only need a tourist card to enter for 30 days.

Remote workers can benefit from low cost of living, large expat communities, popular time zone and free healthcare treatment from public hospitals, or even private healthcare is cheaper than other countries.

START GROWING YOUR REMOTE WORKFORCE NOW

WORKING TIME AND OVERTIME IN DOMINICAN REPUBLIC

Standard working hours in Dominican Republic should not exceed 44 hours per week. Part time employees should not work over 29 hours per week. Overtime hours are paid at 135% of the standard salary. Hours in excess of 68 per week are paid at 200% of the standard salary. Overtime pay may not apply to company directors, managers, and employees in trust positions. An employee that works for more than 6 consecutive hours is entitled to a break of one hour. Full-time employees are entitled to a minimum uninterrupted rest period of 36 hours per week.

ANNUAL LEAVE AND PUBLIC HOLIDAYS

Full-time employees who have been employed for at least one year are entitled to 14 days annual leave. After working at a company for 5 years this increases to 18 days. Annual leave should not be split into periods of less than one week and can’t be replaced by another form on compensation.

There are 12 public holidays. In addition to annual leave, employees are entitled to 5 days off for marriage and 3 days for the death of an immediate family member.

 

January 1st: New Year's Day 
January 10th: Three Kings Day 
January 21st: Our Lady of Altagracia
January 24th: Juan Pablo Duarte
February 27th: National Independence Day 
April 15th: Good Friday 
May 2nd: Labor Day 
June 16th: Corpus Christi
August 16th: Restoration Day
September 24th: Our Lady of Mercedes Day 
November 6th: Constitution Day
December 25th: Christmas Day 

PROBATION PERIOD IN DOMINICAN REPUBLIC

Probation periods are not statutory in Dominican Republic. However, one should not last longer than 3 months.

RESIGNATION AND DISMISSAL IN DOMINICAN REPUBLIC

The employee may unilaterally terminate the employment contract by providing notice in writing. Notice periods depend on length of service. If an employee has been working for less than 3 months no notice is required, service of 3 to 6 months 7 days notice will be required, service of 6 to 12 months 14 days notice will be required, and over 12 months 28 days will be required. The same notice periods will apply to employers terminating employment without just cause. Additionally, if an employer terminates without just cause they must pay the employee severance pay as per the below.

Time Employed Severance
3-6 months 6 days salary
6-12 months 13 days salary
1-5 years 21 days for each year employed
5+ years 23 days for each year employed

 

Employees will also be entitled to severance pay if it is found that they have just cause for resigning from their position. 

Employers may terminate employment with just cause alleging one or more of the specific causes listed within the labour code, article 88. Employers will need to provide evidence of the grounds for the termination. Employers will also need to provide written notice to the Department of Labour within 48 hours of dismissing the employee. Failure to prove the cause or provide notice within 48 hours will mean the employer is liable to pay severance to the employee.

If an employee is resigning with cause they must also provide evidence. Employers are not able to terminate the employment of a pregnant employee and for up to 3 months following  the birth. If termination takes place without providing a just cause, the employee will be entitled to 5 months' in addition to severance pay.

RESTRICTIVE COVENANTS

There are not specific laws on restrictive covenants after termination of employment, which means an employee can challenge any restrictive covenants after the termination of employment. The following are recognised and maybe enforceable under law; non-solicitation of employees, non-solicitation of clients/customers, and non-compete clauses. Restrictive agreements such as the three previously mentioned after termination of employment must meet specific requirements to be applicable. In particular, they will need to be reasonable and must be signed after the employment contract has ended.

READY TO HIRE YOUR EMPLOYEES IN DOMINICAN REPUBLIC?

CONTRACT OF EMPLOYMENT IN DOMINICAN REPUBLIC

The Dominican Republic labour law does not require a written contract of employment for permanent employees. However, it is best practice for a written contract to be provided. Any written contract must be provided in Spanish. Fixed term or temporary contracts must be provided in writing and include the length of the contract.

MATERNITY LEAVE IN DOMINICAN REPUBLIC

Expectant mothers are entitled to 12 weeks maternity leave, this is usually taken 6 weeks before the expected due date and 6 weeks after. The cost is split between the employer and social security. Fathers are entitled to 2 days paternity leave to be taken after the birth.

SICKNESS LEAVE IN DOMINICAN REPUBLIC

There is no statutory law on sick leave in the Dominican Republic. It is at the employer's discretion whether they choose to pay sick leave to employees.

SOCIAL SECURITY

Social Security in the Dominican Republic is a pay as you go system that covers employees within the private sector. Both the employer and employee contribute, this includes to the state pension fund (AFP) and public health insurance fund (SFS).

HEALTHCARE AND INSURANCE

The quality of healthcare in the Dominican Republic varies in different parts of the country and between private and public hospitals. There are three tiers to healthcare in the Dominican Republic as below:

  • Subsidised - This is for the unemployed, poor and disabled residents that are eligible for funding from the state.
  • Contributively - Healthcare that is financed by the employer and employee contribution. 

Many foreign employees and companies choose international private healthcare policies, so they are able to access the best quality healthcare.

Employment of

FOREIGN NATIONALS IN DOMINICAN REPUBLIC

Most foreign nationals will need a visa to work in the Dominican Republic. Below are the two most common visas. Generally, the visa will need to be applied for in the consulate or embassy in the applicant’s home country once they have a signed contract with a local company. All supporting documents must be translated into Spanish. At least 80% of a company’s workforce must be Dominican.

Business Visa

This visa is known locally as Visa de Negocios. It is valid for 60 days with a single entry, or one year with multiple entries. The multiple entry visa will not allow holders to remain in the Dominican Republic for longer than 2 months at a time. 

Business Visa for Employment Purposes (NM1)

This visa is known locally as Visa de Negocios con Fines Laborales. This visa is for foreign nationals who will be employed by either public or private companies based in the Dominican Republic. The visa is valid for one year and can be renewed if the applicant will still hold a valid contract of employment. Employees that will be working for a company in the Dominican Republic on a long-term basis will also need to apply for a residence permit.

Requirements for a work visa will include but are not limited to a valid passport, visa application, medical certificate and police check from the applicant's home country, job offer letter from a Dominican company letter to the consular section from the employing company in the Dominican Republic

Salary Taxes

MINIMUM WAGE IN DOMINICAN REPUBLIC

The national minimum wage in the Dominican Republic is 8,310 Dominican Peso (DOP) per month in Free Trade Zones. Outside of Free Trad Zones, it is between 7,843012,873 DOP per month depending on the size of the company. For public sectors it is 5,884 DOP per month.

INCOME TAX

The Dominican tax year runs from January to December. It is the employer's responsibility to ensure taxes are paid from salaries before payments are made to employees. The general personal income tax rates are listed below as a guidance and is based on annual income.

Up to 416,220.00 DOP 0%
416,220.00 - 624,329.00 DOP 15%
624,329.00 - 867,123.00 DOP 20%
867,123.00 DOP 25%

 

SALARY PAYMENTS IN DOMINICAN REPUBLIC

Salaries in the Dominican Republic are generally paid on a monthly basis. Employees are also entitled to a Christmas Bonus which is equal to 1/12 of their regular salary, this is also exempt from income tax.

SOCIAL SECURITY CONTRIBUTIONS IN DOMINICO REPUBLIC

Social security contributions in Dominican Republic are the responsibility of the employer to deduct from an employee’s salary before payment. Both the employer and employee are subject to social security contributions. Below are approximate contribution rates for employers and employees, please note that these can vary.

  Employer Employee
Social Security 25% - 33.58% 1.65%
Retirement 2% - 5.15% 1.125%
National Housing Fund  5% N/A

 

WORKER MISCLASSIFICATION IN DOMINICAN REPUBLIC

Similar to other countries, Dominican Republic has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.

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