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Overview of Dominican Labor Law
Senor Guzman a reply to my post to you of February 12, 2009, regarding severance pay, etc. would be appreciated.
Adam
Adam
Mr. Spenser, if the home is owned by a corporation it is very probable that the "domestic" won't be considered as such by the courts because of the profit motive implicit in the business of all corporations. In addition, the law (Art. 258 of the Labor Code) has expressly stated that "domestics" working for a condominium are not considered as such but as regular employees, rule which could be interpreted as applying also to corporations.
Based on this and on the principle applicable to labor disputes in the DR that in case of ambiguity in the law, the law has to be interpreted in favor of the employee ("in dubio pro operario"), I would conclude that a corporation cannot have a domestic as defined in the Labor Code.
As for your second question, Article 259 of the Labor Code states that the labor contracts of domestics are governed exclusively byTitle IV of the Labor Code (Articles 258 to 265). Since the maternity provisions are found in articles 231 to 243 of the Labor Code, and severance pay in articles 75 to 102, it is obvious that domestics are not protected by those provisions.
Based on this and on the principle applicable to labor disputes in the DR that in case of ambiguity in the law, the law has to be interpreted in favor of the employee ("in dubio pro operario"), I would conclude that a corporation cannot have a domestic as defined in the Labor Code.
As for your second question, Article 259 of the Labor Code states that the labor contracts of domestics are governed exclusively byTitle IV of the Labor Code (Articles 258 to 265). Since the maternity provisions are found in articles 231 to 243 of the Labor Code, and severance pay in articles 75 to 102, it is obvious that domestics are not protected by those provisions.
Hi everybody and thanks a lot for all informations above...
I'm ruling a shrimp farm here and have a small conflict with my employees here, about last thursday. They say the thursday afternoon, before viernes santo, isn't workable but should be paid. Searching the internet revealed contradictory informations... Could anyone provide a legal source of information on this purpose (preferently in spanish)?
I'm ruling a shrimp farm here and have a small conflict with my employees here, about last thursday. They say the thursday afternoon, before viernes santo, isn't workable but should be paid. Searching the internet revealed contradictory informations... Could anyone provide a legal source of information on this purpose (preferently in spanish)?
How to calculate the hourly wage
Does anyone know how to calculate the hourly wage? If I have to pay overtime, I need to come up with the hourly wage.
Also, is an employee entitled to sick leave if their children are sick? If not, when I deduct the day not work, should I divide the monthly salary by 23.83 like when you pay for severance? It sounds like too much if I deduct a day without pay and divide by 23.5.
Thanks
Does anyone know how to calculate the hourly wage? If I have to pay overtime, I need to come up with the hourly wage.
Also, is an employee entitled to sick leave if their children are sick? If not, when I deduct the day not work, should I divide the monthly salary by 23.83 like when you pay for severance? It sounds like too much if I deduct a day without pay and divide by 23.5.
Thanks
I remember a pregnant girl that worked in an hotel (restaurant staff) and she worked the morning shift and the night shift. I was very frustrated to see her standing for 4-5 hours without a banch to sit... Is there anything in the law to help those girls? We all know the standing position for long hours is not good for pregnant women...
Fabio Guzman, I have a foreign company operating here registred in the DGII and registro mercantil. I am thinking of forming an S.R.L. and making an agent of mine a partner in the new company. Most of assest stays in the old company. Then I am considering hiring another agent in the foreing company where the person does administrative related work. The person then also works as an agent independent contracter in the new company the S.R.L. where the agent gets commision. This way I am hoping that I avoid having to pay regalia etc... for the commisions. Is this possible? I mean many people have a job with a sallery and then make commisions for another business and it does not get mixed in the TSS.
Labor relationships in the Dominican Republic are governed by Law No. 16-92 of May 29, 1992, commonly known as the Labor Code, which is characterized by its strong and sometimes inflexible protection of the rights of the individual employee.
This overview is a brief yet detailed summary of the Labor Code’s most relevant provisions. All references in parentheses refer to articles in the Labor Code unless otherwise specified. Please note that no overview can validly substitute professional legal assistance.
2. Hiring a Workforce
There are several details to pay attention to and obligations to comply with when hiring a workforce.
2.1.The Employment Contract
As a general rule, any and all relationships in which one person obliges him or herself to provide any form of service to another, in exchange for remuneration and under the direction and/or supervision of the latter, are considered to be employment contracts and subject to the provisions of the Labor Code (Arts. 1 and 2).
Such contracts, which may be verbal or written, are presumed to exist in every such case, unless proven otherwise by the employer. Given this presumption, it is quite possible for a person considered a private contractor in other jurisdictions to qualify as an employee in the Dominican Republic.
Any party to an employment contract may require the other to prepare and/or sign a written version of a previously verbal agreement (Art.19). If in writing, any modifications made to it must be in writing as well (Art. 20). Written agreements are recommended since they foster a clear and sound work relationship.
Any work carried out by a foreigner on Dominican soil is subject to the provisions of the Labor Code since Dominican labor laws are territorial in nature (Principle V of the Labor Code).
2.2.Restrictions and Obligations
Certain limitations apply to the terms of the employment contract and the persons being employed. There is also a series of employer-exclusive obligations that arise from hiring a workforce.
2.2.1. Working Hours and Shifts
Normal working hours may not exceed eight hours a day nor 44 hours a week (Art. 147). Employees in executive or managerial positions are considered an exception to this rule and may work up to 10 hours a day (Art. 150).
Daytime work hours range from 7:00 a.m. to 9:00 p.m. (Art. 149). A work shift is considered a daytime shift as long as no more than three hours exceed the 9:00 p.m. limit. Otherwise it is considered a night shift, which entails an increase in remuneration, as detailed below in 3.2. The weekly work shifts normally end on Saturdays at noon, giving the employee 36 hours of uninterrupted rest. Any other arrangement must provide the same minimum uninterrupted rest period of 36 hours.
2.2.2. Employee Nationality
At least 80% of an entity’s work force must be Dominican (Art. 135). Likewise, no less than 80% of the payroll, with the exception of salaries for technical or executive positions, must correspond to wages earned by Dominicans (Art. 136). Distributions of Dominican and foreign workers for work forces of less than 10 people are provided for expressly under the Labor Code (Art. 137). Employees carrying out exclusively executive or managerial duties and those in technical positions for which there is no available Dominican substitute are exceptions to these rules (Art. 138).
2.2.3. Employee Age
A person is considered of legal age for labor purposes at 16. However, an employment contract may be entered into by a minor for nonhazardous work provided that the minor has reached the age of 14 and has obtained the authorization of his or her parents (Art. 17). Work hours for minors may not exceed six hours a day (Art. 247). Employment of minors is prohibited in establishments selling alcoholic beverages (Art. 253).
2.3.Bookkeeping and Filings
Employers are required to keep the following records on a permanent basis: (i) employee, wage and schedule listings; ( ii) vacations listings; (iii) overtime listings and ( iv) inspection visit records (Art. 16). Keeping these records and duly registering with authorities is crucial for employers, given that they are the only valid evidence that may be presented by them against employees in many cases.
3. Wages Wages must be paid in cash and cannot be below the established minimum wage. (Arts. 192 and 193). The interval between salary payments cannot exceed one month (Art. 198). Nonpayment of wages by the employer is considered a criminal offense punishable by a fine and up to five years in prison (Arts 198 and 211).
3.1.Minimum Wage
Minimum wages are established by the National Salary Committee, a dependency of the Ministry of Labor, and vary according to the different type of business and their installations and/or holdings. Current minimum wages are specified in the side table.
3.2.Overtime
Every hour above the 44-hours weekly limit is to be paid at 135% of the normal hourly wage (Art. 203). Every hour in excess of 68 hours a week is to be paid at 200% of the normal hourly wage. Nigh hours are paid at an additional 15% (Art. 204).
This overview is a brief yet detailed summary of the Labor Code’s most relevant provisions. All references in parentheses refer to articles in the Labor Code unless otherwise specified. Please note that no overview can validly substitute professional legal assistance.
2. Hiring a Workforce
There are several details to pay attention to and obligations to comply with when hiring a workforce.
2.1.The Employment Contract
As a general rule, any and all relationships in which one person obliges him or herself to provide any form of service to another, in exchange for remuneration and under the direction and/or supervision of the latter, are considered to be employment contracts and subject to the provisions of the Labor Code (Arts. 1 and 2).
Such contracts, which may be verbal or written, are presumed to exist in every such case, unless proven otherwise by the employer. Given this presumption, it is quite possible for a person considered a private contractor in other jurisdictions to qualify as an employee in the Dominican Republic.
Any party to an employment contract may require the other to prepare and/or sign a written version of a previously verbal agreement (Art.19). If in writing, any modifications made to it must be in writing as well (Art. 20). Written agreements are recommended since they foster a clear and sound work relationship.
Any work carried out by a foreigner on Dominican soil is subject to the provisions of the Labor Code since Dominican labor laws are territorial in nature (Principle V of the Labor Code).
2.2.Restrictions and Obligations
Certain limitations apply to the terms of the employment contract and the persons being employed. There is also a series of employer-exclusive obligations that arise from hiring a workforce.
2.2.1. Working Hours and Shifts
Normal working hours may not exceed eight hours a day nor 44 hours a week (Art. 147). Employees in executive or managerial positions are considered an exception to this rule and may work up to 10 hours a day (Art. 150).
Daytime work hours range from 7:00 a.m. to 9:00 p.m. (Art. 149). A work shift is considered a daytime shift as long as no more than three hours exceed the 9:00 p.m. limit. Otherwise it is considered a night shift, which entails an increase in remuneration, as detailed below in 3.2. The weekly work shifts normally end on Saturdays at noon, giving the employee 36 hours of uninterrupted rest. Any other arrangement must provide the same minimum uninterrupted rest period of 36 hours.
2.2.2. Employee Nationality
At least 80% of an entity’s work force must be Dominican (Art. 135). Likewise, no less than 80% of the payroll, with the exception of salaries for technical or executive positions, must correspond to wages earned by Dominicans (Art. 136). Distributions of Dominican and foreign workers for work forces of less than 10 people are provided for expressly under the Labor Code (Art. 137). Employees carrying out exclusively executive or managerial duties and those in technical positions for which there is no available Dominican substitute are exceptions to these rules (Art. 138).
2.2.3. Employee Age
A person is considered of legal age for labor purposes at 16. However, an employment contract may be entered into by a minor for nonhazardous work provided that the minor has reached the age of 14 and has obtained the authorization of his or her parents (Art. 17). Work hours for minors may not exceed six hours a day (Art. 247). Employment of minors is prohibited in establishments selling alcoholic beverages (Art. 253).
2.3.Bookkeeping and Filings
Employers are required to keep the following records on a permanent basis: (i) employee, wage and schedule listings; ( ii) vacations listings; (iii) overtime listings and ( iv) inspection visit records (Art. 16). Keeping these records and duly registering with authorities is crucial for employers, given that they are the only valid evidence that may be presented by them against employees in many cases.
3. Wages Wages must be paid in cash and cannot be below the established minimum wage. (Arts. 192 and 193). The interval between salary payments cannot exceed one month (Art. 198). Nonpayment of wages by the employer is considered a criminal offense punishable by a fine and up to five years in prison (Arts 198 and 211).
3.1.Minimum Wage
Minimum wages are established by the National Salary Committee, a dependency of the Ministry of Labor, and vary according to the different type of business and their installations and/or holdings. Current minimum wages are specified in the side table.
3.2.Overtime
Every hour above the 44-hours weekly limit is to be paid at 135% of the normal hourly wage (Art. 203). Every hour in excess of 68 hours a week is to be paid at 200% of the normal hourly wage. Nigh hours are paid at an additional 15% (Art. 204).
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Employment or Work without a Cedula:
You can work as a contractor without a Cedula (depending on the comfort level of the company). When you invoice them, you add the 16% ITBIS. They withhold the 16% and also tax you another 10% (or more? I believe for being "outside the system"). You also can register with the DGII for a personal RNC nubmer (attached to your passport, NOT a company). Then you can buy a packet of "Comprobantes Fiscal" for 500 pesos which serve as the invoice to your customer.
This allows the company and DGII a mechanism for tracking and collecting taxes on revenues to/from foreigners without a corporate structure backing them.
Catch: That's nice and all, but, again, will depend on how badly the company wants or needs your services.
Foreigner applying for Cedula:
I believe most folks that "qualify" can apply for residency. This is valid for a time period X. If this is granted and, again, only if you qualify, you can apply for a Cedula.
Dr. Guzman needs to clarify, but, for example, a foreigner married to a Dominican national who furthermore is able to substantiate the legitamacy of his existance in DR, can qualify for a Cedula.
I'm sure there are other ways to legally obtain work and/or residential documentation/permission here in DR, but I will leave that to the experts like Dr. Guzman.
You can work as a contractor without a Cedula (depending on the comfort level of the company). When you invoice them, you add the 16% ITBIS. They withhold the 16% and also tax you another 10% (or more? I believe for being "outside the system"). You also can register with the DGII for a personal RNC nubmer (attached to your passport, NOT a company). Then you can buy a packet of "Comprobantes Fiscal" for 500 pesos which serve as the invoice to your customer.
This allows the company and DGII a mechanism for tracking and collecting taxes on revenues to/from foreigners without a corporate structure backing them.
Catch: That's nice and all, but, again, will depend on how badly the company wants or needs your services.
Foreigner applying for Cedula:
I believe most folks that "qualify" can apply for residency. This is valid for a time period X. If this is granted and, again, only if you qualify, you can apply for a Cedula.
Dr. Guzman needs to clarify, but, for example, a foreigner married to a Dominican national who furthermore is able to substantiate the legitamacy of his existance in DR, can qualify for a Cedula.
I'm sure there are other ways to legally obtain work and/or residential documentation/permission here in DR, but I will leave that to the experts like Dr. Guzman.
What is the pay supposed to be for free zone monthly employees if they work on Saturday (which is not included in our normal work schedule) ? Let's say an employss earns 10,000/month / 23.83 = 419.68 / 8 =52.46. So if they work on Saturday should they be paid 104.92 per hour or 70.83 per hour?
Dear Dr Guzman,
I have looked at the labor law page on this site and I am not sure some of the tables are up to date. Especially the Minimum Wage table.
An Overview of Dominican Labor Law
Can you confirm they are current ?
OLLY and the team
I have looked at the labor law page on this site and I am not sure some of the tables are up to date. Especially the Minimum Wage table.
An Overview of Dominican Labor Law
Can you confirm they are current ?
OLLY and the team
I have a foreign registered LLC business (for-profit) and a church/missions (non-profit) registered in another country. I want to export Dominican produce, food and manufactured goods. Once fairly fluent in Spanish as a young child, my Spanish is not adequate for me to negotiate directly with farmers, farmers associations and manufacturers. Therefore, until I become a fluent Spanish speaker, I would like to purchase products from an independent broker who works at his/her own location at his/her own time and schedule. He/she would give me a price for each product I request; and, if I accept the price, my company will purchase the product(s) from the farmer, farmer association or manufacturer. This broker may or may not have a registered business. Would such a person be considered an employee?
Also, can a foreign registered LLC operate a business from the Dominican Republic without incorporating in the Dominican Republic? If so, what rules or procedures apply for the payment of local taxes? If rules and procedures apply, do they represent a lower cost of entering the market?
I also, want to operate the church / missions here in the Dominican Republic. What rules, regulations or laws govern to operation of a church / mission and English private school in the Dominican Republic?
I wish I had had this information months ago! I fired a lazy gardener that wouldn't show up and he tried to get holiday pay, sick pay, medical and severance out of me!
If you don't control the markup on the products you purchase, you shouldn't have a problem.
As to your other questions, please post them below.
As to your other questions, please post them below.