Definitive Guide to Hiring in Barbados

Hiring in Barbados

Hiring employees compliantly in Barbados means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Barbados so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Barbados or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Barbados

Employee Probation Period

• No statutory regulation

Annual Leave in Barbados

• An employee who completes a year of employment with an employer is entitled to
  • an annual holiday of not less than 3 weeks where he has been in the employment of that employer for less than 5 years; and
  • an annual holiday of not less than 4 weeks where he has been in the service of that employer for 5 years or more.

Holidays in Barbados

Workers are entitled to paid holidays during Festival (public and religious) holidays. These include memorial holidays and religious holidays (Christian origin).

Here is the full list of public holidays in Barbados:

Maternity Leave Barbados

• Except where an employee otherwise desires, maternity leave shall be of a period of not less than twelve weeks and shall be so arranged that the employee is allowed
  • such period, not exceeding six weeks, as she desires before the expected date of confinement; and
  • a period of not less than six weeks from the date of confinement.

Paternity Leave Barbados

• There is no paternity leave

Working Hours in Barbados

• Working hours for office personnel vary between 35 to 40 hours, while a 40-hour week is the norm for manual workers.

Overtime in Barbados

• Work in excess of 40 hours is paid at a premium overtime rate
• The rate for overtime is one and-a-half times the normal rate and double pay for public holidays.

Termination of Employment in Barbados

• Employees with 1 year´s continuous service have the right to receive, upon request a written statement of the reasons of their dismissals (Section 22 and 23(2) of the Employment Rights Act –hereinafter ERA).
• Length of notice varies depending on years of service and frequency wages are paid. 
• They apply to employees with at least 1 year of continuous service (ERA Section 22): 
  • Hourly, daily or weekly paid 
    • 1 week notice period for employment period of more than 2 years
    • 2 weeks’ notice period for employment period exceeding 2 years but less than 5 years
    • 4 weeks’ notice period for employment period exceeding 5 years but less than 10 years
    • 6 weeks’ notice period for employment period exceeding 10 years but less than 15 years
    • 10 weeks’ notice period for employment period exceeding 15 years

• • Fortnightly paid
    • 2 weeks’ notice period for employment period up to 5 years
    • 4 weeks’ notice period for employment period exceeding 5 years but less than 10 years
    • 6 weeks’ notice period for employment period exceeding 10 years but less than 15 years
    • 10 weeks’ notice period for employment period exceeding 15 years

• • Monthly paid
    • 1-month notice period for employment period of 10 years
    • 1.5 months’ notice period for employment period exceeding 10 years but less than 15 years
    • 2.5 months’ notice period for employment period exceeding 15 years

• Severance pay is legally required for employees with 2 years’ tenure dismissed for: redundancy, lay off/ kept on short-time and natural disaster
• The amount of severance payment is: 
  • 2.5 weeks’ basic pay for each such year up to 10 years 
  • 3 weeks’ basic pay for each such year by which the employment exceeds 10 years but does not exceed 20 years, and 
  • 3.5 weeks’ basic pay for each such year by which the employment exceeds 20 years but does not exceed 33 years.

Notice Period in Barbados

• Length of notice varies depending on years of service and frequency wages are paid.
• They apply to employees with at least 1 year of continuous service (ERA Section 22):
  • Hourly, daily or weekly paid
    • 1 week notice period for employment period of more than 2 years
    • 2 weeks’ notice period for employment period exceeding 2 years but less than 5 years
    • 4 weeks’ notice period for employment period exceeding 5 years but less than 10 years
    • 6 weeks’ notice period for employment period exceeding 10 years but less than 15 years
    • 0 weeks’ notice period for employment period exceeding 15 years
  • Fortnightly paid
    • 2 weeks’ notice period for employment period up to 5 years
    • 4 weeks’ notice period for employment period exceeding 5 years but less than 10 years
    • 6 weeks’ notice period for employment period exceeding 10 years but less than 15 years
    • 10 weeks’ notice period for employment period exceeding 15 years
  • Monthly paid
    • 1-month notice period for employment period of 10 years
    • 1.5 months’ notice period for employment period exceeding 10 years but less than 15 years
    • 2.5 months’ notice period for employment period exceeding 15 years

Severance in Barbados

• Severance pay is legally required for employees with 2 years’ tenure dismissed for: redundancy, lay off/ kept on short-time and natural disaster
• The amount of severance payment is:
  • 2.5 weeks’ basic pay for each such year up to 10 years
  • 3 weeks’ basic pay for each such year by which the employment exceeds 10 years but does not exceed 20 years, and
  • 3.5 weeks’ basic pay for each such year by which the employment exceeds 20 years but does not exceed 33 years.

Barbados Salary and Wages

13th / 14th Month Pay

• No
• There is no statutory requirement to pay the 13th or 14th month.
• There is no evidence that it is customary.
• Instead employers are only required and often do pay only the holiday entitlement.

• Every individual between the ages of 16 and 65, who is gainfully employed in Barbados under a contract of service, must be insured under the National Insurance and Social Security Act.
• Contributions are determined as a percentage of insurable earnings up to a maximum of insurable earnings of BBD 5,120 per month or BBD 1,182per week.
• Employers must remit National Insurance contributions by the 15th day of the following month.
• Effective from 1 October 2018, the employee’s share is 11.1%, with the employer paying 12.75%.
• Self-employed individuals make quarterly contributions of 17.1% on earnings of up to a maximum of BBD 4,880 per month.
  
  

Immigration Barbados

• In general, visitors from certain countries are required to have visas to enter Barbados.
• In certain cases, individuals from these countries are required to have visas only if they are going to be in Barbados longer than 28 days.
• Foreign nationals and foreign companies are allowed to establish companies in Barbados.
• Foreign nationals employed by these companies in Barbados must obtain work permits.
• Nationals of member countries of CARICOM who are university graduates are not required to have work permits to live and work in Barbados.
• However, such nationals must obtain a certificate of recognition as a CARICOM Skilled National instead of a work permit contingent rights, including the right to leave the country without permission and the right to seek employment without first obtaining a work permit.
• All other foreign nationals who wish to work in Barbados must apply for work permits.
• Work permits allow individuals to reside and work in Barbados and normally are issued for a period of three years unless otherwise specified.
• No quota system exists for issuing work permits; each application is evaluated on its own merit. To approve a work permit application, the government must be satisfied that no suitable Barbadians can fill the vacancy.
• Work permits are non-transferable.
• If a work permit holder leaves the employer, the work permit is canceled.
• The employer should inform the Immigration and Passport Department that the employee has left the company.
• Applicants may not work while their work permit applications are being processed.
• Work permit holders should renew their work permits three to four months before expiration.
• Work permit holders who have lived in Barbados for six years or more may apply for nonimmigrant visas, which eliminate the necessity of applying for work permits.
• If necessary, an application should be made for a long-term work permit to cover the processing period of the non-immigrant visa.
• Non-immigrant visas are issued to individuals who wish to retire or reside on the island.
• Applicants must be of sound body and mind and must be capable of supporting themselves.
• Each application is processed on its own merit.
• The process is lengthy and can take more than one year.
• To approve a residence application, the government must be satisfied that the applicant can support himself or herself and will not be a burden to the country.
• The individual’s qualifications and entitlement are also taken into consideration.
• No quota system exists for issuing residence permits; each application is evaluated on its own merit.

Value Added Tax (VAT) in Barbados

• VAT is levied at the rate of 17.5% on the value of a wide range of goods and services imported or supplied in Barbados by VAT-registered persons.
• A rate of 10% applies to hotel accommodation and tourism services.
• A zero rate applies to exports, basic foodstuffs, and international freight services.
• A rate of 22% applies to mobile phone services. Exemptions include some financial services, sales of real property, and holders of an FCP.

Mandatory Benefits in Barbados

• These are mandatory benefits as postulated by law
• These include annual leave, public holidays, maternity leave, overtime pay, notice period, and severance pay
• Mandatory benefits also include social security benefits.

Payments And Invoicing

• The tax year for individuals is the calendar year.
• All individuals who carry on business (whether or not assessable income has been derived during the income year) or earn assessable income in excess of BBD 25,000 (BBD 40,000 in the case of pensioners over age 60) are required to file a separate income tax return.
• The return is due by the following 30 April.
• Income tax returns can be filed online.
• Income tax is normally withheld from salaries under the PAYE system, and interest is payable to the taxpayer on overdue tax refunds. 
• Individuals earning more than 25% of their total assessable income from business or rent must pay three instalments, each representing 25% of the previous year’s income tax liability, on 15 June, 15 September, and 15 December. 
• Other individuals must pay 50% of the income tax due on filing the income tax return on 30 April and the remainder on 30 September.

Payroll Accrual in Barbados

Country Accruals Additional Information

Description

The rates of the national insurance contributions for employees are 11.10 percent and for employer’s 12.75 percent, up to the maximum insurable earnings of BBD4,820 per month from income in the year 2019.

Payroll Accruals Additional Information

Accrued Benefits in Barbados

Why use Global Expansion to hire in Barbados

Establishing a branch office or subsidiary in Barbados can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Barbados labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Barbados law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Barbados. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Barbados Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.