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Hiring in Cayman islands
Cayman Islands is a self-governing British Overseas Territory that is located in the Caribbean Sea. George Town is the capital and the largest city of the Cayman Islands. Financial services, especially offshore financial services, and tourism are the main sectors of the economy and the primary drivers of economic growth. Its main trading partners are Aruba, the United States, United Arab Emirates, Bahamas and Australia. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Cayman Island’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor Code stipulates that employees are entitled to 2 to 4 weeks of paid annual leave based on their years of service. There are no income taxes in the Cayman Islands. Global PEO’s facilitate companies by ensuing compliance with the Labor Code.
statutory labor requirements
Probation Period
- It is not more than 6 months initially, which can be extended to a further 6 months provided that such agreement is in writing and signed by both the employee and employer.
- Unless otherwise stated in a contract, probationary period is 3 months.
Annual Leave
- According to the 2011 Labor Law, each employee is entitled to a minimum of two weeks' vacation (10 working days) for the first four years of employment, three weeks (or 15 working days) for years four to 10, and four weeks (20 days) if employed for over 10 years for the same company.
Public Holidays
- New Year's Day (1st January)
- National Heroes' Day (in the Cayman Islands) (27th January)
- Ash Wednesday (26th February)
- Good Friday (10th April)
- Easter Monday (13th April)
- Discovery Day (18th May)
- Queen's Birthday (15th June)
- Constitution Day (6th July)
- Armistice Day (9th November)
- Christmas Day (25th December)
- Boxing Day (26th December)
Maternity Leave
- The Cayman Islands’ Labor Law (2011 Revision) provides for a minimum maternity leave allowance of 12 calendar weeks in any 12-month period.
- However, this is only available as an entitlement where the mother concerned has completed a full year of employment with her employer.
- Currently an employer is legally required to offer 20 working days leave on full pay, 20 working days leave on half-pay and 20 working days on no pay.
Paternity Leave
- There is no paternity leave
Sick Leave
- Officers appointed on pensionable, contract or temporary terms may be granted 10 days’ sick leave during a calendar year on submission of a medical certificate
Work Hours
- The standard work week in the Cayman Islands is forty-five hours, or nine hours a day.
Overtime
- Overtime must be paid to an employee when his or her working hours exceed either the standard working week (45 hours) or on any given day the standard work day (nine hours).
- Overtime must be paid by an employer at time and a half based on the employee’s basic hourly rate.
Notice Period
- The notice period is the same as the time between paydays (subject to completion of any probationary period and the terms of the employment contract).
- Where no notice period is prescribed it is deemed to be the interval between pay days.
Severance
- Severance Pay is calculated as being one week's pay, at the latest "basic wage", for each completed year of service.
- "Basic wage" means the ordinary wage due to an employee under his or her contract of employment.
- It does not include such matters as future anticipated gratuities and commissions.
- Accordingly, for many, the basic wage will be CI$6.00 (or such other higher number set out in their contract of employment.
- Where no formal contract exists, the amount can be determined by reference to the conduct of the employer and employee – i.e. what is the basic wage that has in fact been paid.
13th / 14th Month Pay
- No
- There is no statutory requirement to pay the 13th or 14th month salary.
- Employers however are required to give benefits such as health insurance.
income tax
- There are no income taxes imposed on individuals in the Cayman Islands.
deductible expenses
- Since no income taxes are imposed on individuals in the Cayman Islands, deductions from income are not relevant in the context of Cayman Islands taxation.
immigration
- The Cayman Islands’ immigration policy gives employment precedence to those who hold Caymanian status, but recognizes that the continuing expansion of the economy often entails the recruitment of skilled individuals from overseas.
- An employer who is unable to find a Caymanian with the necessary qualifications to fill a vacancy may apply for a work permit to bring in a qualified non-Caymanian.
- Non-Caymanians wishing to work in the Cayman Islands must have job offers from local employers who must apply for work permits.
- Work permits are normally issued for a specific occupation with a specific employer.
- The relevant board may set conditions or limitations on granting a permit. Before an application is made to the relevant board, the vacant position must be advertised every six months in the local press for a minimum of two issues for two consecutive weeks and must indicate a full and accurate job description, remuneration, benefits and identity of the employer.
- The following actions are required by a foreign national seeking employment:
-
- Obtain, complete and return to the employer the work permit application form, together with evidence of qualifications and experience.
- Enclose one full-faced, passport-size photograph.
- Obtain a police clearance certificate from the applicant’s home district or last place of residence, issued within six months before the date of application. For applicants from the United Kingdom and other jurisdictions where the police do not readily issue clearance certificates, an affidavit of no convictions, sworn before a notary public, may be submitted.
- Obtain a medical certificate of good health, completed on the board’s prescribed form.
- Provide notarized copies of any professional certifications or credentials to support the applicant’s qualification for the position.
- If the applicant’s dependents are also seeking to reside in the Cayman Islands as part of the work permit application, provide certified copies of the marriage certificate for the spouse and birth certificates for the dependent children. A police clearance certificate and completed medical exam are also required for the spouse and dependent children over the age of 18.
- Companies licensed to carry on business in the Cayman Islands may also submit a detailed business plan outlining their staffing requirements for the next three to five years, including identifying the number of Caymanians employed, plans for training and promotion programs and increasing the number of Caymanians on staff, and the demands for foreign expertise and personnel over that period.
- These business plans are reviewed by the Business Staffing Plan Board and, if accepted, provide a fast track to identify the permit sought as within the categories of the plan.
- Temporary work permits allow foreign nationals to enter the Cayman Islands for specified temporary employment.
- A temporary work permit may be issued for all occupations for periods of up to six months at the discretion of the Chief Immigration Officer.
- A temporary work permit may not be extended or renewed unless it was issued for an initial period of less than six months.
- Applications for temporary or short-term permits are made to the Chief Immigration Officer
- The initial term for a work permit may be up to three years, or up to five years with respect to permits for domestic helpers, doctors, teachers, nurses, ministers of religion or workers filling positions authorized by the employer’s business staffing plan.
- The maximum total time for which an annual work permit may be granted and renewed for an individual is nine years, unless the employee is designated as a key employee.
- On expiration of the nine-year term limit, the person is required to leave the Cayman Islands for a minimum period of one year.
- After the end of this one-year period, the employer may apply for another annual work permit for the individual and the term-limit period begins again.
|
Type of Visa/Permit |
Documentation |
Validity |
Eligibility |
|
Work Permit |
|
3 to 5 years; Maximum 9 years |
|
value added tax
- There is no VAT imposed in the Cayman Islands.
withholding tax
- There are no withholding taxes on dividends, interest, royalties, and fees for technical services.
termination
Grounds for dismissal that are considered to be fair or justified are:
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- Serious misconduct
- Less serious misconduct or failure to perform satisfactorily, following completion of the statutory warning procedure
- Redundancy
- Where continuing the employment would contravene the Labor Law or any other law
- Any other substantial reason where the employer acts reasonably
- The notice period is the same as the time between paydays (subject to completion of any probationary period and the terms of the employment contract).
- Where no notice period is prescribed it is deemed to be the interval between pay days.
- Severance Pay is calculated as being one week's pay, at the latest "basic wage", for each completed year of service.
statutory benefits
- These are mandatory benefits as postulated by law
- These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
- Statutory benefits also include social security benefits
|
Statutory Benefits |
|
Probationary Period |
|
Annual Leave |
|
Public Holidays |
|
Maternity Leave |
|
Sick Leave |
|
Overtime Pay |
|
Notice Period |
|
Severance Pay |
|
Social Security Benefits |
payments and invoicing
- No tax returns, forms, or procedures are required to be completed for tax compliance purposes in the Cayman Islands.
employee accruals
| Christmas Bonus% | 0% |
| Christmas Bonus Over Vacations % | 0% |
| Severance per Year % | Employees are entitled to severance pay that equals 1 week's pay for each completed year of servcie (1.37% of annual salary) |
| Vacations % | Each employee is entitled to a minimum of two weeks' vacation (10 working days) for the first four years of employment (2.74% of annual salary) |
| Notice % | Employees are entitled to 30 days of notice period for one year of service or more (8.24%) |
| Christmas Bonus Over Notifications% | 0% |
| Vacations Plus% | 0% |
| Total percentage of Salary (yearly) | The total employment accruals as a percentage of salary per anum are equal to 12.44% |
employer accruals
Additional information (Country Accruals)
| Pension contribution limit |
CI$87,000 |
| Pension |
5.00% |
| Severance per year of service |
1.92% |
| Description |
All employers in the Cayman Islands must provide pension plans for their employees— this is the law. Employees must contribute a minimum of five percent of their earnings to their pension plans. Pension providers in Cayman provide varied plans, so it is important discuss your pension benefits with your employer. |
Employer Accruals Additional information
| Employment Accruals | ||
| Annual Leave | Each employee is entitled to a minimum of two weeks' vacation (10 working days) for the first four years of employment, three weeks (or 15 working days) for years four to 10, and four weeks (20 days) if employed for over 10 years for the same company. | This equals 2.7% (10/365 days) of annual income |
| Maternity Leave | Currently an employer is legally required to offer 20 working days leave on full pay, 20 working days leave on half-pay and 20 working days on no pay. | This equals 5.4% of annual income. Plus 50% of 5.4% of annual income |
| Sick Leave | Officers appointed on pensionable, contract or temporary terms may be granted 10 days’ sick leave during a calendar year on submission of a medical certificate | This equals 2.7% (10/365 days) of annual income |
| Overtime | Overtime must be paid by an employer at time and a half based on the employee’s basic hourly rate. | Normal hourly rate is around 18.7 KYD. Overtime is paid at an additional 9.35 KYD. |
| Severance | Severance Pay is calculated as being one week's pay, at the latest "basic wage", for each completed year of service. | This equals 1.92% (1/52 weeks) of annual income |
