Definitive Guide to Hiring in Curacao

Hiring in Curacao

Hiring employees compliantly in Curacao means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Curacao 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 Curacao; or

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

Labor Laws in Curacao

Employee Probation Period

• This trial period must be agreed to in writing and may not exceed two months; any stipulation to the contrary renders the entire trial period stipulation null and void.

Annual Leave in Curacao

• Every employee is entitled to an amount of vacation days per year equal to at least three times the contracted number of working days per week, with a minimum of fifteen days per year for employees who work six days per week.
• During an employee’s vacation, the employee remains entitled to receive his salary.

Holidays in Curacao

Maternity Leave Curacao

• An employee is entitled to payment of 100% of her salary when she is on pregnancy- and maternity leave.
• The pregnancy leave can be two to six weeks before the estimated due date and the maternity leave can be eight to twelve weeks as of the date the employee gave birth.
• The total amount of time on leave (pregnancy leave and maternity leave combined) must in all events be at least fourteen weeks.

Paternity Leave Curacao

• Fathers are entitled to 5 days of parental leave

Sick Leave in Curacao

• In the event an employee is unable to perform his/her labor due to sickness (that is not intentionally caused by the employee), the employer is obligated to continue payment of (80% of) the employee’s salary during a relative short period of time (unless otherwise stipulated in the labor agreement).

Working Hours in Curacao

• For non-schedule workers the maximum working hours per week calculated over a four weeks’ period is forty hours, provided the employee does not work more than ten hours a day.
• For schedule workers the maximum working hours calculated over a four weeks’ period is forty-five hours per week, provided the employee does not work more than ten hours a day.

Overtime in Curacao

• The maximum time of labor inclusive overtime for scheduled workers is 11 hours per day and 55 hours per week.
• Overtime has to be compensated by a surplus above the salary of 50%.
• The employee and employer may agree by writing that overtime is not to be paid in money but in time-back (1.5 hours per 1 hour overtime).

Termination of Employment in Curacao

Generally, there are four ways to terminate an employment agreement in Curaçao:

1. Termination by giving notice,
   • in which event the prior approval from the Director of the Ministry of Social Development, Labor and Welfare (Ministerie van Sociale Ontwikkeling, Arbeid en Welzijn) has to be obtained pursuant to the National Ordinance Termination Employment Agreements (Landsverordening Beëindiging Arbeidsovereenkomst).
   • Without such prior consent, a termination by giving notice will be considered null and void, unless, the National Ordinance Termination Employment Agreements is not applicable to a certain labor relationship.
   • The National Ordinance Termination Employment Agreements is for example not applicable to teaching and lecturing personnel who work at an educational institution.
2. Termination by mutual consent
   • Termination by mutual consent is possible at any time, in which event the employer and the employee can freely negotiate the terms and conditions for the termination of the employment agreement.
3. Dissolution of the employment agreement by the Court of First Instance of Curaçao.
4. Immediate termination of the employment agreement, which is only allowed if there is an urgent reason, justifying an immediate termination. Such urgent reason and the immediate termination would have to be communicated to the employee ‘forthwith’.

Notice Period in Curacao

• The notice period is related to the years of service of the employee at the time of termination
• The mandatory notice periods that must be taken into account by the employer are as follows:
• In case of an employment of less than five years: one month;
• In case the employee has been employed more than five but less than ten years: two months;
• In case the employment has lasted longer than ten years but less than fifteen years: three months;
• In case the employment has lasted more than fifteen years: four months.

Severance in Curacao

• The employee whose employment agreement is terminated without fault on his part or for a reason that cannot be attributed to him is entitled to a onetime monetary compensation known as the ‘cessantia’ (provided the employee has been employed for at least one year).
• This cessantia payment is regulated in the Cessantia Ordinance (Landsverordening Cessantia) and is calculated based on the years of service.
• The employee must claim his cessantia pay within one year after termination of the employment agreement.

Curacao Salary and Wages

13th Month Salary in Curacao

• No
• There is no statutory requirement to pay the 13th or 14th month.
• Employees are entitled to their wages while on holiday but the employer is under no obligation to give a vacation allowance.

• All resident individuals must pay social security contributions.
• The contributions provide benefits under the AOV, the General Widows and Orphans Ordinance (AWW) and the General Insurance Extraordinary Sickness Ordinance (AVBZ).
• The Basic Illness Insurance (BVZ), which was amended 1 November 2014, partially replaces the old Illness Insurance (ZV).
• The ZV continues to exist in a significantly amended form.
• The ZV now requires the employer to contribute at a rate of 1.9% for employees with an annual income not exceeding the threshold NAV 80,059.2 as determined by the Social Security Bank.
• In principle, all Curaçao residents fall within the scope of the BVZ.
• However, in certain cases, an exemption may be requested (for example, for individuals who are privately insured for medical expenses with an insurance company that provides worldwide coverage and individuals who need a temporary residency permit to be admitted to Curaçao).
• Nonresidents are not subject to BVZ.
• The BVZ mainly consists of the following two components:
  • Income-based premium: 13.6% (pensioners, 6.5%), payable by employers at a rate of 9.3% and employees at a rate of 4.3%, up to income of ANG150,000
  • Own-risk premium: ANG1 per prescription line
• The total AOV/AWW contributions payable annually are 16% of earnings.
• In 2023, for AOV/AWW, employers contribute 9.5% of salary, up to a certain maximum amount of contributions per year (ANG9,500 for 2019) and employees contribute 6.5% of salary, up to a certain maximum amount of contributions per year (ANG6,500 for 2019).
• The maximum AOV premium income is ANG100,000.
• However, if the individual insured under the AOV has income exceeding ANG100,000 per year, an additional premium contribution of 1% is payable by the individual on an income in excess of ANG100,000.
• In principle, nonresidents are not subject to AOV/ AWW.
• For AVBZ, the following are the contributions:
  • Employers: 0.5% of salary
  • Employees: 1.5% of salary
  • Self-employed persons: 2% of earnings
  • Pensioners: 1.5% of pension income
• The rates of contributions for AVBZ are applied to taxable income, up to a maximum amount (NAV 565,926.54 for 2023)
• Only nonresidents who earn income from employment and are subject to wage tax in Curaçao are subject to AVBZ.
• The rate of required disability insurance (OV) contributions for employees and self-employed individuals varies between 0.5% and 5%, depending on the applicable risk category.
• The contribution is fully payable by the employer.
• OV contributions are due on salaries up to a certain maximum amount (NAV 6,671.6 for 2023)
• Only nonresidents earning income from employment in Curaçao are covered by OV and ZV.
• Employers must pay the premiums for the employees.

Immigration Curacao

• U.S. citizens and Dutch national are allowed to stay in Curacao without a visa or permit for a maximum consecutive period of six months each calendar year.
• If you want to stay longer than 180 days, or if you want to work, you must apply for a residence permit.
• A short stay Caribbean visa allows nationals who do require a visa to make short visits to Aruba, Curacao, St Maarten, Bonaire, St Eustatius, and Saba
• The Caribbean visa is a multiple entry visa and is valid for a maximum of 90 days
• In order to obtain a work permit, you need an employer to sponsor your work permit and initiate the application of the same, after having advertised a position in local newspapers and failed to fill it.
• The work permit is needed in addition to the residence permit.
• In general, a residence permit does not allow employment.
• The Landsverordening Arbeid Vreemdelingen (LAV) is Curacao’s National Ordinance on Labor by Foreigners.
• They provide the rules with regard to the working permits for those foreigners who wish to work on the island.

Value Added Tax (VAT) in Curacao

• Sales tax is levied on the sale of goods and provision of services
• The standard rate is 6%, with 0%, 7% and 9% rates applicable in certain cases

Mandatory Benefits in Curacao

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

Payroll Accrual in Curacao

Country Accruals Additional Information

Payroll Accruals Additional Information

Accrued Benefits in Curacao

Why use Global Expansion to hire in Curacao

Establishing a branch office or subsidiary in Curacao 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 Curacao labor laws are complex.

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

Global Expansion makes it easy for you to expand into Curacao. 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 Curacao 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.