Definitive Guide to Hiring in Papua New Guinea

Hiring in Papua New Guinea

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

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

Labor Laws in Papua New Guinea

Annual Leave in Papua New Guinea

• In Papua New Guinea, employees, other than those engaged on a casual basis, are entitled to 14 days' paid annual leave.

Holidays in Papua New Guinea

Maternity Leave Papua New Guinea

• In the PNG public sector, female employees receive six weeks' maternity leave on full pay before delivering their baby and six weeks' maternity leave on full pay after delivery.
• This contrasts with the private sector where maternity leave is generally without pay.

Paternity Leave Papua New Guinea

• There is no paternity leave

Sick Leave in Papua New Guinea

• In Papua New Guinea, employees, other than those engaged on a casual basis, are entitled to 6 days' paid sick leave for each year of service.

Working Hours in Papua New Guinea

• Typically, employees work a 42-hour week. Most employees will work eight hours per day from Monday to Friday and two hours between 7 am and 12 noon Saturday.
• Under the relevant labor laws employees must not work in excess of 12 hours in any one day.

Overtime in Papua New Guinea

• An employer may require an employee to work a reasonable amount of overtime.
• Where overtime is to be worked on a Sunday or a public holiday, it shall be by agreement between the employer and the employee or between their respective registered industrial organizations.
• Overtime worked
  • on a Sunday shall be paid at twice the hourly rate;
  • on a public holiday shall be paid at the hourly rate; and
  • at any time, other than a Sunday or a public holiday, shall be paid at one and one half times the hourly rate.

Termination of Employment in Papua New Guinea

An employer may terminate a contract of service without notice or payment instead of notice where the employee:

• willfully disobeys a lawful and reasonable order; or
• misconducts himself by an act of omission or commission that is inconsistent with the due and faithful discharge of his duties; or
• is guilty of a fraud or dishonesty; or
• is habitually neglectful of his duties; or
• is imprisoned for a period exceeding seven days; or
• is continually absent from his employment without leave or reasonable excuse; or
• is convicted of an offence or contravention of this Act or any other law relating to employment; or
• on any other ground on which he would be entitled to terminate the contract without notice at common law.
• A party to a contract of service may, at any time, give notice to the other party of his intention to terminate the contract.
• The length of notice of intention required to terminate a contract of service shall be the same for both parties and
  • shall be as specified in the contract; or
  • shall be not less than the periods specified in Subsection
  • Where there is no provision in a contract of service for notice of intention to terminate,
    • the length of the notice shall be not less than–one day’s notice if the employee has been employed for less than four weeks; or
    • one week’s notice if the employee has been employed for not less than four weeks and for less than one year; or
    • two weeks’ notice if the employee has been employed for not less than one year and for less than five years; or
    • four weeks’ notice if the employee has been employed for five years or more.

Notice Period in Papua New Guinea

• A party to a contract of service may, at any time, give notice to the other party of his intention to terminate the contract.
• The length of notice of intention required to terminate a contract of service shall be the same for both parties and
  • shall be as specified in the contract; or
  • shall be not less than the periods specified in Subsection
  • Where there is no provision in a contract of service for notice of intention to terminate,
    • the length of the notice shall be not less than–one day’s notice if the employee has been employed for less than four weeks; or
    • one week’s notice if the employee has been employed for not less than four weeks and for less than one year; or
    • two weeks’ notice if the employee has been employed for not less than one year and for less than five years; or
    • four weeks’ notice if the employee has been employed for five years or more.

Papua New Guinea Salary and Wages

13 / 14th Month Salary in Papua New Guinea

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• However, employees are entitled to 14 days leave after working for 12 months.

• Papua New Guinea does not have a social security system.
• However, there are compulsory superannuation contributions for PNG citizen employees (superannuation contributions are not currently required for non-citizen employees but may be made on a voluntary basis).
• An employer of 15 or more persons must register with an authorized superannuation fund, unless operating in an exempt industry (currently certain agricultural sectors).
• Membership is compulsory for PNG citizens who work for more than 59 days in any three-month period and voluntary for non-citizens.
• Contributions are remitted by the employer at the following rates, as a percentage of gross basic salary (excluding overtime, bonus, and commission):
  • 6.0% employee contributions (i.e. after-tax contributions).
  • 8.4% employer contributions (i.e. pre-tax contributions).

Immigration Papua New Guinea

• Non-citizens seeking to enter PNG for employment in the private sector may apply for a work and employment permit.
• The work permit can be issued for short- or long-term periods from six months and up to five years.
• The work and employment permit process consists of the following three steps:
  • A work permit application must be submitted to the Department of Labor and Industrial Relations (DLIR).
  • Once the work permit is approved, an entry permit application must be submitted to the PNGICA.
  • Once the work permit and entry permit are approved, the visa will be telexed to the nearest PNG consulate (or Australian consulate) for the consular visa issuance.
• Long-term work permits can be renewed in the country or out of the country three months prior to the expiration of the work permit.
• However, any changes to the applicant’s employer or occupation (including promotion) will require the individual to apply for a new work permit.
• If individuals repatriate prior to the expiration of their work permits, they will be required to submit a work permit cancellation application with DLIR.
• Applicants may be required to apply for membership and registration with professional bodies in PNG prior to the submission of their work permit application.0
• For example, engineers are required to apply for membership with the Institution of Engineers Papua New Guinea (IEPNG), and accountants are required to apply for membership with Chartered Professional Accountants Papua New Guinea (CPA PNG).
• Spouses (including de facto spouses) and dependents can apply for a dependent entry permit with PNGICA. Family members who are not included in a temporary resident’s initial visa application may generally apply for a visa at a later date.

Value Added Tax (VAT) in Papua New Guine

• The GST rate is 10% and applies to most goods and services supplied in Papua New Guinea.
• Exported goods and services attract a zero rate of GST.
• The supply of some goods and services are exempt, including medical, educational, and financial services.
• Land is excluded from GST, but buildings and other improvements are subject to the tax.

Mandatory Benefits in Papua New Guinea

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

Payroll Accrual in Papua New Guinea

Country Accruals Additional Information

Description

Payroll Accruals Additional Information

Accrued Benefits in Papua New Guinea

Why use Global Expansion to hire in Papua New Guinea

Establishing a branch office or subsidiary in Papua New Guinea 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 Papua New Guinea labor laws are complex.

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

Global Expansion makes it easy for you to expand into Papua New Guinea. 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 Papua New Guinea 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.