Explore our EOR & PEO services in DOMINICAN REPUBLIC

As your EOR in the Dominican Republic, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.

Your candidate is hired by a PEO in theÂ Dominican RepublicÂ provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Caribbean Paradise

Country Overview

The Dominican Republic is a country located in the Caribbean, sharing the island of Hispaniola with Haiti. It’s known for its beaches, mountainous landscape, and rich culture. The official language is Spanish, and the currency is the Dominican peso. The population of the country is around 10.8 million people, and it’s the second-largest economy in the Caribbean and Central America.

The country has a mixed economy, with agriculture, manufacturing, and services being the main sectors. It has a large tourism industry, as well as a growing manufacturing sector, particularly in textiles, footwear, and electronics.

General Information

Population: ~10.000.000

Capital City:Â Santo Domingo (population: ~1.500.000)

GDP:Â ~$254 billions

GDP per capita:Â ~$24.000

Currency: Dominican Peso (DOP)

Unemployment:Â ~8.5%

Employer Taxes: 16%

Employee Taxes:Â 0% – 25%

EOR SPECIFICS IN THE DOMINICAN REPUBLIC

Employment Contracts in the Dominican Republic

Contracts can be either oral or written. However, it is recommended that employers have their employees sign written contracts, as they provide more legal protection in case of a dispute. In addition, the Labor Code of the Dominican Republic, regulates the rights and obligations of both employers and employees.

Employment contracts in the Dominican Republic typically include details such as the job title, the employee’s salary and benefits, the length of the contract, and the notice period required for termination. The law stipulates that an employee must work under an employment contract for a minimum of two months before it can be terminated by the employer.

Probation Period in the Dominican Republic

The duration of the probation period is usually specified in the employment contract, and it cannot be longer than 90 days for most positions, according to the Dominican Republic’s Labor Code.

During the probation period, the employee is considered to be in a trial period and the employer has the right to terminate the employment contract without notice, cause or severance payment. The probation period is also an opportunity for the employee to evaluate whether the job and the company are a good fit for them. After the probation period is over, the employee is considered to be a regular employee, and they are entitled to the rights and benefits specified in the labor code.

Working Hours in the Dominican Republic

The standard working hours for most employees is 8 hours per day and 48 hours per week, according to the Labor Code of the Dominican Republic. These working hours are generally considered as a “normal work schedule”. Employers are also required to provide at least one day of rest per week, which is typically Sunday, and must compensate the employee for any work performed on the day of rest.

However, the law also allows for an “extended work schedule”, where employees can work up to 12 hours per day and 72 hours per week. Employers can choose this schedule, but they must compensate the employees accordingly, by paying them time and a half for any hours worked beyond the standard 8 hours per day, and must provide the employee with a day off within the following week.

Vacation Days in the Dominican Republic

In the Dominican Republic, employees are entitled to a certain number of vacation days each year as per the Labor Code. The number of vacation days an employee depends on the length of their service with the company. Employees who have completed one year of continuous service are entitled to 15 working days of paid vacation. For each additional year of service, the employee is entitled to an additional day of vacation, up to a maximum of 30 working days.

Employers are required to inform their employees in writing, at least 30 days in advance, of the dates on which the employee’s vacation is to begin. This allows employees to plan their vacation in advance and also make arrangements for their work during that time. Employers must also pay the employee their regular salary during the vacation period.

It’s also important that vacation days can’t be accumulated, if the employee does not take their vacation within the year they are entitled to, they lose the right to take that vacation. And, vacation days can’t be replaced by their monetary equivalent.

Sick Leave in the Dominican Republic

Employees are given a certain number of days of paid sick leave each year. The Labor Code of the Dominican Republic states that employees are entitled to up to 30 working days of paid sick leave per year. To qualify for paid sick leave, employees must present a medical certificate from a licensed physician, indicating that the employee is unable to work due to illness or injury.

Employers pay the employee their regular salary during the sick leave period. However, if an employee is on sick leave for more than 30 days, the employer is only required to pay the employee’s salary for the first 30 days, after which the employee may be eligible to receive benefits from the National Social Security System.

Wages and Salary Payment in the Dominican Republic

Employees receive regular payment of their wages and salaries according to the terms established in their employment contracts or as provided by law. The standard practice is that wages and salaries should be paid at least once a month, however, some companies pay every 15 days, or even weekly.

Employers provide employees with a written pay stub or salary slip, which shows the amount of the employee’s salary or wages for the pay period, as well as any deductions that have been made. These deductions may include taxes, social security contributions, and other legally required deductions.

The minimum wage in the Dominican Republic is set by the government and it’s reviewed regularly. As of 2021, it’s RD$8,750 (around 156 USD) per month for non-skilled workers. This minimum wage can vary depending on the sector and the region, as there are different wages for different sectors and regions. Employers must ensure that the employees are receiving at least established by the government.

Public Holidays in the Dominican Republic

There are 12 national holidays in the Dominican Republic. On these days, most businesses and government offices are closed and employees are entitled to the day off, with pay. Some of the national holidays include New Year’s Day, Independence Day, and Christmas Day.

Employees who work on a public holiday are entitled to receive a premium pay, which is a minimum of 150% of the regular salary, with some exceptions as according to the Labor Code. Employers are also required to provide employees with a certain number of personal days, which can be taken in addition to the public holidays.

In addition to the national holidays, there are also religious holidays, such as Good Friday and All Saints’ Day, on which many businesses and government offices are closed. There is also a custom of giving a “Paga Extra” or Bonus pay, to the employees on Christmas, which is not legally required but is a common practice among companies.

Employer Taxes in the Dominican Republic

Employers have to make social security contributions for their employees. The contributions are split between the employer and the employee, with the employer responsible for paying a portion of the employee’s social security contributions, which is set at 9% of the employee’s salary. These contributions are used to fund programs such as retirement benefits, health care, and disability benefits.

Employee Taxes in the Dominican Republic

The income tax rate for employees in the Dominican Republic is progressive, with different tax rates applied to different income levels. The tax rate ranges from 10% to 30% on net taxable income above RD$250,000 (around 4,347 USD) annually. Employees are required to file their income tax returns annually, and any taxes owed must be paid by April 30th of each year.

Notice Period in the Dominican Republic

The notice period is a legal requirement to provide both the employer and employee with an opportunity to plan for the end of the employment relationship, and it’s intended to protect the rights of the employee.

The notice period is established by the Labor Code of the Dominican Republic, which provides different notice periods depending on the length of service of the employee. The notice period is as follows:

30 days for employees with less than one year of service
60 days for employees with one to three years of service
90 days for employees with more than three years of service

Employers are required to provide notice to employees in writing, and it must be delivered in person to the employee. The notice must state the reason for the termination and the last day of work. Employers may also negotiate with the employee to waive the notice period, but the employee must agree to it in writing.

Termination / Severance in the Dominican Republic

The termination of an employment contract can occur for various reasons and it’s regulated by the Labor Code of the Dominican Republic. The code establishes the grounds for termination of a contract, the rights and obligations of both parties, as well as the procedures for resolving disputes.

A contract may be terminated by either the employer or the employee, with or without cause. If the contract is terminated by the employer without just cause, the employer is liable to pay the employee compensation equivalent to 20 days salary for each year of service. If the contract is terminated by the employee without just cause, the employee is liable to pay the employer a compensation equivalent to 20 days salary for each year of service.

Just cause for termination includes serious misconduct, such as theft, dishonesty, insubordination, or breach of contract by the employee, or, in the case of the employer, liquidation, bankruptcy, or cessation of business. In these cases, notice period is not required.

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