Dominican Republic PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Dominican Republic to companies willing to enter the Dominican Republic market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Dominican Republic.  However our solution allows you to start the operations in Dominican Republic within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Dominican Republic fast facts

Population, million: 10,8
Land area: 48,671 km² 
Capital: Santo Domingo
Local currency: Peso (DOP)

Hiring, Negotiating and Doing Business in Dominican Republic

Necessity of written employment contract

It is strongly recommended to create a written labor agreement and  to register it at the Ministry of Labor when you hire a new employee. While you can have a verbal agreement, a judge will not consider it if an employee testifies in court.

Employment contract types include unlimited time, limited time, and pre-determined work or service agreements. No matter what type of contract you choose, you need to include important employment information, such as working hours, salary, benefits, termination requirements, and more. Make sure all contracts are in the employee’s language, and list salary and compensation amounts in Dominican pesos.

Different forms of engagement: employment, contracting, work with private entrepreneur

Approximately 200,000 people, or about 8 percent of the workforce, are employed in the free-zone sector. Wages in the free zones are low, averaging no more than US$120 monthly, with supervisors earning perhaps US$350. Trade unions are in theory legal and entitled to operate in workplaces, but many employers routinely fire union activists as “troublemakers.”

The industrial free zones, in particular, are notoriously hostile to union activity. The union movement is further weakened and fragmented by inter-party competition. The largest union, the National Confederation of Dominican Workers (CNTD), claims fewer than 200,000 members nationally. Public-sector workers such as teachers, doctors, and hospital workers have been especially successful in organizing strikes in recent years.

Dominican Republic Employment Contract

Employment agreements

A written contract of employment is not required, except in certain cases (such as when hiring employees for a specific time frame or a particular job or foreign employees who need immigration permits to be relocated to the Dominican Republic), since the Labour Code governs the employment relationship and indicates that the employment contract is not that which exists in writing but rather that which is performed in practice. If a written employment contract is executed, two original copies of this must be filed with the corresponding Labour Department. The minimum rights included in the Labour Code cannot be superseded by the provisions of an employment contract, unless these provisions enhance such rights.

Dominican Republic working hours

Normal working  hours may not exceed eight hours a day nor 44 hours a week. Employees in executive or managerial positions are exempted from this rule.

If an employee is required to work during his weekly period of rest, he is entitled to receive a 100% premium on his salary for his work during that time or given compensatory time off the following week.

Work for more than 44 hours a week is considered overtime and must be paid with a 35% premium over regular hours. Hours worked in excess of 68 hours a week are paid at a 100% premium. Overtime pay does not apply to managers.

Vacation leave in Dominican Republic

Employees should also receive 14 working days of paid vacation annually, starting on their first anniversary. After five years with your company, they should get 18 days off.

Dominican Republic Maternity Leave

Three months off— 1.5 months before giving birth and 1.5 months after giving birth.

Dominican Republic Severance Laws

Termination of employment:

When you set up your Dominican Republic payroll, you need to draft termination and entitlement terms that will help you stay compliant. Any party can terminate an employment contract without a specific cause. 

Length of Employment        Minimum Advance Notice
From 3 to 6 months                                           7 days
More than 6 months to 12 months                14 days
More than 12 months                                       28 days

Dominican Republic Tax

Personal Income Tax 

Individuals pay tax on income in excess of 416,220 Dominican pesos (DOP). Personal income is taxed at the following rates (the scale is based on annual income):

Social Security contributions

Pensions

Employers contribute 7.10% of salaries and withhold 2.87% from employees’ salaries for pensions. The quotable salaries for contribution are 20 minimum wages. This contribution is mandatory. In cases where the employee already contributes in their home country, one should obtain a certification of contribution from the Social Security Ministry in their home country in order to avoid double contribution. Such document should be filed by the employer, as the withholding agent of the employee, to the Dominican Social Security Ministry in order to justify the employee’s non-contribution.

Family healthcare

Employers contribute 7.09% of salaries and withhold 3.04% from employees’ salaries for family healthcare. The quotable salaries for contribution are ten minimum wages. This contribution is mandatory and has no exceptions.

Labour risks insurance

Employers contribute 1.2% of salaries for labour risks insurance. The quotable salaries for contribution are four minimum wages.

Inheritance tax for individuals is 3%, which is charged to the successors and beneficiaries.

Health Insurance Benefits in Dominican Republic

Entitlement to time off

• Marriage: Five days off
• Death of a close family member: Three days off

Additional Benefits in Dominican Republic

If an employee is required to work during his weekly period of rest, he is entitled to receive a 100% premium on his salary for his work during that time or given compensatory time off the following week.

Dominican Republic Holidays

The Dominican Republic celebrates 12 national holidays, and you should give employees those days off.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.