Bahamas PEO & Employer of Record

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

Traditional approach requires establishing a subsidiary in Bahamas.  However our Employer of Record solution allows you to start the operations in Bahamas within a few days, therefore, 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. 

Bahamas fast facts

Population, million: 393,244
Land area: 13,878 km²
Capital: Nassau
Local currency: Bahamian dollar (BSD), US dollars (widely accepted)

GDP per capita:$ 27000.00
GDP in currency:$ 11.70 billion

Legislative acts and other regulations that govern the relations between employer and employee

The Employment Act 2001 (EA) is the main legislation that governs employment relationships in The Bahamas. The EA provides the minimum standards that apply to employment within The Bahamas. The EA sought to codify the law regarding the relationship between the employer and employee with the inclusion of the following provisions (among others):

• Standard hours of work.
• Non-discrimination.
• Termination of employment.
• Sick and vacation leave.

Other legislative acts:

• Minimum Wage Act. This sets out the minimum remuneration (excluding tips, bonuses and other gratuities) that persons working within The Bahamas are entitled to receive. This is regardless of whether they work on an hourly, daily or weekly basis.
• Industrial Relations Act. This provides rules and regulations relating to unions, industrial actions, and related procedural issues. The Act also provides a framework within which employment-related disputes can be resolved either through a conciliation process or by a specialised tribunal.
• Health and Safety at Work Act. This sets out guidelines related to health and safety facilities that must be afforded to employees.

Hiring, Negotiating and Doing Business in Bahamas

Necessity of written employment contract

There is no legal requirement for a contract of employment to be in writing. An employment contract can have terms that are expressed or implied, and verbal or written.

However the Employment Act provides that certain terms of employment need to be communicated to an employee as soon as practicable on commencing employment. Such terms can be outlined in a written agreement and must include the following particulars:

• The name of the employer or group of employers, and where practicable the place of employment.
• The name of the employee, the place of engagement and where practicable the place of origin of the employee, and any other particulars necessary for their identification.
• The nature of employment.
• Where a person is engaged for a fixed period, or in appropriate circumstances, the duration of the employment and the method of calculating the duration.
• The rate of wages and other benefits and method of calculation thereof, the manner and period of payment of wages and other benefits, if any, and the manner of repayment of any such advances.
• Where any work is to be performed by time, the number of hours of daily work, and the hours of the day at which such work is to commence and to terminate.

In the absence of any express terms, or where a contract of employment is silent with regard to a particular issue, the EA will essentially be implied within the contract of employment so as to set the minimum standards. Additional terms will generally be determined in accordance with the type of work required as well as the employee’s position within the company.

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

Collective agreements can be utilised by some employers and employees if the employees are members of a recognised trade union.

According to the law, “independent contractor” is free from control and direction over the performance of the services, and is engaged in an independently established trade, occupation, profession or business.If these requirements are not met, an individual performing services for payment is presumed to be an employee. 

Bahamas Employment Contract

Types of employment agreements

Fixed-term agreements, – any limitations, such as max duration or number of fixed-term agreements.
Short term contracts of employment, sometimes called fixed term contracts, are fairly common in The Bahamas. Employment Act does not contain any restriction on the use of fixed-term contracts.

Bahamas working hours

Max is 8 hours per day and 40 hours per week. In every seven-day period, an employer shall allow each employee at least forty-eight hours of rest with not less than twenty-four of such hours being consecutive and a period of twenty-four hours rest is in this Act referred to as a day off.

Overtime

Where an employee is required or permitted to work in excess of the standard hours of work, he shall be paid in respect of such work at a rate of wages not less than:

• in the case of overtime work performed on any public holiday or day off, twice his regular rate of wages;
• in any other case, one and one-half times his regular rate of wages

Vacation leave in Bahamas

Every employer shall give a vacation of at least 2 weeks to each employee upon the completion of each 12 months of employment. The vacation given under subsection shall be extended by one day for every public holiday that occurs during the vacation.

The vacation pay (is paid at least 1 day prior to vacation)

• in respect of an employee who has been employed for six months or more but under one year, shall be one week basic pay earned by the employee during the year of employment in respect of which he is entitled to the vacation;
• in respect of an employee who has been employed for one year or more but under seven years, shall be two weeks basic pay earned by the employee during the year of employment in respect of which he is entitled to the vacation;
• in respect of an employee who has been employed for seven years or more shall be three weeks basic pay earned by the employee during the year of employment in respect of which he is entitled to the vacation.

Bahamas Maternity Leave

A female employee must in order to qualify for a grant of maternity leave, be employed for at least twelve months by the employer from whom she requests such leave; and is not entitled to maternity pay by the same employer more than once in every three years. Except where an employee otherwise desires, maternity leave shall be for a period of not less than 9 weeks and shall be so arranged that the employee is allowed such period, not less than one week, as she desires before the expected date of confinement; and a period of not less than eight weeks from the date of confinement.

Parental leaves

Not stipulated by Employment Act

Sick leaves

An employee who has been employed for at least 6 months is entitled to 1 week sick leave with pay in any year where he is prevented by illness from performing his duties at his place of work.
Provided that no employee shall be entitled to receive payment in respect of periods of sick leave which is only one day long nor to accumulate such leave from year to year. Medical certificate has to be submitted (except of 1st day of sickness). But employee has to receive a payment from 1st day of illness.  An employer may, on processing a claim for sick leave by an employee, require such employee to be examined by an independent physician and may refuse such leave if the physician is of the opinion that the employee is fit for work.

Bahamas Severance Laws

Under the Employment Act, employees can be terminated without cause, and at any time, provided that employees are provided with a minimum period of notice (or pay in lieu of notice) and severance pay. This statutory position can be varied by express terms within a contract of employment, which may set out specific requirements and procedures related to dismissals. Such terms can include disciplinary procedures leading to summary dismissals. Where an employer fails to provide an employee with the minimum period of notice and the minimum severance pay, the employer may be liable to a claim for wrongful dismissal. Additionally, if there is something manifestly unjust in relation to the dismissal, there is also the possibility of liability in relation to unfair dismissal.

Where an employee has committed a fundamental breach of the terms of the employment contract, or has acted in a manner repugnant to the fundamental interests of the employer, the employer will generally have the right to summarily dismiss that employee without notice and without any severance pay. Many employment contracts expressly provide specific instances that will justify summary dismissal. However, the statutory grounds for summary dismissal, as set out under the EA, include:

• Theft.
• Fraudulent offences.
• Dishonesty.
• Gross insubordination or insolence.
• Gross indecency.
• Breach of confidentiality, which does not include a report made to a law enforcement agency or to a government regulatory department or agency.
• Gross negligence.
• Incompetence.
• Gross misconduct.

Notice periods

The minimum period of notice required to be given by an employer to terminate the contract of employment of an employee shall be:

• 6 – 12 months of employment or more but less than 12 months- one week’s notice or one week’s basic pay in lieu of notice; and one week’s basic pay (or a part thereof on a pro rata basis) for the said period between 6 months and 12 months;
• 12 months or more – two weeks’ notice or two weeks’ basic pay in lieu of notice; and two weeks’ basic pay (or a part thereof on a pro rata basis) for each year up to 24 weeks
• where the employee holds a supervisory or managerial position- one month’s notice or one month’s basic pay in lieu of notice; and one month’s basic pay (or a part thereof on a pro rata basis) for each year up to forty-eight weeks.

An employee shall not terminate his employment until after the expiry of

• two weeks’ notice to the employer if the period of employment is one year or more but less than two years; or
• four weeks’ notice to the employer if the period of employment is two years or more.

Bahamas Tax

The Social Security Act is used to finance compensation to employees for maternity, death, unemployment, accidents, illnesses, and physical disabilities occurring outside the workplace.

Employees’ contributions are withheld from their wages by employers and are allowed as a tax deduction against employee’s assessable income. Employee and employer’s contributions are remitted monthly to the appropriate authorities and failure to remit the contributions results in penalties.

Employers (with one or more employees) and the government are each required to contribute 5 percent of the employee’s wage to the social security fund, subject in each case to a maximum contribution of THB750 (5 percent of THB15,000) per month.

Employees pay contributions at 5 percent, subject to a maximum contribution of THB750 (5 percent of THB15,000) per month.

Health Insurance Benefits in Bahamas

Every employer must be registered with the National Insurance Board and must register all employees with the National Insurance Board. National insurance contributions are made by both the employer and employee and are determined on the basis of the relevant insurable wage. The maximum insurable wage is US$670 per week and the rate paid on the insurable wage by the employer is 5.9%.

Additional Benefits in Bahamas

A 13th month or annual bonus is not required but is market norm.

Bahamas Holidays

• New Year’s Day,
• Majority Rule Day
• Good Friday
• Easter Monday
• Whit Monday
• Randol Fawkes Labour Day
• Independence Day
• Emancipation Day
• National Heroes Day
• Christmas Day
• Boxing Day

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.