Barbados PEO & Employer of Record

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

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

Barbados fast facts

Population, million: 287,375
Land area: 431 km²
Capital: Bridgetown
Local currency: Barbados Dollar (BBD‎)

GDP per capita:$ 15900.00
GDP in currency:$ 5.03 billion

Barbados is a beautiful Caribbean island nation that offers economic promise for many international companies. With agriculture and tourism driving the country and a high quality of life, both locals and international workers can find success and prosperity in the area.

Under Section 17 of the Immigration Act, non-citizens can work on the island only if they have been granted a work permit. An amendment to the Act provides for certain CARICOM (Caribbean Common Market) nationals to live and work in Barbados without a work permit.

As of September 3, Barbados developed a new immigration program named “12-month”
Welcome Stamp’ for entry into the country for individuals who are remotely working currently.
The program provides the visitors with the option to work remotely from Barbados for up toa year at a time, with certain conditions including possessing of a valid passport and health insurance, more than US$50,000 income earned from sources outside Barbados over the 12-month period.

Hiring, Negotiating and Doing Business in Barbados

Necessity of written employment contract

Barbados’s labor laws define an employment contract as a written or oral agreement between you and an employee. If you choose to write a formal document, it should include:

• Employee name.
• Employer name and address.
• Date the employment commences/commenced.
• Date of continuous employment.
• Title of the job.
• Description of the work for which he/she is employed.
• Scale or rate of wages and the method of calculating wages.
• Intervals at which wages are paid.
• Normal working hours.
• Probation period, if applicable.
• Length of notice which the employee is obliged to give and entitled to receive in respect of termination of his contract of employment.
• Period for which employment is expected to continue where the employment is not intended to be permanent or the date the employment is to end where it is for a fixed period.
• Place of work. Where an employee is required or permitted to work at various places, an indication of that and the address.
• Any collective agreements which directly affect the terms and conditions of the employment including where the employer is not a party, the persons by whom the collective agreements were made.
• Any termsrelating to the following:
  • Entitlement to holidays and holiday pay.
  • Incapacity owing to sickness or injury including any health scheme.
  • Pension and pension schemes.
• A statement or note specifying disciplinary rules and a description of where an employee can apply should he/she be dissatisfied with any disciplinary decision.
• The person to whom he/she can apply for the purpose of seeking redress on any grievance relating to employment.

Barbados Employment Contract

Types of employment agreements

Fixed-term agreements, – any limitations, such as max duration or number of fixed-term agreements. Temporary contracts should not be more than 12 continuous months.

Barbados working hours

The standard workweek in the country is 40 hours at eight hours each day. Every employee is entitled to two rest days a week, typically on Saturday and Sunday. However, these rest days can occur during any two days as they’re at your discretion.

Overtime

Overtime is optional and defined as any length of time over the working hours determined in the contract. You cannot require overtime work at any point. If workers request or take overtime, they should receive 150 percent of their regular rate during those excess hours.

Vacation leave in Barbados

To qualify for annual leave, monthly, fortnightly and weekly paid employees must work for 208 days to be eligible for the full three (3) weeks. Hourly, daily or other paid persons must work for 150 days to be eligible for the three (3) weeks’ leave.

An employer may postpone an employee’s holiday for up to six (6) months once the employee becomes entitled. Further postponement can only be facilitated by the Chief Labour Officer.

Barbados Maternity Leave

Key Features:

• An employee is required to provide a certificate from a medical practitioner advising the expected date of confinement; or a certificate issued by a medical practitioner or a midwife advising the actual date of confinement.
  To qualify for a grant of maternity leave an employee must be employed for at least twelve (12) months.
• Maternity leave is granted for a period of not less than twelve (12) weeks. It may be granted as a period not exceeding six (6) weeks prior to the expected date of confinement and not less than six (6) weeks after the date of confinement.A medical practitioner may recommend up to six (6) weeks additional leave for illness arising out of such confinement.
• The right not to be dismissed or to be given notice of dismissal between the date of delivery given on the medical certificate and the expiration of maternity leave or additional maternity leave granted.
• The right not to be given notice of dismissal which expires during maternity leave or additional maternity leave or to be dismissed during such leave.
• The right not to be dismissed or required to resign because of pregnancy.
• The right not to be required to resign during maternity leave or additional maternity leave.
• The right on resumption of work following maternity leave, to seniority rights and reinstatement in the former work or equivalent work.

Barbados Severance Laws

Key Features:

• For severance to be paid, the employee must have two (2) years or 104 weeks of continuous employment with the same employer.
• Severance is paid as a result of redundancy; being laid off or kept on short time; or dismissal due to a natural disaster.
• Redundancy means:
  • The employer has ceased or intends to cease to carry on business for the purposes of which the employee was employed or to carry on that business in the place where the employee was employed;
  • The requirements of that business for employees to carry out work for which they were hired to carry out have ceased or diminished or are expected to cease or diminish.
• For severance to be paid the employee must have been laid off for thirteen (13) consecutive weeks or sixteen (16) out of twenty – six (26) weeks when the contract of employment is terminated.
• An employee shall not be deemed to be employed in work of a seasonal nature if he is employed outside of the season whether in the same or different capacity and the total of the periods of employment with his employer amounts to thirty – five (35) weeks or more in any year.
• To qualify for a severance payment, an employee must be between the ages of 16 and up to the retirement age currently sixty – six (66) and a half years (the age of eligibility for a full pension from NIS)
• To qualify for a severance payment an employee must be contracted for not less than twenty – one (21) hours per week.
• An employee’s severance pay is calculated as follows:
  • 2.5 weeks’ pay for the first ten completed years of employment, calculated at his average weekly basic pay for the last 104 weeks;
  • 3 weeks’ pay for the next ten completed years of employment;
  • 3.5 weeks’ pay for the every completed year of employment greater than 20 years, but not more than 33 completed years of employment.

• No tax is deducted from severance payments.
• The severance payment must be paid within two (2) months of its becoming due or period up to four (4) months if approved by National Insurance Board allows. After this time interest is added to the unpaid severance payment.
• An employer can revoke his decision to sever an employee’s contract of employment if the employer offers to re-engage the employee on terms similar to those under which he presently works.
• An employer who has paid a severance payment to an employee is entitled to a rebate out of the National Insurance fund.
• An employee is not entitled to a severance payment if:
  • He is dismissed for gross misconduct.
  • The employer, if before the relevant date, offers to renew the contract or re-engage the employee under a new contract on similar terms under which he currently works and the employee unreasonably refused the offer.

Barbados Tax

Income tax is payable on the first BBD 50,000 of taxable income at a rate of 12.5% and on taxable income exceeding BBD 50,000 at a rate of 28.5%. Net residential rental income is taxed at 15%. Gross assessable income up to BBD 25,000 is not subject to tax, by virtue of the basic personal allowance.

The Social Security Rate in Barbados stands at 23.85 percent.

Health Insurance Benefits in Barbados

Insurance Benefits
The general market practice is to offer full health/medical insurance to all permanent full-time employees. These plans include vision and dental coverage and have a group life insurance component. Only a small number of companies offer disability insurance and dependent life insurance.

Pension Plan
The larger companies generally offer pension to their employees. The market trend indicates companies moving away from the defined benefit pension plans to the defined contribution pension plans.
Employees contribute on average between 2% to 5%. The common practice is for the employer to match their contributions up to a maximum of 5%.

Additional Benefits in Barbados

Housing Benefit
Most companies offer this benefit to expatriate employees and rarely to local employees. Companies administer this benefit by paying the rent directly to the landlord or by providing the employee with a housing allowance to cover part or the full cost of the rent. The amount offered is dependent on the company policy, family size and job level. On average a housing allowance for a three person family is BB$5,000. This benefit is taxable.

Vehicle Benefit
Trends indicate that companies are moving away from providing company vehicles due to the expenses relating to fleet management and instead provide a car allowance.
The amount of car allowance varies depending on the company size and job level of the employee. Small to medium sized local companies that provide fully maintained company cars tend to offer this benefit to only top executives. While large organisations tend to offer this benefit to top management, executives and select middle management staff.

However, it is important to note that some positions require the use of a vehicle to allow the employee to function in that role. In these instances, the company provides these employees with fully maintained vehicles.

The value, type and/or brand of vehicle will vary based on job level, for example; top management/executive employees are normally offered company vehicles valued over BB$100,000. This car benefit is taxable.

Professional Subscriptions
Professional subscriptions are generally provided to employees based on their job and level within the organisation. For example, accounting staff have to be members of ACCA, CGA, etc. and most companies would cover the annual membership fees. Most companies do not have a set maximum and cover the full costs of the subscription/membership.

Club Memberships
Mostly medium to large companies offer club memberships relating to social activities such as gym, golf, yacht club, business and service clubs. This perquisite tends to be offered to management level employees or executives and the company will generally cover the full cost but a few organisations would stipulate a maximum number of clubs or provide a cap or set amount for specific positions.

Educational Allowance
Most companies encourage their employees to continuously develop themselves; therefore companies would provide educational assistance by helping to cover the cost of work related courses of study. On average most companies seem to cover between 50% – 75% of the cost of the course.

Barbados Holidays

There are 12 bank holidays in the country, and all employees are entitled to paid time off during these events. Holidays include:

New Year’s Day.
Whit Monday.
National Heroes Day.
Labor Day.
Errol Barrow Day.
Emancipation Day.
Independence Day.
Grand Kadooment Day.
Good Friday.
Easter Monday.
Christmas Day.
Boxing Day.

The general law claims that no person must work on a bank holiday, but there are exceptions to this rule. The Public Holidays Act lists several industries that are not required to give time off during these days, including food service and hospitality. However, if an employee must work on a bank holiday, they should receive double their standard pay rate.

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.