Cuba
Cuba PEO & Employer of Record
WeHG provides an International PEO and global Employer of Record service in Cuba to companies willing to enter the Cubanese market or hire local/expat employees in this country.
Traditional approach requires establishing a subsidiary in Cuba. However our solution allows you to start the operations in Cuba 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.
Table of Contents
Cuba fast facts
Population, million: 11.2
Land area, sq. km: 109,884 km2
Capital: Havana
Local currency: Peso (CUP)
Hiring, Negotiating and Doing Business in Cuba
Necessity of written employment contract
Formally, in Cuba, the employment contract is called ‘Workforce Service Contract’ –Contrato de servicio de fuerza de trabajo-. Generally it is a written agreement between the representatives of the foreign investor and the Cuban state hiring entities. It must include the following: identification of the parties, charge and content of work to be done place, time, duration, remuneration and frequency of payments and health and safety.
Cuba Employment Contract
Types of employment agreements
There are three models of employment contracts in Cuba: indefinite, temporary, and for the execution of a specific job. The last two concern new jobs, substitutions, training, social services and testing periods for new hires that can last between thirty and one hundred and eighty days, depending on the position offered. During this period, either party may terminate the employment relationship.
Cuba working hours
Their working hours are limited to 44 hours per week, higher than in the United States, but still limited. All workers have free health care and participate in a social security retirement system.
Vacation leave in Cuba
All workers are entitles to 30 days.
Sick leave:
Sickness benefit (Subsidio por Enfermedad o Accidente, social insurance): 60% (50% if hospitalized) of the insured’s average monthly earnings in the 12 months before the incapacity began is paid after a three-day waiting period (no waiting period if hospitalized) for up to six months or until a disability pension is paid; may be extended for an additional six months with a medical certificate. Heroic act supplement (Incremento por acto heróico): 20% of the sickness benefit is paid. The minimum monthly sickness benefit is 50% of the legal monthly minimum wage. The legal monthly minimum wage is 16 CUC (400 CUP). The maximum monthly sickness benefit is 90% of the insured’s average monthly earnings in the last 12 months. Tuberculosis benefit (social insurance): 100% of the insured’s earnings is paid until recovery.
Cuba Maternity Leave
Maternity benefit (Licencia Retribuida de Maternidad, social insurance): 100% of the insured’s average weekly earnings in the 12 months immediately before the leave begins is paid for six weeks (eight weeks for multiple births) before and 12 weeks after the expected date of childbirth. The minimum monthly maternity benefit is the legal monthly minimum wage. The legal monthly minimum wage is 16 CUC (400 CUP). Schedule of payments: The maternity benefit is paid in three installments.
Maternity social benefit (Prestación Social, social insurance): 60% of the insured’s mother’s average monthly earnings in the 12 months before the maternity leave is paid until the child is aged 12 months and continues if the mother returns to work. The benefit may be transferred to an employed father or grandparent, in which case 60% of his or her average monthly earnings in the 12 months before childbirth is paid.
Cuba Severance Laws
Article 45 provides that the employment contract may end due to: a) agreement of the parties; b) initiative of any of the parties; c) retirement of the worker; d) death of the worker; e) extinction of the entity, when there is no other subrogated in its place; and f) expiration of the fixed term or the conclusion of the agreed work, in the case of fixed-term contracts or for the execution of a job or work.
Moreover article 49 of Labour Code provides that the employment contract might be terminated by the employer due to: a) loss of proven suitability; b) definitive relocation outside the entity of the available worker, or when the proposed employment is not unjustifiably accepted by the worker, or when the salary guarantee period expires without having been employed; c) definitive relocation outside the entity of the worker who is declared a person with a partial disability; non-suitability of the partial disability fo a job offer according to the worker´s capacity inside or outside the employer or disapproved requalification, in both cases, for unjustified reasons; d) application of the definitive separation measures of the entity or sector or activity, when appropriate, due to the non-observance of the disciplinary norms established in the legislation and in the disciplinary regulations; e) Compliance with the term of the maternity leave or, where appropriate, the social benefit or unpaid maternity leave, in the terms and conditions established in the legislation, without the worker who has enjoyed it being reinstated to the job; f) Sanction of deprivation of liberty by final sentence or security measure, in both cases when it exceeds six months, if the employer so decides; g) non-reinstatement upon expiration of the unpaid leave granted by the employer; and h) other causes provided for in the legislation.
According to article 50, the employer, in the case of contracts for indefinite time, cannot notify the worker of the decision to terminate the contract, for the reasons indicated in paragraphs a), b) and c) of article 49, in the following cases: a) during the
Severance pay
There is no indication of severance payment or redundancy payment of such kind, however according to article 52 of Labour Code, the worker, at the time of termination of the employment relationship, has the right to receive the salary for the work performed, the amount of the accumulated for annual paid vacations, as well as that corresponding to the provision of security social that had been perceiving. In the event of the worker’s death, this right is exercised by the relatives with the right to a social security pension or, failing that, by the heirs who prove such condition.
Cuba Tax
TAX RATE
Income Tax |
Progressive rate from 15% to 50% |
Up to CUP 10,000 |
15% |
CUP 10,000 – 20,000 |
20% |
CUP 20,000 – 30,000 |
30% |
CUP 30,000 – 50,000 |
40% |
Over CUP 50,000 |
50% |
Social Security Contributions Paid By Employers: Employer’s contribution: 14%
Social Security Contributions Paid By Employees: Employee’s contribution: 0%
Additional Benefits in Cuba
Some supplementary bonuses may be prescribed in contract with an employer.
Cuba Holidays
- January 1 – 2 Triumph of the Revolution and Victory Day.
- January 28 – José Martí’s birthday.
- February Cigar Festival.
- May 1 – Labor Day.
- Last week of July – Carnaval in Santiago de Cuba.
- July 26 – National Revolution Day.
- September 8 –Virgen de Cobre Feast 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.
FAQ Cuba
Their working hours are limited to 44 hours per week, higher than in the United States, but still limited. All workers have free health care and participate in a social security retirement system.
- January 1 – 2 Triumph of the Revolution and Victory Day.
- January 28 – José Martí’s birthday.
- February Cigar Festival.
- May 1 – Labor Day.
- Last week of July – Carnaval in Santiago de Cuba.
- July 26 – National Revolution Day.
- September 8 –Virgen de Cobre Feast Day.
There is no indication of severance payment or redundancy payment of such kind, however according to article 52 of Labour Code, the worker, at the time of termination of the employment relationship, has the right to receive the salary for the work performed, the amount of the accumulated for annual paid vacations, as well as that corresponding to the provision of security social that had been perceiving. In the event of the worker’s death, this right is exercised by the relatives with the right to a social security pension or, failing that, by the heirs who prove such condition.