Employer of Record (EOR) in Dominican Republic

dominican republic

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Employer of Record in the Dominican Republic

Skuad's EOR (Employer of Record) solution helps your business expand into the Dominican Republic without the need for an entity setup. Our unified and automated global HR platform enables you to expedite the onboarding of your remote team and manage their payroll, benefits, and compliances, etc. We help you streamline the global expansion process with the able assistance of our international network.

Navigating the legal and employment landscape in the Dominican Republic can be challenging. With Skuad's innovative EOR solution, You can effectively address the HR requirements of your organization. If you wish to know how we can partner with you for your business growth and success, Contact Skuad today.

The Dominican Republic at a Glance

Population: 10 million

Currency: Dominican peso

Capital City: Santo Domingo

Languages Spoken: Spanish

GDP: 88941 million USD

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What You Must Know Before Employing in the Dominican Republic

The Ministry of Labor governs the employment laws in the Dominican Republic. Any employer willing to hire in the territory must strictly adhere to the laws. Foreigners working on Dominican soil are subject to the provisions of the Labor Code since Dominican labor laws are territorial (Principle V of the Labor Code).

Employers must be thorough with the local rules and compliance regarding working hours, compensation, leaves, social contribution, and more. The table below gives a sneak peek into the basic employee entitlements to keep in mind while employing in the Dominican Republic.

Entitlements Explanation
Statutory working hours Forty-four hours per week or eight hours per day
Overtime Eligibility
  • Overtime is allowed for three hours per day.
  • The overtime work counted for each hour after 9:00 pm.
  • The employee on overtime must get 36 hours of uninterrupted rest on weekends.
Paid Public Holidays The public holidays in the Dominican Republic for 2021 are as follows.
New Year's Day January 1
Three Kings' Day January 6
Day of the Virgin of Altagracia January 21
Birthdate of Juan Pablo Duarte January 24
Independence Day February 27
Good Friday Variable (March or April) April 2
Easter Sunday April 4
Corpus Christi Variable (May or June) June 3
Labor Day May 1
Restoration Day August 16
Day of the Virgin of Mercedes September 24
Constitution Day November 6
Christmas December 25
Vacations, Bereavement, and Other Leaves
  • Every employee is entitled to leave, according to Art. 54.
  • Five days leave must be sanctioned in case of marriage.
  • Three days’ leave is granted in the event of the death of a parent, offspring, grandparent, and spouse.
  • Minimum 14 working days of paid vacation leave is granted after one year of employment. It increases to 18 days after five years of employment.
  • Vacations cannot be replaced with any additional payment terms.
Medical Leave Employees receive no mandatory paid sick leave.
Maternity/Paternity Leave
  • Paid maternity leave of seven weeks before birth and seven weeks after.
  • Male employees receive two days of paternity leave.
  • Three rest periods of 20 minutes each per workday for breastfeeding are mandated.
Annual Leave Accrual Entitlement
  • Annual leave in the Dominican Republic is estimated according to the number of years and actual days worked per calendar year.
  • An employee receives a base of 14 days of paid annual leave for a six-day workweek.

Talk To Skuad Experts to know more about Employment laws rules in the Dominican Republic and how partnering with Skuad can simplify the employment process in the Dominican Republic.

Contractors vs. Full-Time Employees

Full-time Employees are those employees that are hired by your firm and work for specified hours. They receive a fixed salary and a company requires paying social and other benefits to the employees while managing their activities daily. A termination notice is a prerequisite in case an employer aims to end the working relationship with a full-time employee.

Contractors are freelancers who work on a freelance basis. They are paid project-basis and work as per the requirement of the project. The company does not require paying any benefit. Work can be terminated either at any time or by providing a short notice period.

Employment contracts in the Dominican Republic may be verbal or written. A contract exists unless proven otherwise by the employer. It is better to enter into written agreements for a clear and sound work relationship.

In the Dominican Republic, it is better to hire through contractors, because it is not worth the hassle of going through the direct route in this small country. The overall hiring process gets complex due to hiring and retaining the right employees which can be easily done when you have local support. Call Skuad experts to help you deal with full-time and contractual employment.

Hiring in the Dominican Republic

The employer can float out an advertisement for hiring and interview the candidates. The work starts from the probation period which gets transferred to full-time service.

Labor Law and other ministerial decisions govern hiring in the Dominican Republic. The majority of laws favor Dominican Republic nationals over other nationalities. When hiring from outside the Dominican Republic, you must ensure that the candidates are worthy of the job and no unemployed citizens can replace them. The foreigners applying for the job must have appropriate qualifications and professional competence to fill in the position.

Putting together written employment contracts and offer letters is among the most important initial steps of this employment relationship. It requires you to think about local employment laws, statutory demands, and country-specific standards.

Duties and Rights of the Employer in the Remote Working System

  • Employers can choose the working hours for remote working employees.
  • Employers hold the right to abolish the remote working system at any point in time if the employee breaks the rules and regulations.
  • Employers are required to hire competent employees who are qualified to take up the job remotely.
  • Employers are required to specify whether a particular job opening is suitable for remote working.
  • Employers are required to give fair treatment to both remote working and in-office employees.
  • Employers are required to provide any necessary tools and systems to employees to ensure ease in remote working.

Probation & Termination

There is a three-month probation period in which the employer can train and analyze the employee's performance. During the probation period, the employer or employee can terminate the contract without the necessity of any notice period. However, it is expected to give a 24 hours notice to the terminating party.

Termination of Service

The termination of service can happen with a notice period, as demonstrated below. For 'at will termination', the terminating party needs to give a notice period as below. For without cause termination, there needs to be severance pay given to the employee. The severance pay ranges from 6 days to 23 days salary based on the time employed.

Duration of the Employment Notice Period
Less than three months Seven days
Between three months to six months 14 days
12 months 28 days

EOR Solution in the Dominican Republic

Business expansion is a long-drawn process that calls for extensive planning, especially when expanding to a foreign country. It is complicated and can take up to several months to complete but by choosing the EOR route for hiring employees in the Dominican Republic, you can fast-track the expansion process. Employer of Record Dominican Republic (EOR) solutions by Skuad can make expansion to the Dominican Republic much simpler and a lot quicker for business. Our global outreach and a tech-enriched HR platform ensure compliance with local labor laws by managing employment responsibilities such as monthly payroll, work permits, employment contracts as well as taxation for your employees in the Dominican Republic. Book a demo with Skuad.

Outsourcing Employment Through an Employer of Record

Outsourcing is one of the easiest ways to enter the Dominican Republic market and get started with your business. Through an EOR you can legally hire employees in this country where all the hiring and payroll processes would be taken care of by professional EOR providers. You will give the guidance and the instruction of running the business which will be diligently carried by the local employees through your local EOR solution. Book a demo with Skuad today.

Types of Visas in the Dominican Republic

The process of fulfilling missions and moving employees from one nation to another is typically expensive, time-consuming, and complex. We'll support you through each phase of the visa process, from preparation and initiation to post-visa works. We'll also support the employee on the floor with workplace, office, and car leasing in addition to cultural and local language coaching.

Visa Category Explanation
Tourist Visa
  • Friends, the family can sponsor a visit visa; for non-
  • US citizens, there is a need for a tourist visa.
  • The initial period is for 30 days.
  • For US citizens, no visa is required for 30 days.
Business Visa For any business-related work, you need to apply for a business visa. Business visas can be applied for in the Ministry of Foreign Affairs, which grants you a visa after thorough checking of your documents.

Work Permits

You need to follow some processes to get your work permit in the Dominican Republic.

Can Skuad Sponsor Work Permit in the Dominican Republic? Yes
Processing time Five working days
Work permit process The process for a work permit is as follows:
  • Step 1: Skuad EOR submits an online application on your behalf at the Ministry of Labor online website.
  • Step 2: The employer submits all the required documents.
  • Step 3: The application is reviewed by the Ministry and may ask to resubmit any documents or make corrections if any.
  • Step 4: After the approval from the Ministry, the employer can download the permit from the website.
Work permit validity 30 days
When Can an Employee Travel to the Dominican Republic? When the employer issues an entry permit for the immigrant

Payrolls & Taxation

Running international payroll requires you to ensure that payroll deductions and taxation are locally compliant, which is hard even for a single nation and just grows in complexity in the countries you expand to. Employees have to be paid on time and in the appropriate currency. An EOR takes in your payroll tasks.

Following taxes are levied on personal and businesses:

Employer Taxation

Tax Explanation
Financial Year-end Date Selectable from 31 December, 31 March, 30 June, or 30 September
Tax Documents Tax documents applicable
Corporate Tax 28%
Withholding Tax (For Non-Residents) 10%
Payroll Tax No payroll tax is applicable.
Social Security and Statutory Contributions (Health insurance) 7.1%

Employee Taxation

Tax Explanation
Income tax Salaries higher than RD$20,000 are subject to income tax.
Tax Returns Tax filing as per criteria
Social Security and Statutory Contributions (health insurance) 2.87%

You can entrust Skuad with payroll & taxation management in the Dominican Republic. Book a Demo to know more.

Bonuses

Bonuses are frequent throughout the Christmas season, and are usually paid around December 20th and are equivalent to an extra month's wage. They are exempt from paying taxes.

A profit-sharing bonus of 10% of the company's net income is also available to employees. Those with less than three years of service are entitled to 45 days of pay, while those with more than three years are eligible to 60 days.

Incorporation: How to Set Up a Subsidiary in the Dominican Republic

You can establish a limited liability company (LLC) or Sociedad de Responsabilidad Limitada (S.R.L.) in the Dominican Republic. Alternatively, you can establish a simple limited company, a public limited company, a branch, or a representative office.

The steps of incorporating a subsidiary in the Dominican Republic are as follows:

  • You need to file a registration request with the Dominican Trademark Office to obtain a trading name for your company
  • You need to draft by-laws and other incorporation documents
  • You need to pay 1% incorporation taxes on the company’s registered capital
  • You need to prepare a business registration application and file it with your company incorporation documents
  • You need to file a request for a Tax Identification Number.

You can rely on Skuad to handle your expansion needs. Speak to our experts to know more about incorporating a subsidiary in the Dominican republic.

PEO

A professional employer organization (PEO) collaborates with medium-and small-sized organizations to provide HR services. A PEO handles various HR services such as recruitment, payroll, training, and other HR tasks. An EOR also provides similar HR services; however, the difference lies in the arrangement or association between the outsourcing company and the business.

A PEO acts as your co-employer, whereas an EOR service acts as the legal employer of your employees. The latter assumes all the responsibilities and liabilities of your remote team. You can outsource a specific HR function or end-to-end activities.

Further, an EOR service allows you to expand your workforce without setting up a business entity. It handles payroll funding, worker’s compensation, and unemployment claims and reports. It files taxes under its file ID number.

Skuad's EOR solution is a good way to expand your business in the Dominican Republic without setting up a separate entity. Our solutions help you to stay focused on your business and leave all business compliances, payroll processing and complete management work to us. Connect with Skuad to know more.

Conclusion

Expanding into the Dominican Republic is a fantastic choice for your business as it is one of the fastest-growing economies in the world. Skuad EOR is the perfect solution to your organization’s expansion plans. It works as a unified employment platform with automated workflows, digital signatures, employee payroll, contractor payout, and all types of compliance solutions. Book a demo with Skuad.

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