Employer of Record Jamaica
Skuad’s Employer of Record Jamaica (EOR) solutions make business expansion to Jamaica easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Jamaica, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more, Book a demo now.
Jamaica At A Glance
Population: 29.6 million
Currency: Jamaican Dollar (JMD)
Capital City: Kingston
Languages Spoken: English, Jamaican Patois
GDP growth: 0.7% (2019) (Source: World Bank)
Employment in Jamaica
Labor laws in the Commonwealth Caribbean, particularly Jamaica, have depended primarily on legislative efforts in industrial relations.
Jamaican labor regulations can be split into three categories:
- Employment legislation
- The law of labor relations
- The law on industrial safety
Employment law is mainly based on the common law idea of an employment contract. When an employee is made redundant or dismissed, the Employment (Termination and Redundancy) Payments Act (ETRP) 1974 (Jamaica) governs the separation payout.
The idea of voluntarism is central to industrial relations legislation. The Trade Union Act of 1919 (as modified in 1938) and the Labor Relations and Industrial Disputes Act of 1975 (LRIDA) establish a legal framework for recognition, industrial dispute settlement, and statutory arbitration.
The Factories Act of 1943 is a piece of industrial safety legislation. The provision is included in section 12 of this legislation. The basis for these regulations is provided by the Docks (Safety, Health, and Welfare) Regulations of 1968, as well as the Building Operations and Works of Engineering Construction Regulations of 1968.
To ensure compliance with Jamaican employment laws, Contact Skuad today.
Contractor Vs Full Time Employees
Independent contractors, such as consultants and freelancers, have long been a technique used by firms to save labor expenses or obtain more flexibility in dismissing people when they are no longer needed.
Some people like this type of arrangement because it gives them more control over their time and money.
Companies that hire consultants and freelancers, on the other hand, must ensure that they are adhering to local tax and labor regulations. With news of suspected under-compensation of security guards, the debate over this problem has lately resurfaced. Because people in both categories frequently work together, it's difficult to tell the difference between an independent contractor and an employee.
Regardless of the company's nomenclature, there are significant legal distinctions between being an independent contractor and being an employee, which imposes duties on both the employer and the employee. As a result, misclassifying freelancers and employees can result in non-compliance with tax and labor regulations, which can have significant consequences.
Employees have specific legal rights under local law, including paid leave (sick, vacation, and maternity leave), severance pay, overtime, and other compensation for working on rest days or public holidays.
Employees misclassified as independent contractors may be underpaid since these perks and rights are not typically available to independent contractors. In such cases, the employer can be held responsible for these payments retroactively; there could also be other legal consequences.
If in doubt, it is recommended to consult with a labor lawyer, a tax accountant, and/or the tax Administration of Jamaica to verify that the proper categorization and tax treatment are used.
Finally, organizations must be exceedingly cautious when categorizing their employees because this may have a big influence on employees, employers, and the economy. Contact Skuad to know more.
Hiring in Jamaica
The Foreign Nationals and Commonwealth Citizens (Employment) Act and the Caribbean Community Free Movement of Skilled Persons Act control the legal framework governing foreign employment in Jamaica. The Work Permit Section of the Ministry of Labor and Social Security in Jamaica is in charge of enforcing these Acts.
The presentation of an employment contract is the initial stage in recruiting Jamaican personnel. Your contract can be oral or written. However, an English-language written contract is preferred. Include salary, health care, termination, employment hours, and other comparable conditions and perks. It's also a good idea to make sure that any remuneration is mentioned in Jamaican Dollars.
The Recruiting of Workers Act in Jamaica lays forth the rules and procedures for hiring personnel. You can't, for example, hire someone under the age of 18. In addition, each of the employees you hire will be required to go before a judge and undergo a medical examination.
Some of the best online spaces to hire in Jamaica are:
- Caribbean Jobs Jamaica
- Jamaican Medium
- Jamaican Jobs Online
- Career Jamaica Jobs
- Splash Jamaica
- Go Jamaica Job Smart
Probation and Termination
Employment contracts may be canceled by the employer, the employee, or both parties by mutual consent after the contract period has concluded (if for a defined duration). Employees who have worked for at least four weeks must provide the employer two weeks' notice to cancel the contract.
Within the probation phase, an employer can cancel an employment contract without giving notice or paying severance. Probation must be mentioned in the job contract and cannot be more than three months. An employment contract cannot be canceled due to an employee's legal trade union rights being exercised.
For extreme misbehavior, an employer may terminate an employee without providing notice or severance compensation. Employee incompetence, fraud, and unethical behavior are all examples of misconduct.
Employers must provide workers notice before ending employment contracts outside of the probation period. All employees who have been employed for four weeks or longer are subject to the notice obligation.
The right to notice can be waived by an employee. Employers may also offer compensation in place of notice. The notice must be given either in writing or in the presence of a reliable witness.
Employer Of Record Solution
The Employers of Record (EOR) model is a smart solution for companies seeking to enter and expand in Jamaica fast and agilely. With the help of Skuad's Employer of Record solution, business entities abroad can quickly source and hire the right professionals as per the organization's requirements. Hired employees get onboard seamlessly, helping your business save up a huge percentage of hiring and onboarding costs. Skuad’s End-to-end solutions help manage employment contracts, process payroll and income tax, blend statutory benefits, and manage overall administration of the backend HR processes. Our platform works as a unified employment platform with automated workflows, digital signatures, employee payroll, contractor payout, and all types of compliance solutions. Book a demo today
Work Permits and Visas
A foreign citizen must first get a work permit to be able to work in Jamaica. A work permit allows a person to work in Jamaica for a set length of time and under certain conditions. Those seeking a work permit must submit an application to the Ministry of Labor and Social Security's Work Permit Department through their prospective employer, contractor, or legal representation.
On behalf of the employee, an application for a work permit can be filed through the potential employer or legal counsel. The employer must explain why he or she is seeking a work visa, as well as the efforts made to hire a Jamaican native. Evidence of qualification, a police record, a résumé, proof of Business Registration, a tax Compliance Certificate, copies of employee's passports displaying identity page as well as landing status and appropriate visas, two photos, and a completed and signed TRN Form are all required.
Work permit prices range from JA$27,000 for work permits valid for up to three (3) months to JA$81,000 for work permits valid for more than nine (9) months but less than one (1) year. The application fee is 14,400 Jamaican dollars. The employer must explain why he or she is seeking a work visa, as well as the efforts made to hire a Jamaican native. Evidence of qualification, a police record, a résumé, proof of Business Registration, a tax Compliance Certificate, copies of employee's passports displaying identity page as well as landing status and appropriate visas, two photos, and a completed and signed TRN Form are all required.
Some nations are excluded from Jamaica's visa requirement, and so, not everyone will need a visa. Citizens of the United States, Australia, Canada, and a few other countries currently do not require a visa to enter Jamaica and stay for up to 90 days. Depending on their place of origin, certain tourists may be allowed to stay for up to six months.
Payroll and Taxes
Salaries are paid either once a month or twice a month. Employers must deduct and pay the following contributions by the 14th day of the month following the month of deduction, in addition to the Pay-As-You-Earn (PAYE) Income Tax applicable to employees.
Contributions to the National Insurance Scheme (NIS)
Employees and self-employed people are required to be covered by a state-run social security insurance scheme. On a maximum compensation of JMD 1.5 million per year, employees and employers each contribute 3% (each). Self-employed people pay 6% of their annual earnings up to JMD 1.5 million in contributions. With effect from 1 April 2021, the income threshold for both employed and self-employed persons will increase to JMD 3 million per year, and with effect from 1 April 2022, to JMD 5 million per year. Contributions to the NIS are tax-deductible.
Contributions to the National Housing Trust (NHT)
In Jamaica, employers pay a 3% NHT while employees pay a 2% NHT on all taxable emoluments received from conducting business and employment, respectively. Self-employed people are likewise required to contribute 2% of their earnings. Employer contributions are tax-deductible, while employee contributions are not. After seven years, employee payments are reimbursed, but employer contributions are not.
When expatriate employees depart the island permanently, they can apply for a return of their payments.
Your legal ties with other businesses, as well as your relationship with the environment, are defined by your structure. As a result, personality, purpose, size, management, and legislative requirements must all be considered. A corporation and a firm are the two most fundamental structures in Jamaica. Most people opt to form a limited liability company (LLC) because it gives them a lot of flexibility while also protecting their parent firm.
The following are the stages involved in establishing a subsidiary in Jamaica:
- Complete all of the appropriate registration paperwork.
- Your company's name should be reserved and registered.
- The appointment of or change of directors must be reported to the Registrar of Companies.
- When you incorporate, notify the Registrar of Companies of your registered office address.
Since you may legally operate in the nation after completing the Jamaica subsidiary formation procedure, your firm will have an advantage over your competitors. Companies all over the world seek to form their subsidiaries as limited liability companies (LLCs) because it protects the parent firm from the subsidiary's acts, lawsuits, and fines.
If you wish to work in Jamaica immediately, subsidiary outsourcing with Skuad is the preferable alternative. You don't need to spend months, if not a year, understanding Jamaica's subsidiary rules and forming your own company. You may leverage our team's current infrastructure to run your business without having to worry about compliance issues. Learn more here.
Professional Employer Organization (PEO) vs. EOR
The organization's co-employer, a Professional Employer Organization (PEO), is utilized to hire the whole staff. It assumes all HR-related responsibilities and shares an organization's HR obligations and liabilities. It works for a firm with at least 5-10 employees and is registered in each country or state where its employees work.
By taking on a portion of the organization's duties, the Employer of Record functions as a legal employer. EOR can be used for a fraction of the workforce and can handle only a piece of the HR responsibilities. It allows firms to migrate to another state or country without forming a legal corporation. The Employment of Record firm is in charge of workers’ compensation and unemployment claims.
Employment standards and regulations become increasingly complex and diversified when a business grows and extends throughout different areas. When a firm joins forces with a PEO, it must create a legal presence in each state or nation where personnel are employed. However, if a corporation's EOR is established across many regions, the EOR permits the organization to lawfully employ individuals in those states.
As your PEO, we enable you to swiftly grow your operations in Jamaica without the hassle of dealing with payroll and benefits, risk mitigation, and compliance with our local laws and regulations; we will take care of all of that, as well as continuous employee assistance.
Skuad's EOR solution allows businesses to extend their operations. To learn more, contact us.
We recognize that local rules and regulations change often, making finding an up-to-date reference book difficult. Our expert staff researches and verifies Skuad's data to guarantee that it is up-to-date and correct.
When expanding into Jamaica, partnering with Skuad can significantly decrease the traditional brick and mortar processes of conducting business in international countries, allowing you to focus on what you do best: growing your brand! Please get in touch with us if you'd want to learn more about how Skuad can help you expand worldwide.