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Employer of Record in the Virgin Islands

Employer of Record in the Virgin Islands

The HR processes in the Virgin Islands entails understanding the nitty-gritty of the Virgin Islands’ labor laws thoroughly. The workplace laws protect the employees and workers, ensuring a fair wage, working hours, safety from discrimination and sexual harassment. The laws could be much different from those in your home country and thus, consume a lot of time and resources to traverse the HR landscape here. That is why it is advisable to hire experts who are well-versed with the employment laws here and take care of the legalities, through and through.

Skuad is one of the topmost Employers of Record in the Virgin Islands with a world-class and innovative solution that has seamlessly helped innumerable foreign entities work and conduct business in the archipelago. With us as your HR partner, you can focus on the core areas of your business stress-free while we take care of the payroll, taxation, administrative tasks, and labor law compliances.

Contact us to find out more details about how we can add value to your global expansion plans in the Virgin Islands. Our Skuad experts will help you through the process.

The Virgin Islands at a Glance

Estimated Population: 147,778 in the US Virgin Islands, 11,110 in the Spanish Virgin Islands, and 31,758 in the British Virgin Islands.

Currency: United States Dollar (USD)

Capital: Road Town for the British Virgin Islands and Charlotte Amalie for the US Virgin Islands

Languages frequently used: English, Spanish, and Creole.

GDP:  USD 500 million (2017 estimate)

Employment In the Virgin Islands

Expanding into the Virgin Islands means that you need to hire people to work for your firm. Things can be challenging and tough because of geographical, economical, and political influences. At all costs, you need to ensure that your firm employs workers, local or foreigners, in adherence to the local labor laws.

Aiding you with your expansion plans is Skuad that works as your Employer of Record in the Virgin Islands. We are experts in hiring and employment in the Virgin Islands. It would be a pleasure to let you know more about our distinct EOR services. Book a demo with us today to know more.

Virgin Islands employment laws (US)

Virgin Islands labor laws
  • It is mandatory for businesses in VI to hire resident labor before hiring non-resident labor, especially if skilled labor is available on the island.
  • In case of a lack of skilled workers, non-resident workers can be employed
VIESA (VI Employment Security Agency)
  • It is an organization that assists employers and employees in establishing employment relationships in VI.
  • The agency is responsible for matching demand for local workers with the labor supply.
  • It also offers training, placement services, counseling, and information to both parties regarding the job market in VI.
  • It also assists veterans, youths with disabilities, and disabled workers with special services.
Wage Laws and Hours Laws
  • Employers must follow the US Federal employment laws.
  • Hours, wages, occupational health, and safety follow the US labor laws.
    1. The Fair Labor Standards Law (FLSL) is the same as the US Federal laws. It has Coverage, Minimum Pay, Overtime pay, Record Keeping, and Youth Employment.
    2. The FLSA applies only when there is an employer-employee employment relationship.
    3. The Local Law, Title 24 VIC, has a special clause for employers engaged in the tourist and restaurant industry. As per the law, employers can have their employees work for six days consecutively only if the total number of work hours is 40 in the week.
    4. Managers and senior positions are not under the purview of the Fair Labor Standards Act.
Coverage of Fair Labor Standards Law (FLSL) Two coverage types apply
  • Enterprise Coverage – when an enterprise is covered, all employees working in the enterprise get coverage.
  • Individual coverage – in certain cases, individual employees are covered even though the enterprise is not covered.
Minimum Wage Rate
  • The minimum wage rate in US VI is $10.50 per hour.
  • Employees working beyond eight hours each and exceeding forty hours in a week need to be paid 1.5 times the standard hourly rate.
Tipped Wages The law states that employees who work in a tips-based format need to get a minimum of USD 4.20 per hour as direct wages and at least USD 10.50 on an hourly basis (wages & tips)
Illegal deductions There is a special clause that mentions that the employer does not permit illegal deductions. These include deductions for tools, cash register shortages, etc. dies, the paternity leave can be extended.
Meal and Rest Period
  • Some employees will mandatorily receive meals and rest periods. Employees have the right to forgo the rest or meal period voluntarily.
  • All violations of the meal and rest period are required to be mandatorily filed with the Department of Labor.
Employee Discrimination
  • All kinds of discrimination of employees, be it in the hiring process, termination, promotions, is prohibited.
  • Discrimination on the grounds of sex, religion, caste, age, color, handicap, or ancestry is illegal
Sexual Harassment
  • No kind of sex discrimination is permitted.
  • Any violation of Title VII, Civil Rights Act, 1964 is not permitted. This law applies to employers with a minimum of 15 employees.
  • For organizations employing two or more employees, Title 24, Chapter 17 applies.
  • Sexual harassment includes but is not limited to unwelcome advances, asking for sexual favors, physical or verbal sexual conduct, or more.
Child Labor Laws
  • When children between the age of 13 years and 18 years are employed, a child labor certificate needs to be obtained from the Labor Relations Division.
  • Kids aged between 14 to 15 years cannot be employed between 0700 and 1900 hours in a school year. They also cannot be employed for more than three hours during school days and for more than 18 hours during a school week.
  • Minors also cannot work in hazardous occupations.
  • They cannot be involved in heavy construction work, in preparing alcoholic beverages, in bottling plants, in power generating plants, in steam laundries, quarry, woodworking machines, spray paint, hazardous chemicals, metal forming, power-driven operations, and punching and shearing of machines.
Public Holidays
  1. New Year's Day – 1st January
  2. Three Kings Day – 6th January
  3. Martin Luther King Jr. Day – the third Monday in January.
  4. Transfer Day – 31st March
  5. Holy Thursday – the Thursday before Easter
  6. Holy Friday – the Friday before Easter
  7. Easter Monday – the Monday after Easter
  8. Memorial Day – the last Monday in May
  9. Emancipation Day – 3rd July
  10. American Independence Day – 4th July
  11. Hurricane Supplication Day – the fourth Monday in July
  12. Labor Day – the first Monday in September.
  13. Columbus Day – the second Monday in October
  14. Hurricane Thanksgiving – 25th October
  15. Halloween – 31st October
  16. Liberty Day – 1st November
  17. Veterans Day – 11th November
  18. Thanksgiving Day – the fourth Thursday in November
  19. 25th December – Christmas Day
  20. 26th December – Christmas Second day
  21. 31st December – New Year's Eve
Annual Leaves Clerical and administrative staff are eligible for 26 days of annual leave each calendar year.
Sick Leaves Up to 2 weeks of paid sick leaves.

The Family and Medical Leave Act (FMLA)

Purpose
  • To help employees balance their work and family life.
  • Ensuring economic security and integrity of families
Coverage
  • Employers working in the private sector with a minimum of 50 or more employees
  • All public agencies, private and public schools (elementary and secondary)
Which employees are eligible
  • Workers who have worked for 12 months minimum
  • Have spent a minimum of 1,250 hours during these 12 months
  • Have worked in a site with 50 employees working within 75 miles
Qualifying reasons Eligible employees can apply for FMLA leaves:
  • During the birth of a child
  • During the adoption of a child
  • To take care of a parent, child, or spouse
  • During severe health conditions

Contractors vs. Full-time Employees

As per the FLSA and the employment contract in the Virgin Islands, a full-time employee is entitled to minimum wages and overtime pay. There are big differences between full-time employees and independent contractors. However, the FLSA does not cover contractors – there is no employment agreement in the Virgin Islands with an independent contractor. The interpretation is that contractors are not paid at the rate of 1.5 times the standard pay for overtime. That is why employers may tend to classify employees as independent contractors to avoid paying overtime pay. Also, employers need to statutorily pay social security, medicare, workers compensation, and unemployment taxes for employees under employment contract law Virgin Islands. In the case of independent contractors, the contractors are responsible for income tax and even self-employment taxes.

Therefore, as a new business entity or employer in the Virgin Islands, you need to make a crucial call about hiring employees vis-à-vis contractors. There are pros and cons of hiring both types for your business – with employees, there is greater control over timing and performance, while in the case of contractors, the monetary aspects are better. That is why a professional EOR service provider like Skuad ensures that you do not have to get involved in such legal interpretations because we do it for you. Book a demo with us to know more.

Hiring in the Virgin Islands

To hire employees in the Virgin Islands, it is statutory for employers to adhere to FSLA. As a new business entity, you have varied choices. You can establish your business entity on the island as per the corporate laws and then advertise job vacancies and posts. You can hire hiring companies in the Virgin Islands, which will help you with interviewing, shortlisting, and hiring employees on the island. You can also use online resources or job portals like www.simplyhired.com, www.jobisite.com, www.islandjobs.net, www.visahunter.com, and www.governmentjobs.com to find the right talent residing in the Virgin Islands.

You also have the choice to appoint Skuad as your EOR or PEO so that you do not have to indulge your time, money, and resources to traverse the complicated HR domain in the archipelago. Our experts take care of hiring, admin tasks, employee health benefits in the Virgin Islands, payroll and taxation, and local compliances. Therefore, you can focus on other essential permits and tasks to start your business operations in the Virgin Islands.

Probation & Termination

Standard probation period the Virgin Islands Employees in the Virgin Islands need to go through 90 days of the probationary period in Virgin Islands. The employer establishes the period to evaluate a new employee.
Termination of employment Virgin Islands
  • The 'at-will clause of the Virgin Islands Wrongful Discharge Act determines termination of employment relations.
  • An employer can dismiss any employee on certain grounds like:
    1. Acting in conflict with the said duties with the employer.
    2. Offensive conduct towards others
    3. Using intoxicants or controlled substances during duty hours.
    4. Intentionally disobeys rules and regulations set by the employer.
    5. Neglects his work
    6. If he is continuously absent from work.
    7. He is proven to be incompetent or dishonest.
    8. When other employees are reluctant to work with the said employees.

EOR Solution

An Employer of Record in The Virgin Islands is a business entity registered in the island with its core expertise in HR and administrative support services. It effectively means that if you hire an EOR for your HR functions, you can operate your business on the island without establishing your legal identity in the Virgin Islands.

Leading employer of record companies in the Virgin Islands offers end-to-end HR services to new businesses. An Employer of Record EOR like Skuad offers high-tech centralized HR solutions that take care of your payroll for local and foreign employees, compensation, employee benefits like social security, taxation, and legal compliances.

SKuad is an experienced employer of record service providers that have proven to be a big resource to new businesses venturing into unknown and new territories. Our solutions are compliant with all the statutory employer requirements, not to have to face any last-minute hassles or legal issues.

Give us a call today to speak to Skuad experts.

Types Of Visas In Virgin Islands

To work in the Virgin Islands, it is mandatory to have the Virgin Islands work visa. People from Canada, Australia, and many European countries do not require a non-immigrant visa to work and stay in the Virgin Islands. They need to obtain prior authorization under the ESTA program. The ESTA (the US Electronic System for Travel Authorization) visa is the only type of work visa that should be applied for a minimum of 72 hours before travel. Once approved, the visa is valid for two years.

The specific Virgin Islands work visa requirements require the employer to apply for the work permit after the visa is obtained. Learn more about Skuad solutions that encompass providing Visa assistance for your business requirements.

Work Permits

Foreigners can only work in The Virgin Islands when they have obtained a work permit in the Virgin Islands. The process is as below:

-        The employer needs to complete the application for obtaining a Virgin Islands work permit for foreigners

-        It needs to be submitted to the Labour Department.

-        Supporting documents need to be submitted too. These include a passport-sized photo, cover letter, job description, two newspaper ads, valid trade license, reasons that need to be mentioned why natives are not being hired, copies of the applicant's qualification, and a letter from immigration.

Employees need to remember that it is impossible to get to the Virgin Islands to work without job offers. Contact us to know more about the procedure of work permits in the Virgin Islands.

Payroll & Taxes in the Virgin Islands

Virgin Islands employer payroll taxes
  • The tax returns need to be submitted by the 21st of the same month.
  • Taxes are levied on independent contractors and employees.
  • The tax returns need to be submitted by the 21st of the same month.
  • Employers are classified as Class 1 or Class 2 employers. Class 1 employers do not have payroll beyond USD 150,000 in a year, have an annual turnover of not more than USD 300,000, and the number of employees should not be more than seven.
Virgin Islands payroll tax rates
Employer Class Tax Rate Employee Employer
Class 1 Employer 10% 8% 2%
Class 2 Employer 14% 8% 6%

Payroll outsourcing to the Virgin Islands is the ideal way to work stress-free and seamlessly, completely focused on the core expertise of your business without worrying about the HR functionalities. Skuad is your one-stop solution provider for all your HR-related requirements.

Incorporation

Incorporating a holding company in the Virgin Islands is governed by the Uniform Limited Liability Company Act of 1998. Types of Corporations that possible in the Virgin Islands include:

-        Domestic Corporations are businesses in the Virgin Islands based out of this place.

-        Offshore corporations or holding companies, or exempt companies need to meet certain requirements to operate in the Virgin Islands. Natives cannot own more than a 10% share in such companies.

-        Foreign Sales Corporations are established under the laws of the land of a qualifying foreign country.

Owing to the various business opportunities in the Virgin Islands, it is the right decision to expand your business in the Virgin Islands. There are various incentives that foreign companies get to enjoy – for example, Economic Development Commission Tax incentives.  The requirements of incorporation in the Virgin Islands include – three incorporators who will elect the company's directors. Also, it is mandatory to have three officers, of which the first officer is the President, the second is the secretary, and the third is the treasurer.

The process of incorporating a company in the Virgin Islands is not an easy task. You need to understand the corporate laws diligently. With Skuad, you do not need to incorporate your business in the islands – we handle all your HR-related tasks seamlessly to remain focused on your business expansion goals. Know more!

Professional Employer Organization (PEO)

A PEO or a  professional employer organization Virgin Islands works with the employer as a part of a joint-employment relationship. The service provider typically leases employees to the employer. Thus, PEOs share employee-related liabilities, thereby allowing employers to outsource their HR-related functions to the PEO. The Professional Employer Organization handles all aspects related to payroll, compensation, benefits, administration, compensation, and taxation.  They work as professional employers on behalf of the employer who is their client. So, the client or the original employer ensures compliance and taxation as per the federal employer identification number of the PEO.

EOR service providers, on the other hand, are employers of record in the Virgin Islands who have their separate legal identity on the island. They, too, manage the entire HR functionalities on behalf of their clients, the original employer. However, with an EOR, businesses are not required to register their legal identity in the Virgin Islands

Skuad is an ideal partner as your EOR or PEO service provider because we are among the leading service providers in the HR domain across all parts of the world. Our services encompass multidimensional and multifaceted services related to legal and HR compliances in the Virgin Islands. Book a demo to know more about Skuad’s EOR.

Conclusion

The Virgin Islands has hundreds of opportunities for foreign companies. If you plan to take your business to this island country, it is time to speak to Skuad experts. We are the best in the industry – we can help you understand our complete range of services. Please book a demo today to let you know more about our PEO and EOR services. Call us to make informed business decisions for your company.

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