Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll services and hire new talent in the Dominican Republic.
Overview
The soil of the Dominican Republic is rich with history, with both the Spanish and French laying claim to the country right from the early 16th century until 1865, when the country finally declared independence. Christopher Colombus, after setting up his new world headquarters in the country, stated, "This is the most pleasant place on Earth."
Do your organization’s expansion plans require you to hire employees in the most pleasant place on earth? And do you lack a physical entity in the country – a key requisite to hiring local talent? Neeyamo assists organizations worldwide with onboarding and managing employees in the Dominican Republic - processing payroll, managing local compliance requirements, benefits, and more.
Facts And Stats
Capital
Santo Domingo
Currency
Dominican Peso (DOP)
Official Language
Spanish
Fiscal Year
1 January - 31 December
Date Format
DD/MM/YYYY
Country Calling Code
+1
Other Languages
English
Time Zone
UTC -04:00
Global Payroll
Overview
Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this is using outsourced payroll providers. Payroll processing companies like Neeyamo outsource payroll services around the globe to aid companies in maneuvering the tricky payroll system in the Dominican Republic. The advantages of outsourcing payroll services include handling global payroll for all your needs, including - employees working in primary geographies, the long-tail region, remote or internationally located.
Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll.
Payroll Taxes
Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.
Employee Taxes
The employee taxes in the Dominican Republic are computed as follows:
Employee Payroll Contributions
- 2.87% - Pension and Disability
- 3.04% - Health Insurance
- 0.50% - Technical Education (INFOTEP)
Employee Income Tax
| 0.00% | up to 416,220.00 DOP |
| 15.00% | 416,220.00 DOP - 624,329.00 DOP |
| 20.00% | 624,329.00 DOP - 867,123.00 DOP |
| 25.00% | 867,123.00 DOP and over |
Employer Taxes
The employer payroll contributions in the Dominican Republic are made as follows:
- 7.10% - Pension and Disability
- 7.09% - Health Insurance
- 1.20% - Labor Risk
- 1.00% - Instituto Nacional de Formacion Tecnico Profesional (INFOTEP)
Payroll Cycle
Overview
Undoubtedly, payroll is a critical process for any organization. The pay cycle in the Dominican Republic refers to the period an organization pays its employees, which can vary depending on the pay frequency the organization chooses to adopt.
Frequency
The payroll cycle in the Dominican Republic is either bi-weekly or monthly.
13th Month Cycle
In the Dominican Republic, the 13th-month cycle is followed by either providing a 13th salary or a Christmas bonus.
Global Work
Overview
An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account prior to making a job offer to an international hire.
An Employer of Record (EOR) service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.
This allows organizations to focus on collaborating with the employees in the Dominican Republic for operational tasks, with the knowledge that they have a cost-effective solution to support their global business payroll & HR requirements as they continue their global expansion.
HR Mandates and Practices
Minimum Wage
Increase in minimum wages from 1 April 2023:
- For employees in large companies (more than 151 employees) - DOP 24,150
- For employees in medium companies (51 to 151 employees) - DOP 22,138
- For employees in small companies (11 to 50 employees) - DOP 14,835
- For employees in microenterprises (up to 10 employees) - DOP 13,685
The minimum wage will increase by 4% on February 1, 2024.
With effect from June 1, 2023, minimum wages for workers in large tourism-related businesses will rise from the current 14,000 pesos to 16,100 pesos.
Overtime
In the Dominican Republic, the daily work time is eight 8 hours, and the weekly work time cannot be longer than 44 hours.
The usual workdays are from Monday to Friday, plus a half-day on Saturday.
According to Article 203 of the Labour Code, the employer must pay each hour beyond the allotted 44 per week at 135 % of the standard hourly rate.
According to Article 204 of the Labour Code, the employer must pay each hour above 68 per week at a rate of 200 % of the regular hourly salary. The rate of pay for night shifts is increased by 15%.
Except for firm directors, managers, and those in trust positions, all employees are entitled to overtime compensation.
Data Retention Policy
Generally, tax records in the Dominican Republic must be kept for a minimum of 10 years. Employers must maintain a record of all income tax-related transactions.
Hiring and Onboarding Requirements
Hiring
The Labour Code allows for the employment of foreigners in the Dominican Republic.
Apart from this limitation, foreign employers and employees receive the same treatment as Dominicans since their immigration status cannot be grounds for discrimination. However, under Dominican immigration law, employers who hire illegal immigrants can be penalized.
The employer cannot fulfill its obligation to contribute to the Dominican Social Security System on behalf of employees with immigration difficulties since the system requires the correct identification of workers through a legally obtained identity card.
Onboarding
The following compulsory documents are required when onboarding an employee in the Dominican Republic:
- National Id
- Passport (if foreigner)
- Bank details/ bank book
In terms of personal details, the following are required:
- Name
- Date of Birth
- Place of birth
- Identification Number
- Address Telephone Number
Probation
In the Dominican Republic, there is no specific trial period, but the contract can be terminated during the first 3 months of employment without imposing any obligations on the employer.
Leave
Public Holidays
According to Law 13-97, holidays change depending on the day they fall.
The Dominican Republic recognizes 12 public holidays:
- January 1: New Year's Day
- January 6: Day of the Kings
- January 21: Dia de Nuestra Senora de La Altagracia
- January 26: Birthday of Juan Pablo Duarte
- February 27: Independence Day
- Good Friday
- May 1: Labor Day
- Corpus Christi
- August 16: Day of Restoration
- September 24: Dia de Las Mercedes
- November 6: Constitution Day
- December 25: Christmas Day
Sick Leave
If the sickness absence is longer than four days, the Social Security Treasury will pay the employee a portion of the employee's payment.
According to Article 52 of the Labour Code, in the event of sickness, the employee is entitled to medical care and the benefits of the legislation related to workplace accidents and Social Security.
All employees are entitled to up to 26 weeks of sick leave paid by social security.
Maternity Leave
The legislation stipulates the mother's entitlement to paid leave for the 7 weeks before the anticipated due date and the 7 weeks that follow.
According to Article 240, the employee is entitled to three 20-minute breaks each working day to breastfeed her infant.
Employers must grant all pregnant employees 12 weeks of paid maternity leave, with six weeks of leave granted before the employees' due dates and six weeks of leave after the employee gives birth. This benefit is paid by Social Security directly to employees.
Paternity Leave
According to Article 54 of the Labour Code, a male employee is entitled to two days of pay upon the birth of his child.
Other Leave
Employees receive paid leave for:
- Marriage: 5 days
- Bereavement Leave: 3 days
Termination
Notice Period
The length of notice period depends on the employee’s seniority:
- Up to 6 months of employment: 7 days’ notice
- 6 months-1 year of employment: 14 days’ notice
- Over 1 year of employment: 28 days’ notice
Severance Pay
The severance pay for employees in the Dominican Republic is as follows:
- 3 - 6 months, with at least 7 days advance notice and compensation equal to 6 days of regular pay.
- 6 months - 1 year, with at least 14 days advance notice and compensation equal to 13 days of regular pay.
- 1 - 5 years, with at least 28 days advance notice and compensation equal to 21 days of regular pay.
- 5 years and more, compensation equal to 23 days of regular pay.
Visa
Overview
To work legally in the Dominican Republic, employees must have:
- a temporary work permit and visa,
- a temporary residency card,
- a permanent residence card or a definitive residency card.
Temporary Work Permit and Visa
To obtain a temporary work permit for an employee, employers must first get a formal job offer letter approved by the Ministry of Labor. After getting the job offer letter approved, employers must then apply with the General Directorate of Immigration (Dirección General de Migración, abbreviated as DGM) for an Authorization for the Entrance of a Contingent form.
After obtaining authorization from DGM, the foreign worker must apply for a Temporary Worker Visa (Visa de Trabajador Temporero, abbreviated as VTT) with their local Dominican consulate.
Temporary Residency Card
After the worker arrives in the Dominican Republic, employers must register the worker with Labor Contract Register at the Ministry of Labor and coordinate to give a medical examination to the worker with DGM. To obtain a temporary residency, foreign workers must apply with DGM after having obtained a labor contract that has been certified by the Ministry of Labor and a resident visa or a visa for multiple businesses from the foreign worker's local Dominican consulate.
Spanish citizens have a separate application process for a temporary residency. To apply for permanent residency, foreign workers must reside in the Dominican Republic and apply with DGM.
The following criteria must be met to obtain a temporary residence permit for work:
- Submit to a medical exam approved by the General Directorate of Migration, which requires the interested party to bring the following identification:
- two copies of a valid passport;
- a copy of a temporary resident visa issued by the Dominican Consulate in the applicant's country of origin.
- Two copies of the passport photo.
- A copy of the admission via the immigration control post and two copies of the Resident or Work Visa (NM1) issued by the Ministry of Foreign Affairs through the Dominican Consulate in the applicant's place of origin or residency.
- An application for temporary residency that has been properly filled out by the foreign applicant, whose signature and fingerprints will be taken before an immigration official.
- A birth certificate that has been properly legalized or apostilled, and if it is in another language, translated into Spanish.
Definitve Residency Card
To obtain a definitive residency, foreign workers must prove that they are economically solvent, have a residency card, and apply with DGM. Foreign workers wishing to obtain a definitive residency must have resided in the Dominican Republic as permanent residents for the last 10 years.
Employee Background Checks
Legal and Background Checks
In the Dominican Republic, an employer cannot conduct a criminal background check on a candidate, either directly or through a vendor. Only the candidate can obtain the criminal record and then provide it to the employer. The criminal record shows if the applicant has been convicted of a felony.
Under the current labor laws, it is forbidden to carry out medical examinations to determine if a candidate is pregnant or has HIV.
Last updated on January 19, 2024
If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com
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