The Dominican Republic has a thriving and constantly rising economy and a diversified and active labor force. It is essential to comprehend the Dominican Republic’s employment legislation and labor regulations, whether one is an employer or an employee. These regulations address vital concerns, including minimum wage and working hours, employee benefits, and workplace safety.
However, the Dominican Republic’s labor laws moderate every employment aspect. International employers looking to leverage the advantages of the country must comply with the labor regulations in the Dominican Republic. Keep reading to learn the most crucial aspects of the labor code in the Dominican Republic.
Applicability of the Act
The Dominican Republic labor law provides strong and inflexible protection of employee rights. Labor relationships in the Dominican Republic are governed by Law No. 16-92 of May 29, 1992, commonly known as the Labor Code. The labor code in the Dominican Republic protects all the residents in an employment contract. Foreign and technical employees at a management level are excluded from this provision.
Per the Dominican Republic labor laws, there are three main types of employment contracts: unlimited time, limited time, and pre-determined work or service agreements. The most frequent type of contract is the indefinite period employment contract, which only ends based on a mutual agreement between both parties. Furthermore, there are certain circumstances when one of the parties has the right to act unilaterally. Here are a few notable highlights to keep in mind:
- Employment contracts of foreign workers must be in writing and registered with the Ministry of Labor.
- The employee must hold a valid work visa or be a legal resident allowed to work in the Dominican Republic.
- The Dominican Republic has three commonly used contract types, with indefinite-period employment contracts being the most common.
- Employment contracts must include essential terms such as names, surnames, nationality, age, sex, marital status, full addresses, and the parties’ identification numbers.
- Companies relocating employees to the Dominican Republic must obtain a temporary residency for work purposes or a short-stay permit.
- Labor relationships in the Dominican Republic govern employee rights.
Key Provisions of the Act
Article 62 of the Dominican Constitution regulates the right to work, stating that work is a right, a duty, and a social function exercised with the State’s protection and assistance.
Some key provisions of the labor code in the Dominican Republic are as follows.
The Dominican Republic’s working hours law limits the maximum number of hours any employee can work in a week, which is 44 hours. Full-time employees receive a weekly rest period of at least 36 consecutive hours.
- According to the labor code in the Dominican Republic, any work done after completing a 44-hour weekly shift is overtime.
- There are specific slabs for overtime and night work, as follows.
|Type of Work||Compensation|
|Overtime work more than 44 hours per week||135% of the normal hourly wage|
|Overtime work more than 68 hours per week||200% of the normal hourly wage|
|Night shift work||Normal hourly wage + 15% premium|
There are 13 public holidays per the labor regulations in the Dominican Republic. These holidays are as follows.
|New Year’s Day||1st January|
|New Year Holiday||2nd January|
|Epiphany Holiday||9th January|
|Lady of Altagracia||21st January|
|Duarte Day||30th January|
|Independance Day||27th February|
|Good Friday||7th April|
|Labor Day||1 May|
|Corpus Chisti||8th June|
|Restoration Day||16th August|
|Our Lady of Mercedes Day||24th September|
|Constitution Day||6th November|
|Christmas Day||25th December|
- Per the Dominican Republic labor laws, employees receive to paid vacation time based on their length of service.
- After one year of continuous full-time employment, employees receive 14 days of annual leave (PTO) per year, which can increase up to 18 days after five years of service.
- Employees who have worked for less than a year are entitled to one day of paid vacation for every 11 days worked.
- While those who have worked for more than a year are entitled to one day of paid vacation for every 8.33 days worked.
- Female employees receive 14 weeks of paid maternity leave from the Dominican Republic, which the employee can take before or after giving birth.
- The employer must pay the employee’s salary during the maternity leave period.
- There is no shared paternity leave in the Dominican Republic.
- The Dominican Republic labor law enforces a three-day bereavement leave for employees.
- The leave applies when losing a parent, child, partner, or other dependent.
- The act provides paid sick leave for employees who cannot work due to illness or injury.
- Employees receive 30 days of paid sick leave per year, per the labor code in the Dominican Republic.
The labor code in the Dominican Republic establishes a minimum wage that employers must pay to their employees. The applicable minimum wage as of 2023 is DOP 8,310 for businesses in the free-trade zone(FTZ). The applicable wage outside an FTZ administration ranges from DOP 7,843 to 12,873.
Payroll tax and employer registration
The payroll tax for an employer is 16.39%, while for an employee, it is 6.41%. A comprehensive breakdown is as follows.
|Scheme||Employer contribution||Employee contribution|
|Disability and pension||2.87%||7.10%|
|Instituto Nacional de Formación Técnico Profesional (INFOTEP)||1%||0.5%|
The Dominican Republic labor laws have no provisions that require the need to provide payslips to employees. However, we recommend employers provide a payslip with the following information.
- Employee name
- Gross pay
- Benefits, where applicable
- Taxes and deductions
- Remuneration date
According to the Dominican Republic labor laws, employers can enforce a three-month probation period for their recruits.
The labor code in the Dominican Republic termination has four steps:
- The first is “desahucio,” an at-will termination where either party can terminate the contract without specifying a cause. However, the party terminating the contract must give advance notice to the other party.
- Second is dismissal, which the employer exercises with cause.
- The third is resignation with cause, which the employee exercises.
- The fourth is a mutual agreement between the employer and employee or under circumstances when one of the parties has the right to act unilaterally.
- During the employment law in the Dominican Republic termination, employers must give at least 28 days’ notice before terminating an employee.
The labor act rules in the Dominican Republic provide severance pay for employees who are terminated without cause. The severance amount is payable on the length of service and the employee’s salary. Employers who use their right to fire their workers without cause must give the following severance payments to the terminated employee:
|Length of Employment||Severance Pay|
|3 to 6 months||6 days’ salary|
|More than 6 months to 1 year||13 days’ salary|
|More than 1 year to 5 years||21 days’ salary per year of employment|
|More than 5 years||23 days’ salary per year of employment|
Businesses in the Dominican Republic are required to obey strict employment rules. Non-compliance with the Dominican Republic labor laws might lead to fines, license suspension, or imprisonment. Some of the most common non-compliance are as follows.
- Harassment and discrimination in the workplace based on race, gender, religion, national origin, disability, or any other characteristic protected by law
- Suppose the employer retains foreign employees not authorized to work in the Dominican Republic. In that case, the employer can be subject to a fine, and the employee can be deported to their country of origin.
- If an employer fails to pay the appropriate overtime compensation, the employee may be entitled to missed earnings, interest, and a penalty.
Compliance Strategies for Employers
The Dominican Republic labor law issues a reform by integrating invoice management into a broader, more comprehensive, risk-based compliance strategy to enhance tax compliance.
The reform led to significant and persistent improvements in filing, payment, and information reporting obligations and a modest increase in reported tax liabilities. It introduced risk-based rationing of invoices and evaluated its impact on VAT and income tax compliance.
Employers looking to comply with the Dominican Republic’s labor laws can adopt several compliance strategies to adhere to the country’s employment, data protection, and tax regulations. Some of these strategies include
- Maintain correct personnel data records and verify that data collection or processing conforms with Data Protection Law.
- Ensure all workers enroll with the social security system and their payments are paid regularly.
- Review and update their employment contracts regularly to comply with recent legislation.
- Ensure that all personnel is legally permitted to work in the Dominican Republic and keep records of their work licenses and visas.
- Implement internal rules and processes to guarantee compliance with relevant laws and regulations, including anti-discrimination, health and safety, and data protection policies.
- Conduct frequent audits to ensure compliance with all relevant requirements and to identify any areas of non-compliance that require attention.
- Obtain a tax identification number by registering with the local tax authority.
- Companies must provide the necessary training to their employees.
- Companies can partner with a third-party HR agency.
- Such agencies help a company comply with the labor regulations in the Dominican Republic.
- Companies with a moderate budget can partner up with a third-party agency.
Employer of Record (EOR)
- EOR is a compliance solution that allows companies to comply with the labor act rules in the Dominican Republic without an HR.
- It is currently the most cost-effective compliance strategy.
- In some cases, companies can negate the requirement of registering a legal entity in a foreign country.
How Multiplier Can Help Businesses Stay Compliant?
Multiplier offers a comprehensive solution for multinational workforces that automates payroll, benefits, compliance, and labor law compliance in more than 150 countries. Multiplier is an Employer of Record (EOR) platform that enables businesses to interact with international employees in a new country legally and effectively without establishing a local corporation. Businesses can operate as legal employers for their employees, allowing them to comply with all Dominican Republic labor laws.