The robust economic growth of the Dominican Republic in the last 25 years makes it a lucrative business destination for companies wishing to expand their ventures in Central America. With a GDP of $94.2 billion in 2021, it is the tenth-largest economy in Latin America open for commercial trade.
The country’s greatest economic asset is its 4.9 million strong working population. The easy accessibility of a hard-working, skilled, and trainable workforce makes the Dominican Republic an investor’s haven. In addition, employment affordability and the above fact drives businesses and brings employers to hire employees in the Dominican Republic.
Employee recruitment and selection in the Dominican Republic is quite an easy process. However, with certain regulations, recruiting Dominican Republic workers can sometimes get cumbersome. Companies hiring foreigners in the Dominican Republic must comply with the laws dictating the employment of foreigners. Obtaining the relevant work permit is the starting point for legally starting recruitment and selection in the Dominican Republic.
Read the article for a detailed guide on how to hire people in the Dominican Republic.
Things to Know Before Hiring in the Dominican Republic
Familiarizing yourself with foreign laws and rules is imperative for businesses looking to expand overseas. The process can prove to be confusing and complex. To hire staff in the Dominican Republic, companies must follow the rules and regulations in recruitment and selection in the Dominican Republic:
- The Labor Code or Law No. 16-92 and Decree No. 258-92, i.e., Regulation for the Application of the Labour Code, primarily regulate labor relations in the Dominican Republic.
- The Labor Code of the Dominican Republic is pro-employee, meaning all labor laws seek to safeguard the employee’s rights.
- Regulation No. 522-06 covers rules and regulations on maintaining hygiene and safety at all workplaces within the country’s territory.
- The Dominican Republic Labor Code stipulates that a company must employ Dominican Republic workers, amounting to 80% of a company’s workforce, except at managerial levels.
- Both local and foreign employers enjoy the same rights and benefits under Law 479.
- The Dominican Social Security System, established under Law 87-01, regulates and develops the reciprocal rights of citizens and the state. It covers finances protecting the population against risks of unemployment due to advanced age, illness, survival, maternity, and occupational hazards.
- The Immigration Department (Dirección General de Migración) regulates laws relating to residence rights.
Before you initiate recruitment and selection in the Dominican Republic, take note of the crucial factors employers must consider.
Companies wondering how to hire people in the Dominican Republic must first look for work permits. Acquiring a work permit is mandatory for foreign nationals intending to work in this Latin American country. The General Directorate of Migration of the Dominican Republic states foreign workers entering the country with an employment contract endorsed by a company legally constituted in the country must obtain a non-resident permit.
The work permit applies for one year and can be renewed for one more year if proof of the extension or renewal of the employment contract is provided. Individuals traveling for a short period on work purposes to the Dominican Republic can apply for a Visa de Negocios or business visa, allowing them to stay in the country for two months at a stretch.
Employers can conduct recruitment and selection in the Dominican Republic without a written employment contract. The labor code governs the employment contracts required to hire Dominican Republic workers. It is advisable to draft contracts before conducting recruitment and selection in the Dominican Republic employees to keep a record of consented conditions and avoid unprecedented legal hassles later on. It outlines the legal framework for employment relationships in the country. Primarily, employment contracts are of 2 types – fixed-term and open-ended.
A written employment contract enlists the working hours and conditions, salary and payment conditions, and contract duration (only in the case of fixed-term contracts).
The duration of an employment contract is considered fixed term if the nature of the services provided requires specific work. A contract is considered open-ended or indefinite if an employee works successively on defined terms for the same employer.
Employers hiring employees in the Dominican Republic can suspend employment contracts due to one of the other causes expressly provided by the Labor Code or by mutual consent of the parties. During a suspended employment contract, neither the employee nor the employer must follow their respective obligations for the suspension period.
Work hours and wages
Before you start recruitment and selection in the Dominican Republic, it is crucial to understand the working hours and wage structure. The standard workweek in the Dominican Republic is 44 hours per week or 8 hours per day. Companies recruiting Dominican Republic staff with round-the-clock operations can extend the work period by an additional hour. Still, the weekly average working hour may be at most 50 hours, and any hour worked more than 44 hours per week must be considered overtime and compensated as such. Part-time employees must not work over 29 hours in a single week. The Labor Code stipulates three types of work shifts:
- Day shift – 7 AM to 9 PM
- Night shift – 9 PM to 7 AM
- Mixed shift – includes periods from both shifts
A mandatory 1-hour lunch break is available in the schedule for employees working more than 6 hours daily. Moreover, employers hiring in the Dominican Republic workers must give their staff a continuous 36-hour rest at the end of the work week.
The minimum wage to employ Dominican Republic employees differs for businesses depending on their sectors and sizes. The minimum annual wage is about $1,491. The minimum salary is 8,310 DOP (Dominican Pesos) for companies operating in the Free Trade Zones (FTZ), while companies outside the FTZs offer minimum wages ranging between 7,843-12,873 DOP.
Companies that plan to start recruitment and selection in the Dominican Republic must offer some fundamental benefits. Firstly, the employer and employee fund the national retirement pension plan. In addition, employees receive paid vacation leave, with a minimum of 14 days per the labor law. Employee benefits include maternity and paternity pay, holiday pay, paid sick leaves, compulsory leaves for marriage and death in the family, and unpaid leaves, as well as other social security perks.
Additionally, employees are entitled to a 13th salary or Christmas bonus before 20th December.
Dominican Spanish is the predominant as well as official language of the Dominican Republic. Hence, you must understand and speak Spanish for recruitment and selection in the Dominican Republic. All official documents must also be drafted or translated into Spanish. With the assistance of a global EOR, you can ease the hiring and onboarding process.
The Cost of Hiring an Employee in the Dominican Republic
The recruitment fees in the Dominican Republic vary from company to company depending on several factors, including the employee’s gross annual salary, position title, and termination process.
Below is a list of expenses that businesses include while calculating the actual cost of recruitment and selection in the Dominican Republic:
- Annual salary: The base remuneration you pay your employees before considering taxes, bonuses, and other deductions.
- Bonuses: Includes benefits like insurance, pensions, and other social security provisions and perks in cash or other payment forms necessary to retain talent and motivate employees.
- HR costs: Includes payment for jobs like conducting interviews, background checks, hiring, and onboarding. It can significantly increase your overall hiring expenses if you do not hire an EOR service.
- Advertising: Costs of advertising a vacancy via various job portals and media channels
- Office setup: Cost incurred in arranging an office setup for your hired employee, including internet, workspace furniture, landline, mobile, etc.
- Training: A crucial part of the recruitment process in the Dominican Republic is providing the recruits with the required training for the role. Training program costs cover but are not limited to orientation, shadowing, external courses, etc.
What Does a Company Need to Hire Employees in the Dominican Republic?
Companies wanting to hire staff in the Dominican Republic must meet several criteria. Listed below are the requirements that employers for recruitment and selection in the Dominican Republic:
- The minimum age of voluntary employment is 16 years. However, the work hours of minors (16-18 years) are subject to the written authorization of parents.
- Dominican Republic residence permit, if you have an NM1 visa
- Work visa or permit (for foreign nationals)
Partnering with a global EOR can aid you in streamlining the hiring process and assist in the recruitment and selection of Dominican Republic workers without setting up a legal entity.
Although it is not mandatory, it is better to have a written employment contract after concluding recruitment and selection in the Dominican Republic specifying the wages, working hours, compensations, benefits, termination conditions, etc. If you are not offering a written employment contract, provide your employees with a written record of employment terms and conditions, at the very least. Ensure all agreements are in Spanish and that salaries and compensations are in DOP.
Various options for Hiring Employees in the Dominican Republic
Conduct market research to understand the prevalent employment types before you hire employees in the Dominican Republic. However, foreign employees’ rights are under the legislation governing foreign nationals’ employment.
- Direct hiring: Employers can conduct recruitment and selection in the Dominican Republic after complying with local labor laws and regulations. However, employers must register a company there before hiring.
- Employment agencies: Employers can work with local or international employment agencies to help them find and recruit employees in the Dominican Republic.
- Outsourcing: Employers can also outsource certain functions or tasks to third-party service providers in the Dominican Republic.
- Employer of Record (EOR): EOR companies can help employers with hiring and payroll administration and compliance with local labor laws and regulations.
It’s important to note that employers in the Dominican Republic must comply with local labor laws and regulations, including those related to minimum wage, working hours, and social security contributions. Additionally, before conducting recruitment and selection in the Dominican Republic, employers must ensure that at least 80% of their workforce comprises its citizens.
The Steps to Hiring in the Dominican Republic
The standard hiring process in the Dominican Republic is quite simple. It requires you to comply with the country’s Labor Code. Following are the steps for recruitment and selection in the Dominican Republic:
- Advertising: The best option is to advertise the job opening in all possible media sources, including newspapers and social networks.
- Shortlisting applicants: Next, screen and shortlist candidates for interviewing.
- Conducting interviews: Assess the shortlisted candidates through physical interviews and make the final list.
- Background checks: Run detailed background checks of the prospective candidates. Verify the educational qualifications submitted as part of the CV and former work experience, if applicable. Under the Ministry of Labor Resolution 02/2015, employers cannot conduct a check on a candidate’s criminal background directly or indirectly. Medical checks ascertaining pregnancy or HIV are also prohibited.
- Hiring and onboarding: Employers can hire candidates who clear their interviews. Additionally, make requisite background checks, complete other legal/administrative hiring procedures, and draft employment contracts (if applicable).
Let Multiplier be Your EOR Platform in the Dominican Republic
Multiplier will act as the primary employer of your international employees without you having to set up a business entity. Most importantly, we strictly adhere to local labor and tax laws while managing your employees’ payroll, benefits, taxes, and other HR-related activities in more than 150 countries.