Bahamas PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in the Bahamas without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in the Bahamas, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Bahamas labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in the Bahamas. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Bahamas - Country Overview
Located on the southeast of Florida, USA, the Bahamas is an archipelago in the Atlantic Ocean, with an economy dependent on tourism and overseas financial services (comprising more than 60% of its GDP). Other sectors contributing to its economy include agriculture and fisheries, oil, pharma, rum distillation, ship repair, sea salt production, and mining. The government is likely to privatize state-owned enterprises to reduce its burden of non-performing loans.
Bahamian English and Haitian Creole
Parliamentary System, Constitutional Monarchy, Unitary State
Other Major Cities
Lucaya, Freeport, West End, Coopers Town
Employment Contracts in the Bahamas
Under the labor code, an employment agreement is defined as a contract of service or apprenticeship, whether express or implied. Contracts can be verbal or in writing.
Working Hours in the Bahamas
The standard workday is 8 hours, and the standard workweek is 40 hours in a week. These restrictions do not apply to supervisory or managerial positions. Employers must provide employees with 12 consecutive hours of rest between shifts and must provide employees with a weekly rest period of at least 48 hours. Employers must also provide employees an hour long meal break.
Employee Leave in the Bahamas
The public holidays specified in the Public Holidays Act are:
- Jan. 1: New Year’s Day
- First Monday after Easter Monday
- The Monday after Whitsunday: Whit Monday
- The First Friday in June: Labor Day
- July 10: Independence Day
- The First Monday in August: Emancipation Day
- Oct. 12: National Heroes Day
- Dec. 25: Christmas Day
- Dec. 26: Boxing Day.
Employers must provide all employees with 2 weeks of paid annual leave after employees complete a year of work. The leave provision must be paid based on the length of service. Employees who have worked for more than 6 months but less than a year and receive annual leave, must be paid for at least 1 week of leave.
Employees who have worked at least a year, but less than 7 years, must be compensated with 2 weeks basic pay upon taking leave. Employees who have worked at least 7 years must be compensated with 3 weeks basic pay upon taking leave. Vacation pay must be paid at least 1 day before the commencement of the employee’s leave.
Employers must provide all employees who have been working for at least 6 months with 1 week of paid sick leave per year.
Employers must provide pregnant employees with 12 weeks of paid maternity leave for all employees who have worked at least 1 year. Employers must pay those on maternity leave 33.33% of their normal pay, as long as it is an employee’s first time on maternity leave in the last 3 years. Otherwise, the leave is unpaid by the employers.
In all cases, employees also receive maternity payments from social security. Employers must grant unpaid leave of at least 6 additional weeks for a pregnancy-related illness.
Employers must provide all employees who have worked at least 6 months with unpaid leave for 1 week following the birth of a child or the death or illness of a child, spouse, or parent.
Employees who have been employed for at least 6 months are entitled to 1 week of unpaid leave for the death or illness of a spouse or parent.
Employee Benefits in the Bahamas
Pension and Social Security
The minimum age for retirement is 65 years with 150 weeks of contributions to the social security system. Employers contribute 5.9% of payroll to National Insurance, which includes pension benefits; employees contribute 3.9% of wages.
Social security benefits are provided for maternity, sickness, unemployment and workplace injuries. Sickness payments are made weekly to eligible insured persons who are temporarily unable to work due to an illness which is not an employment injury. They are paid at a weekly rate of 60% of the employee’s average weekly covered earnings after a 3-day waiting period for up to 26 weeks.
To qualify for a sickness benefit, a person must be employed on the day of or on the day prior to the onset of the illness. Additionally, the individual must have:
- paid at least 40 contributions into the National Insurance Program, and
- paid and/or been credited with at least 13 contributions in the 26 weeks immediately before the week the illness started, 26 contributions in the 52 contribution weeks immediately before the week the illness started or 26 contributions in the immediate preceding contribution year.
Employers in the Bahamas must contribute to National Insurance, which is administered by the National Insurance Board (NIB). Contributions pay for sickness, invalidity, maternity, retirement, death, workers’ compensation, and unemployment benefits.
Coverage: Employers must withhold National Insurance contributions and make additional contributions for all workers, regardless of nationality, legal status, or length of service.
Rates and Thresholds: Employers must contribute 5.9% of payroll to National Insurance, while employees must contribute 3.9% of their salary. The maximum computable salary for the calculation of National Insurance contributions is BSD$650 per week or BSD$ 2,817 per month.