The Cayman Islands’ economy is mainly driven by the financial services and the tourism sector that contribute nearly 50% to 60% of the country’s GDP. With an average income of about KYD$47,000, the people of Cayman Islands enjoy the highest living standards in the Caribbean. The ‘twin pillars of economic development’ namely tourism and international finance were bolstered by the government with the introduction of telecommunications and transportation. The country’s major source of income is indirect taxation since there is no prevalent income tax, corporation tax, and capital gains tax.
Currency: Cayman Islands Dollar (KYD)
Principal Language: English
Government: Parliamentary Democracy
Capital City: George Town
Major Cities: West Bay, Bodden Town, East End
Employment contracts can be verbal or written. Section 6 of the Labor Law states minimum details that must be mentioned in employment contracts including:
- An employee’s job title
- The hours and days of work
- Job description
- The interval between pay periods
- The period of employment (indefinite or fixed)
- Any probationary term, holiday, annual, and sick leave entitlements
- The hourly rate or equivalent for salaried employees
- The notice requirements that employees and employers owe to each other
Section 8 of the Labor Law contains the provision for a 6-month probationary period that can be extended by 6 months with the consent of employees.
The regular work schedule comprises 37.5 hours in a week. Part-time employees are required to work for a proportion of regular work hours put in by full-time employees, according to an agreement between employees and the appointing officer. The standard work hours are from 8.30 a.m. to 5.00 p.m. including 1-hour lunch break (unpaid) and two 15-minute rest breaks.
Overtime must be either paid or compensated by providing a day off.
Employees are entitled to the following public holidays:
- New Year’s Day (or equivalent weekday)
- National Heroes Day
- Ash Wednesday
- Good Friday
- Easter Monday
- Discovery Day
- Queen’s Birthday
- Constitution Day
- Remembrance Day
- Christmas Day (or equivalent weekday)
- Boxing Day (or equivalent weekday)
- Elections Day (every 4 years)
According to the minimum terms and conditions stated in the Labor Law, employees are entitled to 2 weeks’ annual leave which goes up to 4 weeks after 10 years of employment.
Employees are entitled to 10 days’ paid sick leave in a year provided a doctor’s certificate is submitted for each day absent. In the case of serious injury or illness, which may require treatment for more than 10 days, employees can take 6 days’ additional sick leave upon submitting a medical certificate issued by a registered medical practitioner. The additional sick leave can be extended up to 125 days on full pay and an extra 135 days on half pay.
Maternity Leave and Paternity Leave
Women employees are entitled to 90 days’ maternity leave after 12 months of continuous service with an employer. Out of these 90 days, regular wages are paid for 30 days while the rest is unpaid.
Male employees are entitled to 2 weeks’ paternity leave after 12 months of continuous employment. Out of these 2 weeks, normal wages are paid for 1 week while the 2nd week is unpaid.
Employees who represent the Cayman Islands as members or managers of a cultural or sporting body at a national conference or meet are entitled to 10 days’ leave in a year to attend an event after completing 6 months of employment.
Employees can be given a required leave if an appointing officer deems it necessary in the public interest. The period of leave is decided by the appointing officer. If the period of leave exceeds 30 days, then the leave also requires the approval of the Head of the Civil Service and the Chief Officer.
Compassionate Leave and Bereavement Leave
Employees are entitled to a compassionate leave of up to 7 days in a year if an immediate family member gets sick or suffers an injury.
Employees are entitled to 10 days’ bereavement leave annually upon the death of an immediate family member (spouse, child, mother, father, sister or brother).
Pension and Social Security
Health Insurance & Other Benefits
It is mandatory for employers to provide health insurance to employees, their spouses, and dependents.
Under the National Pensions Law, employees and employers are required to contribute an amount equal to 10% of employees’ monthly wages into a pension scheme where employers contribute at least 5%, and employees contribute up to 5%.
A Few Key Provisions of Cayman’s Pension Law are below:
- Normal Retirement Age Removed
The concept of normal retirement age has been removed and replaced with the normal age of pension entitlement along with an increase in retirement age from 60 to 65 years. Employees who will reach the age of 60 in the next 12 years can claim pension benefits before reaching 65. Employees can choose to retire early at the age of 55.
- Maximum Pensionable Earnings Increased
Maximum pensionable earnings have been increased to CI$87,000 from CI$60,000.
- Foreign Workers Transfer Benefits in 2 Years
Foreign workers need to wait for 2 years to transfer their pension benefit to a pension plan in their home countries.
- All Employees & Self-Employed Persons must have a Pension Plan
Employees aged between 18 and 65 are required to make contributions to a pension plan except those aged less than 23 who are pursuing full-time education and jobs such as gardeners and housekeepers.
- No More Pension Refunds after 2019
The pension contributions will cease by 30 December 2017 and employees will not receive pension refunds after 30 December 2019.
Employers are required to provide limited compensation for the injury or death of employees during employment. Workers’ compensation also includes Employers Liability.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Cayman Islands and hire their employees without having to establish a branch office or subsidiary in Cayman Islands.
- Your candidate is hired via our Cayman Islands PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
- Your new employee begins work quickly as we take care of employment contracts, statutory and non-statutory benefits, and running their payroll - all in full compliance with Cayman Islands laws.
- Global PEO Services experts manage all day-to-day operational issues such as employee expenses, and severance/termination if required.
- With no contractor risks, pass on the compliance burden to Global PEO Services.
Spin Off/M&A Support
- Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.
24/7 Support in 100+ Countries
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Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.