Global PEO Services (GPS) helps companies hire employees in Guam 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 Guam, 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 Guam 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 Guam. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Guam - Country Overview
Guam is a small island in Western Pacific Ocean, which is an unincorporated US territory. The country’s economy is primarily dependent on US military spending and tourism. An estimated 1.1 million tourists visit the territory every year, mostly from Japan and Korea. Amenities that tourists enjoy in the territory include a range of hotels, golf courses, duty-free shopping outlets, and malls, including the world’s largest Kmart. Since 2005, the tourism-based hospitality industry of Guam has grown steadily, and this trend continues unabated.
US Dollar ($)
Presidential Representative Democratic System
Dededo, Tamuning, Inarajan, Talofofo
Employment Contracts in Guam
In Guam, employees get protection from the government under various laws when they qualify to be an employee based on the following conditions:
- Any person in the territory of Guam working for another on hire including those who have stopped working due to a labor dispute or unfair labor practice.
- The person has returned to work after the settlement of a labor dispute or unfair labor practice by a competent court.
- The person was not involved in an unfair labor practice.
- The person is not working for another person or establishment.
- The person has not been absent from work for a long period that renders a settlement unreasonable.
An employment contract in Guam can be in the form of a written or verbal agreement, and for an indefinite or fixed term, between the employer and employees. Rights of employees include:
- Joining labor organizations
- Engaging in lawful activities for collective bargaining or other forms of mutual benefit
- Refraining from the activities mentioned above, but may need to join a union as part of an all-union agreement
Working Hours in Guam
The maximum working hours per week is 40 for all employees except the employees covered under the Fair Labor Standards Act of the United States Code. A shift of more than 8 hours is allowed during a 24-hour workday that may go up to 14 hours provided a minimum break of 30 minutes is provided after 5 hours of continuous work.
Overtime in Guam is offered at a rate of 1½ times the regular pay rate of an employee for every additional hour or a proportion of hour worked.
Employee Leave in Guam
Guam observes 12 public holidays each year. These 12 holidays include 8 that are observed in the mainland of the United States and 4 that are specific to Guam.
- Jan. 1: New Year’s Day
- Jan. 21: Martin Luther King Jr. Day
- Mar. 4: Guam History & Chamorro Heritage Day
- May 27: Memorial Day
- July 4: Independence Day
- July 22: Liberation Day
- Sep. 2: Labor Day
- All Souls’ Day
- Nov. 11: Veterans Day
- Thanksgiving Day
- Dec. 9: Santa Marian Kamalen Day
- Dec. 25: Christmas Day
The guidelines of U.S. Labor Department do not apply to Guam labor laws.
Employees who are eligible for annual leave are allowed to accumulate not more than 320 hours. If employees accrue more than 320 hours of leave, it is credited to the employee’s accumulated sick leave, but up to 100 hours is credited to sick leave at the closing of every fiscal year.
Employees who have accumulated their annual leave of more than 320 hours, may carry forward their excess annual leave, before retirement or end of service. At the time of termination of service or retirement, that portion is allowed to be converted to sick leave whereas the remaining excess of annual leave will forfeit. Lump sum compensation paid on retirement on account of annual leave is for 320 hours.
|Years of Service||Annual Leave Credit – Bi-Weekly Pay Period||Total Credit Annually|
|< 5 years||4.0 Hours||104 Hours (13 days)|
|> 5 years||6.0 Hours||156 Hours (19.5 days)|
|> 15 years||8.0 Hours||208 Hours (30 days)|
Employees accrue sick leave at the rate of half-day (4 hours) for completing 2 weeks at work. 2 weeks of work implies 10 completed work days.
Maternity leave of 20 days is allowed to female employees whose employment status is permanent. The same applies to the adoption of one or more children who are 5 years old or younger. Pregnant or adopting employees are allowed to take additional leave by using accumulated sick leave or allowing for unpaid leave. The total leave for maternity is not allowed to be more than 6 months without the approval by employees’ supervisor.
Paternity leave of 20 days is allowed to male employees whose status is permanent. The leave is allowed for childbirth or adoption of one or more children who are 5 years old or younger. Similar to female employees, men are also allowed to use accumulated sick leave or take unpaid leave for a total leave of 6 months.
Family Medical Leave Act (FMLA)
Under the FMLA, employers need to allow 12 weeks of paid leave or leave without pay after the birth or adoption of a child, the serious illness of an employee, or for taking care of the employee’s relative who is in critical condition.
All members of the reserve components affiliated to the US Army, Air Force, National Guard, Air National Guard, and Coast Guard are entitled to 15 days of military leave per fiscal year in Guam.
Voluntary Leave Sharing Program
Employees are allowed to transfer their sick or annual leave to another employee for a personal or medical reason. The transferred leaves cannot be more than 90 days on any occasion, but an extension of additional 90 days is permitted under special circumstances and with due medical certification. Employees are not allowed to transfer or share their leave with a person in a supervisory role at a higher position in the employment hierarchy. The same rule of not allowing leave transfer applies to a supervisor’s immediate family.
Employee Benefits in Guam
The retirement benefit is based on an individual’s total contributions to the retirement fund. The mandatory contribution rate for both employer and employee is 6.2%. The Defined Benefit is a retirement benefit plan (also known as DB Lite) that provides the retirees an annuity equal to 1.75% of the average salary for every year of service.
DB Lite also provides disability and survivor benefits to the spouse and children of the beneficiary. The minimum contribution rate, as determined by the government, is 9.5%. There is a 1% mandatory contribution to the Deferred Compensation Plan as well.
Supplemental Security Income
The Supplementary Security Income (SSI), a federal monetary assistance program, provides monthly cash payments to aged, low-income, blind or other disabled persons in the 50 states of the US along with other US territories that include Guam. The Secretary of Health and Human Services administers this program federally.
It is not mandatory for private sector employers to provide health insurance to their employees. Government sponsored individual health insurance is available but premiums are quite steep. It is not mandatory for everyone to get enrolled, as the law mandates in the 50 states of the US.
A proposed bill for making health insurance mandatory for all hotel employees was opposed by the association of hotels and restaurants. Their main argument was that most hotels already provide medical insurance to their employees based on part or full-time employment status, and after considering whether particular employees get insurance from their spouse.
The Guam legislature is discussing a law for making healthcare accessible to all through mandatory insurance contributions, but no bill for such a law has been passed yet.