Located in the Irish Sea between Ireland and England, the Isle of Man is a “self-governing dependency” of England. It is an offshore financial and recreational center. The major sectors in the island include offshore banking, insurance, tourism, online gambling and gaming, information/communications technology (ICT), and manufacturing. In the Vision 2020 document, the government of Isle of Man has published their strategies for facilitating foreign investments in hi-tech sectors, such as digital media, aerospace, Biomed, and ICT.
Currency: Pound Sterling (£)
Principal language: English, Manx
Government: Self-governing British Crown Dependency
Capital City: Douglas
Major Cities: Ramsey, Peel
An employment contract in the Isle of Man is not required to be in writing, but the contract has to comply with certain implied terms and employment statutes. The implied terms of such a contract must include payment of remuneration, taking care of employees’ health and showing trust and confidence in employees. Implied terms from sources such as custom and practice, collective agreements, statutes, staff handbooks and work rulebook are also a part of employment contracts.
The law distinguishes between an employee, a worker and a self-employed as the rights enjoyed by each of these categories differ. The law also classifies four distinct employment relationships: workers that an agency hires on behalf of their client, casual or intermittent or seasonal workers, home workers, and volunteers.
The legislation on the restriction of working hours in the Isle of Man is only for children of school age and retail workers. Legislation for other adult employees only mandates paid annual leave; however, this does not mean that employees don’t get any protection under the law. Employers need to comply with the statutory obligations for maintaining their workers’ health and safety, and also to adhere to health and safety duties based on common law. Employers need to ensure that excessively long working hours do not damage the health of their employees.
Children of school age can be employed, with due parental approval, once they reach 13 years of age. Working hours for child workers are between 28 and 35 hours a week, with 2 to 4 hours permitted on school days and 7 hours permitted on non-school days. These hours are subject to conditions.
The Isle of Man celebrates 10 public holidays:
- New Year’s Day
- Good Friday
- Easter Monday
- Early May Bank Holiday
- Late May Bank Holiday
- Senior Race Day
- Tynwald Day
- Summer Bank Holiday
- Christmas Day
- Boxing Day
According to the Annual Leave Regulations 2007 (“the Regulations”) all employees including agency workers and trainees, are entitled to:
- Annual statutory paid leave of 4 weeks
- Employees are entitled to payment for leaves not taken on their termination
There is specific eligibility criteria for employees to receive these leave benefits. Though, in the first year of employment, an employee accrues entitlement at the rate of 1/12th per month. If an employee works 5 days a week, he or she is entitled to 20 days' leave in a leave year; if works 3 hours a week, the entitlement is 12 hours' leave.
Employees are entitled to 26 weeks of sick leave, which is in addition to the statutory annual leave. Exhausting the entitlement of sick leave in a year will proportionately reduce their share of annual leave. When the employer pays for the sickness of an employee, it needs to subject that payment to Income Tax Instalment Payments (ITIP).
The accounting treatment of money received by an employee as a sickness benefit is different, whether paid directly by the employer or through insurance. The ITIP deductions need to be in the high range of 20%, and the employer cannot treat this as remuneration.
- Women employees get 26 weeks of maternity leave, regardless of their duration of service
- An employment contract is valid even during the maternity leave
- The employee is entitled to all the contractual benefits during her maternity leave in addition to wages or salaries.
Employees are allowed to take paternity leave for 1 or 2 consecutive weeks. Taking leaves in 2 or more separated weeks or consecutive days is not allowed. Only one extended period of leave is allowed, regardless of the number of newborns.
Pension and Social Security
All employers in the Isle of Man need to make social security contributions of 12.8% on all weekly earnings above the income of 118 Pounds Sterling.
Payment of National Insurance Contributions:
- Retirement Pension
An employee is eligible for retirement pension after attaining the specified age and making the necessary National Insurance Contributions. A pension plan is available that provides additional income to people of age 75 or more (who are not eligible for additional pension under the regular state pension program).
- Pension Supplement
The Pension Supplement adds several benefits to the basic retirement pension program, which include long-term bereavement benefits, as well as long-term incapacity benefit. The Pension Supplement is available for payment at a fixed rate of £40.68 if an employee wants to include the long-term incapacity benefit.
- Contributory Benefits
The Class of payments to National Insurance contributions determines the benefits a person is entitled to receive. This determination is shown in the following table:
Class 1 Class 2 Class 3 Benefits Yes No No Jobseeker's Allowance Yes Yes No Incapacity Benefit Yes Yes No Maternity Allowance Yes Yes Yes Bereavement Payment Yes Yes Yes Widowed Parent's Allowance Yes Yes Yes Bereavement Allowance Yes Yes Yes Retirement Pension (basic) Yes No No Additional Pension
- Non-contributory Retirement Pension
An employee is eligible for a “category D” retirement pension when:
- He or she turned 80 years old before April 6, 2016
- He or she has not paid adequate NICs or receives a pension at a lower rate than the same available from the non-contributory pension.
How GPS can Help
With our Global PEO/Employer of Record services, companies can expand into Isle of Man and hire their employees without having to establish a branch office or subsidiary in Isle of Man.
- Your candidate is hired via our Isle of Man 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 Isle of Man 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 150+ Countries
- Empower your teams with 24/7 support and a single point-of-contact model in which experienced client services directors are in continuous communication with information and advice.
- We are backed by a mix of 300+ multidisciplinary experts from HR, Payroll, Finance, Tax, and Legal domains who are ready to respond to the expected and unexpected needs of your business on the shortest notice.
Easy Visibility into Your Employee Time & Attendance and Benefits Data
With our Global PEO, you get access to Mihi, our proprietary SaaS solution for time and attendance, vacation, leave management and benefits enrollment and managements. Mihi enables clients to have easy access to employee data in real time. It is designed specifically for companies with a global workforce, especially when working in multiple countries with low headcounts.
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. Lean more about our end-to-end international expansion services.