Jamaican Employment Laws
Minimum Wage
The Jamaican Minimum Wage Act provides all employees with the right to a minimum wage. The Ministry of Labour and Social Security, upon advice from the Minimum Wage Commission, sets different minimum wage rates for workers carrying out specific roles. Employers who fail to comply with the minimum wage rates may be fined by the resident magistrate. Effective August 1, 2019, minimum wage is set at J$7,000 per week.
Termination of Employment
The Employment (Termination and Redundancy Payments) Act provides for minimum periods of notice for employees who have been working for four weeks or more. Employers must give at least two weeks’ notice in writing to employees who have been working for less than five years, and at least four weeks’ notice to those who have been employed for between five and 10 years. The notice period is 12 weeks for employees who have been in continuous employment for over 10 years.
Redundancy Payments
Section 5 of the Employment (Termination and Redundancy Payments) Act provides an employee with the right to a redundancy payment if his employer ceases to carry on business. According to Section 6, no redundancy payment is due if the employer has terminated the contract for reasons relating to the conduct of the employee. Upon redundancy, employers must provide employees with a written statement detailing how the redundancy payment has been calculated.
Maternity Leave
The Jamaican Maternity Leave Act provides female employees with the right to take maternity leave if they have been working with the same employer for at least a year. According to Section 3, employers must grant employees a period of 12 weeks’ maternity leave, with an additional 14 weeks upon receipt of a certificate from a medical practitioner. During maternity leave, employers must pay female employees maternity pay for a period of eight weeks. Section 4 provides female employees with the right to return to work following maternity leave on the same terms and conditions as before.
Sick Leave
Employees of up to 10 years receive 10 vacation days annually. Those employed for more than 10 years receive 15 days annually. After 110 days, 1 day sick leave is allowed for every 22 days worked. From the first year, two weeks sick leave is available annually.
Vacation Leave
The minimum amount of vacation leave that an employer must grant is two weeks for each year worked by an employee with fewer than 10 years' service, and three weeks for each year worked by an employee with more than 10 years' service.
Taxes
Employer
2.50% - NIS (National Insurance Scheme)
3.00% - NHT (National Housing Trust)
3.50% - Education Tax
3.00% - HEART (Human Employment & Resources Training)
Employee
2.50% - NIS (National Insurance Scheme)
2.00% - NHT (National Housing Trust)
2.25% - Education Tax
0.00% - Up to 1.5M
25.00% - 1.5M - 6M
30.00% - Over 6M
VAT
General Consumption Tax – 15% as at April 1, 2020.
Payroll Contributions
Social Security
Both employers and employees are required to contribute 2.5% of employers wages (salary ceiling either J$19,230 weekly, or J$1,000,000 annually).
Pension Fund
The employer contributes 5% of employees’ wages. Employees are not obligated to contribute, but commonly contribute 5% of their wages.
Who is Eligible to File Tax Returns?
Individuals such as self-employed persons, partners and employees/pensioners taxed under the Pay As You Earn (PAYE) system, but who also have other sources of income in addition to their salaries or wages -- such as rent or a business "on the side", MUST file their annual income tax return using a Form IT01. Visit: Jamaica Tax Administration website: https://www.jamaicatax.gov.jm/
Click to read or download the Jamaican Flexible Work Arrangements Faqs.
