When your company is looking to expand, you may have questions about Trinidad and Tobago employment law. The unfamiliar maze of hiring, payroll, benefits, and taxes in a foreign country can seem daunting. G-P can help.
Our global professional employer organization (PEO) services allow you to use our company as your workers’ employer of record. When you use our solution, we add your local employees to our fully compliant payroll, eliminating the need for you to embark on the cumbersome process of setting up a subsidiary. We also perform all the functions of a traditional human resources department — we can take care of onboarding, payroll, and negotiating local tax regulations, making your Trinidad and Tobago employment and business operations much more streamlined and successful.
Trinidad and Tobago, a pair of islands located in the Caribbean off the coast of Venezuela, is famous as a tropical vacation paradise. But the idea of opening a company in Trinidad and Tobago is also alluring. Especially if you already have international customers — 56% of small businesses do, and larger corporations are almost certain to as well — expanding abroad can be a lucrative option, especially to a tropical island with lush greenery and brilliant blue waters, where your job satisfaction is likely to be sky-high.
Trinidad and Tobago’s stable, democratically elected government and educated, English-speaking workforce make it an excellent place to do business. The country has a 98.7% literacy rate, and even though compulsory education ends after age 11, more than 94% of primary students go on to secondary school. The country also has a well-regulated and reliable financial system suitable for foreign expansion.
The country relies on energy for much of its economic activity, with oil and gas constituting about 40% of its GDP and 80% of its exports. Expansions in the petrochemical industry can easily prosper here, but many other industries, from tourism to tech, flourish in the country as well. The government of Trinidad and Tobago is interested in diversifying the country’s economy, and it has targeted sectors such as tourism, technology, agriculture, and shipping as areas for growth.
Still wondering how expanding to Trinidad and Tobago would work? Below, we’ll discuss some topics like Trinidad and Tobago labor laws that employers must know, common benefits for employees, how to start a company in Trinidad and Tobago, and how PEO services can help.
Employment Contracts in Trinidad and Tobago
According to the International Labour Organization, employment contracts can be either verbal or written, and they can be either express, with all their terms and conditions explicitly spelled out, or implied. Under Trinidad and Tobago contract law, the terms and conditions of a worker’s employment can be contained in an individual contract between the employer and the employee, in a collective bargaining agreement negotiated between a trade union and the employer, or in legislation, as with employees of the state. Under all contracts, the minimum wage is currently $17.50 per hour.
Business in Trinidad and Tobago is increasingly adopting fixed-term contracts — contracts that run over a defined period — rather than the permanent, indefinite contracts that were common in the past. Employers increasingly want the ability to change their labor force without much hassle.
Neither guaranteed bargaining between employers and workers nor striking is protected under the constitution. However, the Industrial Relations Act (IRA) does make provisions for collective bargaining and striking. Any person who works under a contract with an employer — whether that contract is verbal or written, express or implied — has the right to seek the benefits and protections provided under the IRA.
Below is an overview of the different types of contracts possible for employment in Trinidad and Tobago:
- Full-time or permanent contract: Full-time or permanent contracts in Trinidad and Tobago are becoming rarer as businesses increasingly turn to part-time or fixed-term contracts. As in many other countries, under a full-time contract, employees work 30 to 40 hours a week and receive benefits from their employers.
- Part-time contract: The definition of “part-time” varies between countries, but the United Nations generally defines it as referring to work performed for fewer than 30 to 40 hours per week. Part-time contracts are becoming more common in Trinidad and Tobago. Under a part-time contract, residents work a smaller number of hours — typically anything under 35 hours, though many part-time jobs offer only 21 hours. Part-time jobs often offer no benefits, but increasingly they offer pro-rata benefits in proportion to the number of hours worked.
- Fixed-term contract: Fixed-term contracts are designed to end after an appointed time. Some employers in Trinidad and Tobago have tried to claim that limited, fixed-term contract employees are ineligible for certain benefits — for example, benefits under the Retrenchment and Severance Benefits Act. In one famous court case, Oilfields Workers’ Trade Union and Schlumberger Trinidad Inc., an employer claimed that since a worker had been employed on consecutive fixed-term contracts for 10 years, he was ineligible for severance benefits. Trinidad and Tobago’s Industrial Court disagreed and awarded benefits to the worker.
- Agency contract: Agency workers typically receive an employment contract through an employment agency. This arrangement creates a triangular relationship between the employer, the employee, and the agency in which the employee is legally bound to the agency while receiving compensation from the employer’s company. For legal purposes, workers with agency contracts are generally held to be employers of the employee in question.
- Freelance or contractor agreement: Freelance or contractor agreements typically do not provide benefits to employees, and they make employee severance easier as well. Employees in Trinidad and Tobago may feel cautious about accepting these kinds of contracts, and contract employment has been the subject of protests in the country and calls for reform by the Labour Minister. However, in some lines of work, the scheduling flexibility they often provide can make them appealing.
- Casual or zero-hour contract: In a zero-hour contract, the employer does not have a minimum number of hours of work it must offer to the employee, and the employee does not have to accept any work offered. These contracts may be appealing for the flexibility they offer but can put employees at a disadvantage by offering them little security or stability in their employment.
Working Hours in Trinidad and Tobago
Under Trinidad and Tobago employment law, legislation determines the required hours for state employees. For employees in the private sector, a collective agreement is likely to determine working hours.
The International Labour Organization reports that generally speaking, the standard hours of work in Trinidad and Tobago are 8 a.m. to 4 p.m. According to the country’s Ministry of Labour and Small Enterprise Development, a standard workday should not generally exceed eight hours, and a standard workweek should not exceed 40 hours. Pay entitlements come into play for Trinidad and Tobago holidays — employees who work overtime receive overtime pay, and employees who work on public holidays receive double pay.
Holidays in Trinidad and Tobago
Trinidad and Tobago statutory leave days include holidays. Trinidad and Tobago observes the following official public holidays, on which all government offices and most companies are closed:
- New Year’s Day (January 1)
- Spiritual Shouter Baptist Liberation Day (March 30)
- Good Friday (varies)
- Easter Monday (varies)
- Eid al-Fitr (varies)
- Indian Arrival Day (May 30)
- Corpus Christi (June 11)
- Labour Day (June 19)
- Emancipation Day (August 1)
- Independence Day (August 31)
- Republic Day (September 24)
- Divali (varies)
- Christmas Day (December 25)
- Boxing Day (December 26)
Many businesses are also closed on Carnival Monday and Tuesday, even though these are not official public holidays.
According to the International Labour Organization, except for employees of the Police, Prison, and Fire Services, state employees are entitled to paid public holidays. When state employees are required to work on public holidays, they are entitled to an additional day off as compensation. Paid holidays are at the discretion of the employer in the private sector.
Vacation Days in Trinidad and Tobago
According to the International Labour Organization, for most workers, vacation leave is not one of the legally mandated Trinidad and Tobago employee benefits. However, state workers are entitled to some paid vacation leave.
In the private sector, a collective bargaining agreement may determine the amount of paid vacation leave an employee can receive. If there is no collective bargaining agreement, the employer determines its employees’ vacation time. In both the public and private sectors, employees may start accruing paid vacation days off after they have worked at their place of employment for a year.
Trinidad and Tobago Sick Leave
The International Labour Organization reports that under sick leave labor law in Trinidad and Tobago, sick leave for state employees is mandatory — typically 14 paid days per year. In the private sector, employees receive paid sick days at their employer’s discretion. Many private employers offer 14 days as well under their company’s sick leave policy.
Maternity/Paternity Leave in Trinidad and Tobago
Maternity leave in Trinidad and Tobago is a legal right under the Maternity Protection Act (MPA) of 1998. Under the MPA, both public and private employees receive thirteen weeks of maternity leave — six weeks before the due date and seven weeks after. Even in the event of a stillbirth or death, the employee is entitled to the full amount of leave. During the thirteen weeks, an employee is entitled to receive one month’s pay and two months’ half pay, according to the Ministry of Labour. Afterward, she is guaranteed the right to come back to work.
Company leave policy in Trinidad and Tobago also allows employees to take paid time off from work to receive prenatal care. As with vacation leave, an employee must have been with her employee for at least a year to receive these benefits.
Paternity leave is not required, but some employers offer it. Male teachers, for instance, can take four days of paternity leave around the birth of a child.
Health Insurance in Trinidad and Tobago
The National Insurance Board of Trinidad and Tobago (NIBTT) administers health insurance benefits. If employees pay into the National Insurance System, they can receive benefits. Employees who earn $200 or more per week must register and contribute, while employees who earn less have the option to participate as well. Employers also contribute a proportional amount.
The sickness benefits under the NIBTT compensate people who must miss work because of illness. These can be paid for a maximum of 52 weeks. The employment injury benefits compensate employees who become unable to work because of personal injuries. They provide several distinct benefits:
- Injury benefit: This is paid for up to 52 weeks while the person recovers from injuries.
- Disablement benefit: This is paid either monthly or as a lump sum if the person becomes disabled.
- Medical expenses: The person can receive a cash payment to put toward medical expenses.
- Death benefit: This is a monthly payment to dependents in the event of the person’s death.
In Trinidad and Tobago, public health services are free to both residents and non-residents. However, public facilities often experience shortages of equipment and medicine and long wait times. Private facilities offer superior care but also come at a high cost, so expats make up the majority of private facilities’ patients.
Trinidad and Tobago Supplementary Benefits
Under the NIBTT, residents of Trinidad and Tobago can receive other benefits as well, including retirement benefits and funeral benefits.
- Retirement pension: Residents who have paid 750 contributions to the National Insurance System are eligible for a retirement pension if they retire between the ages of 60 and 65. They automatically become eligible at age 65 whether they have retired or not. The amount of the pension depends on the amounts of the contributions.
- Retirement grants: Alternatively, residents can receive a one-time sum in the form of a retirement grant if they have made less than 750 contributions to the National Insurance System. The minimum amount of the grant is $3,000.
- Funeral benefits: Funeral benefits cover the cost of funeral expenses. Residents are eligible for funeral benefits after death if they have made at least 25 contributions to the National Insurance System or were receiving employment injury benefits at the time of their death.
Bonuses
Production and efficiency bonuses are considered earnings in Trinidad and Tobago. As such, they must appear on an employee’s paystub and be reported along with wages to tax officials and the NIBTT.
Termination/Severance in Trinidad and Tobago
According to the International Labour Organization, no official legislation governs general termination in Trinidad and Tobago. Either the employer or the employee may terminate a contract, no matter what type of contract it is. However, a notice period is typically required, usually one month.
The business laws in Trinidad and Tobago allow for retrenchment, or the termination of employees because of redundancy. In cases of retrenchment, the employee is entitled to severance compensation. Under the Retrenchments and Severance Benefits Act, employees must receive two weeks’ pay per each year of service. Employees who have worked for their employer for five years or more receive two weeks’ pay per each of the first four years plus three weeks’ pay for the fifth year and beyond.
When the retrenchment involves five or more employees, employers must provide a written explanation for the termination. They must also provide notice, typically 45 days.
A number of exemptions to this act exist, however. It does not apply to employees who have worked at their place of employment for less than a year, and it does not apply to casual, seasonal, or fixed-term contract workers.
Paying Taxes in Trinidad and Tobago
As of 2021, residents pay no taxes on their first $84,000 of income. Thereafter, the Trinidad and Tobago income tax rate is 25% on the first million dollars of chargeable income and 30% on any income exceeding a million dollars. However, companies are required to withhold payroll tax from employees’ paychecks.
The corporate tax rate is generally 30% on chargeable profits, though some banks and petrochemical companies are subject to a corporate tax rate of 35%. Additionally, a business levy is assessed at a rate of 0.6% of revenue. A business must pay whichever is higher, the corporation tax or the business levy.
Why G-P
Globalization in Trinidad and Tobago should be easy and intuitive. Trinidad and Tobago labor law can be confusing for foreigners, but G-P is here to help.
When you are ready to expand, we want to be a trusted provider for your PEO services. We can offer advice on how to do business in Trinidad and Tobago, and our world-class solution allows you to customize the solution that best fits your company. We can handle the tricky aspects of recruiting, onboarding, payroll, providing benefits, and navigating the murky world of international taxes so you can get back to doing the business work you love and do best.
Contact us today to learn more.