Unemployment in the Bahamas, at about 14% of the work force, is considered quite high, but there are significant shortages of skilled workers and managerial-level employees in some industries. The work force is currently estimated at about 140,000. Some 30% of the total is employed in tourism-related activities and about 10% in the banking and financial sector.
The government has made education a high priority. Education is compulsory for all children up to the age of sixteen, and the literacy rate is close to 100%. Particular emphasis is given to job training, and courses are available in a number of vocations.
Employees are generally recruited through newspaper advertisements, although labor exchanges (government recruitment offices) maintain lists of individuals available for various jobs. Employees tend to stay with their employers for several years before seeking new positions.
EMPLOYEES' RIGHTS AND REMUNERATION
Relationships between employers and employees are governed by the Fair Labour Standards Act 1970 and various provisions of the Industrial Relations Act 1970 (as amended).
It is advisable to give every permanent employee a written contract of employment, which specifies the rate of pay, working hours, and vacation and pension entitlements, as well as procedures for settling disputes, termination notice periods, and rules applying to absence and sick pay. However, such contracts are not legally required, and at present only when a labor union is involved or an expatriate is hired are they customarily prepared.
Work force health and safety regulations are usually governed by the relevant union contracts. If no agreement exists and complaints are received, the Ministry of Health may step in.
WORKING HOURS, HOLIDAYS, VACATIONS, AND SICK LEAVE
The Fair Labour Standards Act establishes eight and one-half hours as the maximum work day and forty-eight hours as the maximum work week without overtime pay. In practice, the work week is generally thirty-five hours for office staff and forty hours for manual workers. Public holidays, of which there are ten every year, are paid, and all employees are entitled by law to one week of paid vacation after a full year of employment, although it is common practice for two weeks of paid vacation to be granted.
Normally, employers also allow an employee two weeks of paid sick leave. By law, an employee is entitled to up to eight weeks of paid maternity leave.
PAY RATES
There are no established minimum wages, although the Ministry of Labour is authorized to set minimum rates for particular industries. Pay rates are not indexed to inflation rates. Some average annual wages are given in Table 4. Agricultural workers may earn as little as B$50 a week.
TABLE 4 - Average Annual Wages for Selected Positions
POSITION ANNUAL WAGES (B$) Senior Executive Over 40,000 Junior Executive 25,000 - 35,000 Senior Secretarial 18,000 - 25,000 Clerical 10,000 - 15,000 Junior 5,000 - 10,000 Domestic 4,000 - 6,000
In unionized workplaces, pay rates are determined by collective bargaining, but in other cases, they are fixed by individual negotiations. Employers are prohibited from discriminating on the grounds of race, origin, political opinion, color, or creed.
NATIONAL INSURANCE AND FRINGE BENEFITS
A national insurance (social security) contribution is made for all employed and self-employed people, in return for which they and their families are entitled to medical and hospital benefits, as well as to various retirement pension and other state allowances, but not to unemployment benefits. Employers often arrange medical insurance for their employees and bear part of the premium costs. Benefits given in other countries, such as free meals or subsidized housing, are not generally provided in the Bahamas.
Costs of national insurance contributions, paid vacations, holidays, and other benefits can add about 20% to an employer's basic payroll cost.
TERMINATION OF EMPLOYMENT
Employees are not legally entitled to receive notice if their employment is being terminated, but it is normal for any individual who has served an employer for more than one year to be given one pay period's notice (generally, at least two weeks). In addition, the employee must be paid for all accrued vacations, but no other form of severance pay is given. When employment is terminated before the end of one year, the employee is entitled to vacation pay of 4% of wages paid to date, provided that the employment has lasted for thirty days or more.
Employers are not required to follow any formal procedures before terminating employment, although it is prudent to consult with the Labour Board first. Discharged employees may appeal to the Ministry of Labour if they believe the dismissal was unjust, but generally it is not difficult to terminate employment.
UNIONS
Labor unions are organized by industry rather than by craft. About 30% of the work force is unionized, particularly in the hotel, shipping, and allied industries. Union membership is not obligatory. Strikes and labor unrest are rare and industrial relations on the whole are good, the unions being effective in their negotiations with employers and in controlling their own members.
Because of the importance of tourism, good labor relations are vital to the islands' economy, and the Ministry of Labour acts as an intermediary when required in labor contract negotiations.
EMPLOYEES' INFLUENCE ON MANAGEMENT
Works councils or similar bodies representing employees' interests need not be formed in individual workplaces, nor do employees have rights to participate in management by appointing representatives to the board of directors or by vetoing or otherwise influencing management decisions.
EMPLOYMENT OF FOREIGNERS
Foreign individuals wishing to engage in business or trade in the islands must have permits issued by the Immigration Department. Before a foreign employee may start work, his or her employer must apply for and obtain a work permit. Work permits are normally issued by the Immigration Department for one-year periods, although for senior executives three-year permits may be granted. Fees are payable on the issue of a work permit; these fees range from B$250 to B$7,500 per year, depending on the position applied for. A work permit allows the individual to whom it was issued to work only for the organization that applied for it.
The government's policy with respect to both Bahamian- and foreign-owned enterprises is to advance Bahamian nationals to positions of administrative and managerial responsibility, and an employer seeking to import non-Bahamian staff must satisfy the government that:
- It has attempted by newspaper advertisement and reference to the labor exchanges, but without success, to find a suitably qualified Bahamian for the position.
- It is implementing a program to train Bahamian nationals to be able to take the position in question.
It follows that permits are not usually issued for unskilled individuals. Nevertheless, the government recognizes that foreign investors must fill some key positions with foreign employees and will guarantee the issuance of work permits in proportion to the size, scope, and type of business, provided that the prospective employee fulfills normal immigration requirements. Individuals such as skilled workers, senior bank officials, and hotel managers are usually granted work permits without much delay. An enterprise is not required to employ a maximum number of foreigners or a minimum number of Bahamian nationals.
Individuals who want to reside in the Bahamas without being gainfully employed in the islands (for example, a foreign employee's spouse and children) must obtain a residence permit from the Immigration Department. Individuals who have work permits do not need residence permits. An annual residence permit for a head of household costs B$1,000 and for each dependent, B$20. Bahamian nationality is rarely granted to foreigners. To be granted permanent residence, an individual may have to meet specific criteria (for example, the individual may have to invest at least B$250,000 in a residence or make a similar investment in the Bahamas).
Individuals intending to stay in the Bahamas should ensure that they have all the necessary permits and on arrival should register with the consular officials of their home countries. They should also consult with professional advisers on future tax considerations in light of the relocation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
