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Frequently Asked Questions (FAQs)

This section provides an overview of frequently asked questions associated with the Labour Act (2021 Revision) and the National Pensions Act (2012 Revision).

Labour Act (2021 Revision)

Below is the first part of the FAQ questions connected to the Labour legislation:

When should an employee expect to receive a written statement of working conditions once he/she has commenced employment?

Within 10 working days (Please refer to s6 of the Labour Act for conditions and offence)

What has the Act defined as the initial probation?

A term not more than 6 months initially, which can be extended to a further 6 months provided that such agreement is in writing and signed by both the employee and employer unless otherwise stated in a contract (i.e. 3 months).

When does an employee begin accruing benefits?

At the commencement of employment; however, not payable until after the probation period has been satisfied and the employee’s employment is confirmed.

What is the notice period required for termination of employment?

The Act requires that both parties give written notification of termination of employment of at least 24 hours if on probation.

With respect to all other employees, the employer is required to give written notice at least equal to the interval of time between the employee’s pay days. The employee is required to give the period of notice required by his contact of employment. However, in the absence of a contract the employee is required to give notice in the intervals of time between his pay days or thirty days, whichever is less. (Sections 10 & 11)

What is the vacation entitlement as defined by the Labour Act?

Not exceeding 4 completed years - 2 weeks
Exceeding 4 but not exceeding -10 completed years - 3 weeks
Exceeding 10 completed years - 4 weeks (Section 14)

Are Part‑time (PT) employees entitled to leave benefits?

Yes, PT employees earn leave benefits (i.e. vacation), at the ratio that their actual hours of employment bear to the standard work week.

What is the maternity entitlement as defined by the Labour Act once an employee has completed 12 months of employment?

Every female employee is entitled to twelve calendar weeks’ in any twelve month period.
First 20 days - Employee’s basic wage
Next 20 days - At half the employee’s basic wage (Section 19)

Does the Labour Act address Paternity leave?

No, it does not.

If an employee works on a public holiday what payment is he entitled to?

Double his normal rate of pay for the hours actually worked and where he works less than the full day he shall, in addition, be entitled to be paid his normal rate for the remaining hours. (Section 17)

How is an employee compensated for public holidays (PH) not worked by the employee?

The employee is to receive the normal wage he would have received had it not been a public holiday and given the employee has worked his scheduled day immediately before the PH and his scheduled day immediately after the PH. (Section 16)

What is the sick leave entitlement as defined by the Labour Act?

For the first ten days of sick leave taken during any period of twelve consecutive months, calculated from the date of commencement of employment and any anniversary date thereof, an employee shall be paid the basic wage which he would have received had he worked on those days. (Section 17)

When is an employee required to produce a doctor’s certificate?

In respect of the third and any subsequent consecutive days of such leave. (Section 17)

In the event the employee resigns, is sick leave payable if not utilized during the current employment year?

No, it is not. Sick leave is available to the employee in the event he is ill or otherwise physically incapacitated for work.

What is the rest period permitted to each employee as per the Act?

24 consecutive hours in every 7 day period. (Section 23)

In addition to the above, every employer who is classified as construction, manufacturing, heavy equipment operators, hospitality, and gardening or landscaping is to permit each hourly paid employee the following breaks:

(a) 3-5 hours—a minimum of 15 minute break

(b) 5 and above—a minimum of (2) 15 minute breaks

Are Employees to whom the foregoing applies entitled to be paid for the 30 minute meal break?

Employees who are entitled as per the foregoing would be entitled to receive payment for the 15 minutes breaks, however, not for the meal break. (Section 23(2))

What is the maximum standard work day and work week as defined by the Labour Act?

9hrs a day and 45hrs a week (Section 24)

When is overtime payable and at what rate?

An employer shall pay overtime pay to an employee for every hour of work in excess of the standard work week or a standard work day. Overtime pay shall, unless the employer and the employee agree in writing to the contrary, consist of at least one-an-one half times an employee's basic hourly wage per hour (Section 25 and 27)

When are wages payable?

Wages shall be paid on a regular periodic basis on ordinary working days with not more than one month between pay days. (Section 30)

Are employees entitled to a statement of wage?

An employer shall, in respect of any given wage or gratuity payment, within one week of the making of the payment, furnish that employee forthwith with a precise statement in writing showing how the said payment was made up. (Section 33)

What should the pay statement include?

The statement should show precisely how the payment is made up (i.e. hours worked, any deductions from salary for health/pensions etc.).

How long does an employee have to file a complaint of “Unfair Dismissal”?

Within 90 days of the dismissal date. (Section 54)

When is an employee entitled to severance pay?

Upon termination for any reason other than a dismissal pursuant to S51 (1) (a-c), providing the employee has exceeded one year of continuous employment.

How is severance pay calculated?

Severance pay shall consist of one week's wages, at the employee's latest basic wage, for each completed twelve-month period of his employment with his employer and any predecessor-employer.

Is it acceptable for an employer to charge employees for drinking water and withold seating from an employee?

No, it is not. The employer is to ensure that there is adequate drinking water available to all employees and to also provide and maintain seating facilities, reasonable under the circumstances for employees to site during the course of their employment. (

Is my employer obligated to provide and maintain a First Aid Kit at work?

Yes, The Act obligates the employer to do so and to ensure that it is maintained.

Are employees entitled to compassionate leave under the Labour Act and if so, what is the entitlement and what are the conditions that apply?

Every employee to whom Part II (Leave) of the Labour Act applies shall, in addition to any entitlement to earned vacation leave, be entitled (during each twelve month period of employment) to a maximum of five days compassionate leave on the occurrence of a death or serious illness in the employee’s immediate family provided reasonable evidence of such serious illness or death is provided to the employer; and for the purposes of this entitlement the employee’s immediate family means the spouse, parents and children of the employee.

For more information, please click here to view our FAQ Brochures.

National Pensions Act (2012) National Pensions (Amendment) Act, 2016

Below is the second part of the FAQ questions connected to the National Pensions Act:

As an Employer, do I have to provide a pension plan for my employees?

Yes, participation in a pension plan is mandatory, during these periods when a pension holiday is not in effect. Employers must provide a pension plan for those eligible employees and can be subject to summary conviction and a fine, if they are found to be in non-compliance with the NPA. Additional information is available on our website,

Who must participate in a Pension Plan?

All Caymanian and Permanent Resident employees between 18 and 65 years of age are pensionable immediately, regardless of any probationary periods.
The only exception are:

Caymanians;
under the age of 23 years old; and
pursuing full time education.

Please note that all three of the above criteria must be true at the same time.
Non-Caymanian employees between 18 and 65 years of age are pensionable, after they have completed nine (9) months of employment in the Islands. Please note that the nine months is not required to be with a specific company. Additionally, once the nine months are completed, then any future probationary periods do not impact the start of the employee’s pensionable period.

Where can I find plan for my employees?

Employers may register their own plan with the DLP or participate in one of the registered Multiemployer Pension Plans.

Who offers a pension plan?

Employers may register their own plan with the DLP or participate in one of the following registered Multi-Employer Pensions Plans:

• BAF Pension Plan - (345) 949-5811 (Email: cayman@mybafsolutions.com)
• Coralisle Pension Services CG BritCay - (345) 949-8699
(Email: pensions_ky@cgcoralisle.com)
• Cayman National Trust - (345) 640-9263 (Email: pensions@cnifs.com)
• Chamber of Commerce - (345) 745-7630 (Email: admin@pensions.ky)
• Fidelity - (345) 746-6010 (Email: pensionsky@rfgroup.com
• Island Heritage – (345) 814-7309 (Email: retirement@islandheritage.com.ky)
• Silver Thatch - (345) 943-7770 (Email: support@silverthatch.org.ky)

As an employer, how much must I contribute?

The total contributions paid to the pension plan administrator must be 10% of the employee’s earnings, of which 5% may be deducted from the employee. At the minimum, an employer must contribute 5% of an employee’s earnings, up to the year’s maximum pensionable earnings of CI$87,000. Self-employed persons must contribute a minimum of 10% of their pensionable earnings to a registered pension plan.

Does the employee have to contribute?

In consultation with the employees, the employer selects the pension plan to be utilized. The employee may contribute a maximum of 5% of their earnings up to the year’s maximum pensionable earnings of $87,000.

Together, the employer and employee contributions must total at least 10% of pensionable earnings. Pensionable earnings are defined to include wages, salary, leave pay, commissions, bonus (with exceptions) and gratuities. It is the employer’s responsibility to deduct and submit the pension contributions to the selected pension plan.

When are the contributions due and payable?

Both the employer and employee contributions must be paid by the 15th of the month immediately following the month to which the contributions pertain. For example, any contributions deducted or collected in April must be paid by May 15.

Late payments are subject to interest which is calculated at the current Prime Rate plus 5% (enshrined in the NPA). This interest calculation begins the day after the contributions are due, in our example that would be May 16.

In addition, if the Director has directed an employer to pay arrears within two weeks and if they fail to comply, the employer may be liable to a fine of $500 for each day that the contributions are in arrears.

Can an employee make contributions to their pension plan more than the 5% that is deducted from their pay?

YES. Additional Voluntary Contribution means a contribution to a pension fund by a member in excess of the amount the member is required to contribute (ie: 5%).

Can employers agree to pay pension contributions directly to an employee rather than paying it into a pension plan?

Under the National Pensions Act, the employer has a legal requirement to pay the contributions to the selected pension plan. As a result, the employer cannot agree to pay the pension contributions directly to the employee.

If an employee refuses to contribute to his pension plan, what should the employer do?

A: The employer has the legal right to withdraw up to 5% from the employee’s earnings in order to pay the required monthly pension contributions. The employee does not have the right to refuse to participate in the pension plan and the employer should make the permissible deduction and pay 10% to the pension plan.

What is the retirement age?

The National Pensions (Amendment) Act, 2016 replaced the term, “normal retirement age”, with the new term, “normal age of pension entitlement” as the Government recognized that employers were incorrectly treating the normal retirement age (60) in the National Pensions Act, as the time when employees must stop working, which is not the intent. The age is simply the time when a member may access their pension benefits under the NPA. The normal age of pension entitlement is now 65 years of age, as per the National Pensions (Amendment) Act, 2016.

What if I change employers and they have a different pension plan?

In this circumstance, you have the option of leaving the pension contributions in the original plan or subject to approval, you may have the money transferred into the new plan. Either way you will be required to join and begin contributing to the new plan.

When is an employee entitled to a refund?

With effect from 31st December, 2019, members are no longer able to obtain a pension refund except under very limited circumstances, as per the National Pensions (Amendment) Act, 2016.

How can I check to see how much money is in my pension account?

Please contact the Pension Plan Administrator in order to obtain information about your account balance. You can refer to the list above or check the DLP’s website.

How often am I entitled to receive a pension statement?

Members are entitled to receive statements, at least, on a semi-annual basis. Some pension plan administrators issue statements more frequently and/or have online access to provide more information to members.

For more information, please click here to view our FAQ Brochures.

National Minimum Wage (going into effect 1 January 2026)

Below are FAQ's connected to the National Minimum Wage:

How much is the National Minimum Basic Wage?

Starting 1 January 2026, the National Minimum Basic Wage in the Cayman Islands will be CI$8.75 per hour (before deductions).

When does the National Minimum Basic Wage officially come into effect?

1 January 2026.

Is the National Minimum Basic Wage figure what an employee would earn before health and pension deductions?

Yes, this is the rate before applicable pension and health insurance deductions.

Is every employer required to pay the National Minimum Basic Wage?

Every employer must pay at least the National Minimum Basic Wage, unless they are exempted.

Does the National Minimum Basic Wage apply to all industries and job types?

Yes, unless specifically exempted.

Who is exempted from being paid the National Minimum Basic Wage?

The National Minimum Basic Wage does not apply to:

Self-employed persons
Juveniles (a person under the age of seventeen years, who is required by law to attend school)
Charitable Organisations (one registered and accepted as such by the Director of the Department of Labour and Pensions)
Churches

Are there special calculations for certain job types?

Yes. There are special calculations for:

Service Employees who work for an employer with a registered gratuities scheme that has been approved in writing by the Director of the Department of Labour and Pensions (DLP)
Live-in Household Domestics'
Employees working on a Commission Basis

What are the special calculations for paying the National Minimum Basic Wage?

For Service Employees: No more than 25% of the National Minimum Basic Wage (CI$2.19 per hour) can be counted from gratuities. Importantly, employees are still entitled to keep all gratuities they earn, on top of their regular wages.

For Live-in Household Domestics: Employers may apply up to 25% of the National Minimum Basic Wage (no more than CI$2.19 per hour) as a credit for accommodations and utilities. This means the minimum cash wage that must be paid to a live-in domestic worker is CI$6.56 per hour. This credit applies only to live-in household domestics.

For Commission Based Employee: No more than 25% of the National Minimum Basic Wage (up to CI$2.19 per hour) can can be counted from commission. Importantly, employees are still entitled to receive all commissions they earn, on top of their regular wages.

What about household employers who provide food and other items in addition to accommodations for their live-in domestic employees?

The 25% or CI$2.19 in-kind credit applies to the provision of accommodations and utilities only.

Do gratuities count toward the National Minimum Basic Wage?

Only employers with a gratuities scheme that has been registered and approved in writing by the Director of the Department of Labour and Pensions (DLP) may count gratuities toward the National Minimum Basic Wage. However, gratuities can account for no more than 25% of the National Minimum Basic Wage (CI$2.19 per hour).

Does the National Minimum Basic Wage apply to part time employees?

Yes, unless that person falls under one of the exempted categories.

What happens if an employer does not pay the National Minimum Basic Wage?

Employers can be fined up to CI$2,500 and/or a prison term of up to six months for a first offence.

For a second or any further offence, the penalty increases to a fine of up to CI$5,000 and/or imprisonment for up to twelve months.

Who enforces the National Minimum Basic Wage and how can violations be reported?

Enforcement will be carried out by the Department of Labour and Pensions, supported by a team of inspectors. Employees or the public may contact the Department directly at 945-8960 for inquiries or assistance.

Additionally, a confidential labour tip line is available at 945-3073 for employees to report any violations or breaches committed by their employer.

How does this change to the National Minimum Basic Wage affect overtime?

Overtime is always calculated at one and a half times an employee's normal hourly rate.

This means that if an employee is earning the National Minimum Basic Wage of Cl$8.75 per hour, the minimum overtime rate will be CI$13.13 per hour. E.g. CI$8.75 per hour x 1.5 = CI$13.13 per hour.

If an employee's regular rate of pay is higher than the minimum wage, their overtime rate will also be higher, since it must be based on their actual hourly rate. E.g. If you are paid CI$17.00 per hour, CI$17.00 per hour x 1.5 = CI$25.50 per hour for any overtime worked.

The only exception is if an overtime waiver has been agreed between the employer and employee and approved by a Labour Tribunal.

How is leave calculated in relation to the National Minimum Basic Wage?

All workers-including service staff, live-in domestic helpers, and commission-based employees-must be paid at least the National Minimum Basic Wage when on leave (sick, vacation, maternity, etc.). For live-in domestic helpers, if part of their wage is counted as housing and utilities (for example, in-kind CI$2.19 per hour), the cash portion of their leave pay must still be at least CI$6.56 per hour to reach the minimum wage of Cl$8.75 per hour.

Why is the minimum wage necessary in the Cayman Islands?

The Government has a social and moral duty to protect people's well-being and prevent unfair treatment at work. A minimum wage helps ensure that the lowest-paid workers earn enough to reduce hardship and avoid economic vulnerability. It is a key tool to improve living standards and promote fairness in the Cayman Islands.

How was the $8.75 amount determined?

A 16-member Minimum Wage Advisory Committee, made up of employers, employees, and independent representatives, agreed on CI$8.75 per hour after careful review and discussion. The Economics and Statistics Office calculated a lower limit of CI$6.44 per hour (based on the poverty and vulnerability line), while businesses said they could pay up to Cl$9.00 per hour. The final amount of CI$8.75 was chosen as a fair balance. For full details, see pages 10-12 of the Minimum Wage Advisory Committee's Final Report.

Where can I get more information or clarification about the National Minimum Basic Wage?

You can find the Minimum Wage Advisory Committee's Final report on the Economics and Statistics Office website www.eso.ky under Other Reports.

For more information or enforcement matters, please contact the Department of Labour and Pensions at +1(345)945-8960. Employees can also utilise a confidential tip line 945-3073 to report any suspected breaches of the Labour Act.

Follow DLP on Facebook, Linkedin and Instagram for updates, announcements, and additional information.

How can I figure out the hourly rate for my monthly salary?

Start with the employee's monthly gross salary (before health insurance and pension are deducted).
Multiply it by 12 to get the yearly salary.
Multiply the employee's normal weekly hours by 52 to get total yearly hours.
Divide the yearly salary by the yearly hours to find the hourly rate.

This hourly rate must be at least Cl$8.75.

For more information, please click here to view our FAQ Brochures.

Frequently Asked Questions - Department of Labour and Pensions

Frequently Asked Questions (FAQs)

Labour Act (2021 Revision)

National Pensions Act (2012) National Pensions (Amendment) Act, 2016

National Minimum Wage (going into effect 1 January 2026)

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