Expanding your company on a global scale entails managing a series of complicated employment regulations — many of which will differ drastically from your own laws at home. Working around these differences can add layers of complexity and risk to your global expansion.
Globalization Partners is here to offer a trusted solution. As a global PEO, also known as an Employer of Record, we offer a simplified way to grow your business overseas. When you partner with our team, you can benefit from the expertise of our legal and HR staff, keeping your company compliant and employees content. As an Employer of Record in Kiribati, we’ll help you locate and hire top-tier talent while taking all the risk of employment compliance on our shoulders.
Doing Business in Kiribati
Kiribati is a remote Pacific country taking strides to advance economically and expand its limited industries into new markets. While the country’s location has posed a challenge in the past, Kiribati has seen burgeoning growth in the tourism industry, which now accounts for approximately one-fifth of the local gross domestic product (GDP). Natural resources and an array of international corporate partnerships make this nation a vibrant place for your company to grow.
Employment contracts must be comprehensive and include a clearly defined and agreed-upon determination regarding many areas of employment, including wages, annual leave, sick leave entitlement and pay, and any repatriation conditions. Contracts should also identify the nature of the employment, its duration, and the appropriate period of termination notice required. Workers under the age of 18 are not allowed to enter into a formal employment contract.
Local labor laws establish a workweek of 40 hours but leave the determination of weekly maximums or minimums up to individual employment contracts. You must submit these contracts to the Ministry of Labor and Human Resources Development for documentation. Generally, employees in the public sector work an average of 36.25 hours each week and receive overtime pay for any additional hours. There are currently no laws governing the amount of overtime an employee can work.
Employees are entitled to a maximum of 30 days of annual leave paid at their normal rate for each completed year of service. After the first six months of employment with your company, they can take annual leave on a pro-rata basis. If their absence falls on any public holiday, these days should not be included in their vacation time.
After working for your company for six months or longer, an employee is entitled to paid sick leave of up to 20 working days per year of service. To qualify for paid sick leave, an employee must:
Notify you as soon as reasonably possible to explain their absence.
Produce upon request, a written record of their illness signed by a medical practitioner.
Employees with more than six months of service are also entitled to three days of paid compassionate leave each year for serious illness, injury, or the death of a family member.
Locals in Kiribati celebrate various public holidays throughout the year, including:
- Women’s Day.
- Independence Day.
- National Youth Day.
- Teacher’s Day.
- Human Rights and Peace Day.
- Boxing Day.
- Good Friday, Easter, and Easter Monday.
- National Health Day.
- Gospel Day.
- Senior Citizen’s Day.
- National Culture Day.
On public holidays, employees are entitled to be absent from the workplace and still receive full pay for the day. If an employee is required to work on a holiday, they must earn their regular wages and extra pay.
Female employees are entitled to up to 12 weeks of paid maternity leave. This includes a maximum of six weeks before delivery and a minimum of six weeks after. Maternity leave applies to all female workers with an official contract of employment, including immigrants and apprentices. You cannot dismiss female employees who are absent on maternity leave or as a result of a pregnancy-related illness until their absence has exceeded 12 weeks.
There are no laws requiring you to provide paid or unpaid paternity leave.
There is no national public health insurance or private health insurance scheme. Instead, the government provides all health services free of charge to all residents, leaving little to no out-of-pocket health expenditure costs. Tourists and travelers from abroad are charged for any medical services.
Residents must pay income tax of up to 25% on their first 28,500 Australian dollars (AUD) earned. Any income beyond this amount is taxed at 35%. As a local employer, it’s easiest to pay employee taxes and social security payments straight from their salaries.
Termination and Severance
Lawful termination of employment has several stipulations, including your obligation to provide a written copy of any reasons for the termination. Legal qualifications for termination include:
- An employee’s inability to perform the job’s required tasks to a reasonable standard of performance.
- An employee’s inappropriate workplace conduct.
- An employer’s reduced operational requirements.
You aren’t required to provide a written termination letter to employees working on a fixed-term or task-based basis who have completed their required time or task.
If any employee has been employed for less than a year, you must give them a one-week termination notice. Less than three years of employment warrants a two-week notice, while employment of five years requires a four-week notice period. If you initiate a termination effective immediately, you can provide severance payment in lieu of notice. You are required to pay all wages and benefits due, including any accrued but untaken annual leave, by the end of the next workday.
Benefits and Bonuses
Kiribati’s labor laws don’t require you to give any specific bonuses or benefits to employees. Instead, you have the option to offer benefits — such as food, transportation, or annual bonuses — to encourage employee satisfaction. Consider offering supplemental benefits as these can attract top candidates and encourage longevity.
Choose Globalization Partners When You Expand Your Business to Kiribati
Globalization Partners provides essential global PEO services to companies when they need it most. Through our comprehensive Employer of Record model, you can complete your global expansion in Kiribati without the burden of legal compliance. Our in-country expertise and legal resources will support your company through every stage of expansion, so you can continue putting your efforts into running your business.
Reach out today to learn more about how our global PEO services can help your company expand around the globe.