Developing a successful company is a rewarding experience, and when you realize this success, you might be ready to take the next step — expanding to a new country. Taking your company...
Read MoreDeveloping a successful company is a rewarding experience, and when you realize this success, you might be ready to take the next step — expanding to a new country. Taking your company abroad can result in larger-scale accomplishments, but the process comes with challenges.
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Developing a successful company is a rewarding experience, and when you realize this success, you might be ready to take the next step — expanding to a new country. Taking your company abroad can result in larger-scale accomplishments, but the process comes with challenges.
Globalization Partners gives you the expert support you need for a successful expansion. With our EOR model, we offer guidance from hiring and onboarding to payroll and benefits management. Our team of HR and legal professionals ensures you have a dedicated workforce and compliant company.
As your EOR, we hire your employees through our subsidiary. You sidestep the entity establishment process while we provide the resources you need for compliant payroll and employment contracts. With our connection to over 180 countries, we can take your company anywhere you’d like to go. Tonga is one of many countries that can help companies expand, and it offers promise for yours.
The Kingdom of Tonga has an agriculture-based economy that also operates on a small mining industry and various types of manufacturing. While the nation consists of about 170 islands, only 36 of them are inhabited.
With sound infrastructure and social services, the country offers growth opportunities for new companies. The nation joined the International Labor Organization (ILO) in 2016, putting employee rights at the forefront of its development.
When you expand to the country, you can lower unemployment rates, encourage new training programs, and bolster economic development. As the country transitions into an era of employee rights advancement, you need to pay close attention to changing labor laws.
In September 2020, the Tongan government enacted the Employment Relations Bill to establish a legal framework governing employment in the country.
Tonga’s employment compliance laws require that contracts be in writing for employment with a duration of two months or longer. Employment contracts should include any regulations relating to a position, such as:
Since becoming an ILO member, the country recognizes the organization’s pillars of employment rights, including collective bargaining. When you hire Tongan employees, you can negotiate employment terms to provide based on worker needs.
Tonga’s 2020 Employment Relations Bill limits regular hours of work to eight hours per day and 40 hours per week. Workers are entitled to at least one full day of rest each week. Overtime is permitted and paid at a rate of 125% of the employee’s regular wage. Total time worked in any given week cannot exceed 48 hours, including regular and overtime work, except in special circumstances.
After one year of employment, workers are entitled to 12 days of paid annual leave, in addition to public holidays. Employers must allow their employees to take all of their annual leave in one period, or if the employee prefers, in two periods or more, with one period being at least one week.
The Public Holidays Act details 10 holidays for which employees receive a day off. These days are:
The king can determine any additional public holidays in the year, and you should recognize these as days off. If any public holidays fall on a Sunday, the day off should occur on the following Monday. These days do not need to be paid, though you may choose to provide wages.
Female employees are entitled to a period of 30 consecutive working days of maternity leave. 15 of those days must be taken after the employee gives birth. Employers may agree to a longer period of leave or that the leave will be paid.
Compliance regulations on termination and severance are outlined in the country’s 2020 Employment Relations Bill. You can set notice and termination policies in your employment contracts and through collective bargaining. You may also choose to provide severance packages for specific grounds of termination.
The Retirement Fund Board provides funding for retirement-age workers, though it can offer an early release benefit in the correct circumstances. Employees may apply for early release if they’re terminated for redundancy, migration, certified health reasons, or financial hardship.
Tonga has a tiered income tax system with tax rates starting at 0 percent and ending at 25 percent. With the Pay As You Earn (PAYE) model, you are responsible for deducting these taxes. There are also taxes for the Retirement Fund Board, and you and your employees contribute to this fund at 5 percent of the employee’s earnings.
The government supports a majority of the country’s health care system along with donor support, allowing citizens to pay little to nothing for care. The nation has one of the highest levels of health in the Pacific because of its significant funding for care.
There are no regulations regarding private health insurance provisions by employers. With most of the care supported by public funding, private insurance is not common, though you may choose to provide it within your company.
There are no bonuses or additional benefits outlined in the country’s labor laws. You may choose to provide more for your employees through employment contracts and collective bargaining.
As an EOR in Tonga, we ensure you provide the minimum requirements and more for your employees. Work with our HR and legal experts to understand a shift in employee rights and keep your company compliant.
Our services are a cost-effective and comprehensive solution for your global expansion. Allow us to take care of the details while you focus on the big picture — growing your company. Don’t let borders be boundaries. Reach out to our team today to learn more about our services.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
