Labor force and Employee

Labor, social security and pension regulations

Currently legislation is being finalized to modernize Aruban labor laws. The information below is based on the current situation. The labor force on Aruba is estimated at approximately 55.000. There are statutory mini¬mum wages for workers aged 18 years and older. The present monthly entry level minimum wages, by category (not including benefits) in 2013, based on a 40 hour workweek is AWG. 1,636.70 (USD 914.35) for business and AWG. 763.55 (USD 428.96) for domestic personnel. The standard legal working hours are normally 8 per day and 40 per week. At least 15 working days annual vacation must be given with pay, and 11 paid public holidays are also granted.

Labor Agreement

The labor agreement is the contract whereby one party, the employee undertakes to work for the other party, the employer, against pay, for a certain time employment. Collective labor agreements usually cover a period of two to three years, after which new terms are agreed upon for a similar period of time. The reliability provided by these contracts benefits both the employer and employee. In most cases there is a clause which provides for no strikes or lockouts during the contract period. All labor disputes where parties do not reach an agreement must be subjected to mediation. Parties may request intervention, or the mediator can ex-officio compel parties to accept mediation. The government has the authority to impose a ‘cooling off’ period.

Social Security Regulations

AOV/AWW (General insurance for Old Age / Widow and Orphans)
The AOV/AWW premium is paid by employee and employer. The AOV/AWW premium amounts to 13.5%. The premium is paid by the employer (9.5%) and by the employee (4%). The aforementioned percentages are to be calculated over the premium income which is maximized at AWG. 65,052 (USD 36,342) and is only due until the employee reaches the age of 60.

General Health Insurance (AZV)
The AZV premium is paid by the employee and the employer. The AZV premium is 11.5%. The premium is paid by the employer (8.9%) and by the employee (2.6%). The aforementioned percentages are to be calculated over the premium income which is maximized at AWG. 85,000 (USD 47,486).

Sickness and Accident Insurance Premium
This premium is only paid by the employer. The percentage for sickness insurance is 2.65%. The percentage for accident insurance varies from 0.25% up to 2.5%, depending on the risk involved at the job.

Compulsory Pension

All employees are required by law to be insured for a private pension. The pensions insurances of normal employees should be insured at local insurance companies and company pension funds. Shareholders who also manage their own companies can build up their pension within the company. Employers are required to contribute to the pension plan as well. The minimum pension premium at the moment is 4% divided equally between the employer and the employee. For 2014 the minimum premiums will become 6%.

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