Employer of Record in Aruba

An Employer of Record (EOR) in Aruba is a company that legally hires employees on your behalf. This lets you build a team in Aruba without setting up your own local company. The EOR handles all the formal employment tasks. This allows you to focus on managing your team's day to day work. For companies looking to hire in Aruba, an EOR like Rivermate simplifies the process.

How an Employer of Record (EOR) Works in Aruba

Using an EOR in Aruba streamlines the hiring process. You find the talent, and the EOR does the rest. Here is how it generally works:

• You Find the Talent. You recruit and select the person you want to hire in Aruba.
• The EOR Hires Them. The EOR legally hires the employee for you, putting them on their local, compliant payroll.
• Contracts are Managed. The EOR creates a legally compliant employment contract that follows Aruban labor laws. You can find more information on labor regulations from the Department of Labor and Investigation (DAO) at https://www.dao.aw/.
• Onboarding is Handled. The EOR manages all the necessary paperwork and onboarding tasks.
• Payroll and Benefits are Administered. The EOR takes care of salary, taxes, social security, and benefits.
• You Manage Your Employee. The employee works for your company, and you manage their daily tasks and projects.

Why use an Employer of Record in Aruba

Expanding into a new country presents challenges. Aruba's employment laws, based on the Dutch legal system, are strict. An EOR helps you navigate these complexities. It is often the fastest and most cost effective way to hire in Aruba.

Here are some key reasons to use an EOR:

• Simplified Market Entry. You can hire employees quickly without the cost and time of setting up a local entity.
• Compliance Assurance. An EOR ensures you follow all of Aruba's labor laws and tax regulations, minimizing legal risks. Terminating an employee in Aruba, for example, requires government approval, and an EOR manages this process.
• Cost-Effective Expansion. Avoid the significant financial and administrative burdens of incorporating a new company.
• Local Expertise. EORs have deep knowledge of the local labor market, helping you offer competitive benefits and manage employee relations.
• Focus on Your Business. You can delegate HR, payroll, and administrative tasks to the EOR, allowing you to concentrate on your core business goals.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Aruba includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Aruba.

Hiring in Aruba is straightforward when you understand the local labor laws. The legal system is based on Dutch law, providing strong protections for employees. This means you need to pay close attention to contracts, working hours, and termination procedures to stay compliant.

Employment contracts & must-have clauses

You must provide employees in Aruba with a written employment contract. This applies to permanent, temporary, and fixed-term roles. The contract is the foundation of your working relationship and should be clear to avoid future disputes.

While Aruban law recognizes both indefinite and fixed-term contracts, there are restrictions on using fixed-term agreements.

Your employment contracts must include these essential clauses:

• Identification of Parties: Full names and addresses of both the employer and the employee.
• Job Details: A clear description of the employee's duties and title.
• Compensation: The salary or wage, and any other compensation.
• Working Hours: The expected hours of work.
• Contract Duration: The start date and, if applicable, the end date for fixed-term contracts.

Probation periods

You can include a probationary period in an employment contract. This period allows both you and the employee to see if the fit is right.

• Maximum Duration: The trial period cannot be longer than two months.
• In Writing: The probation period must be agreed upon in writing within the contract.
• Termination: During this period, either you or the employee can terminate the contract immediately without giving a reason.

Working hours & overtime

Working hours in Aruba are regulated to protect employees.

Any work done beyond these standard hours is considered overtime. You must compensate employees for overtime at a higher rate.

• Monday through Saturday: 150% of the regular hourly wage.
• Sunday: 200% of the regular hourly wage.
• Public Holidays: 200% of the regular hourly wage.

Public & regional holidays

Employees in Aruba are entitled to paid time off for public holidays. There are 11 official public holidays.

• New Year's Day (January 1)
• Betico Croes Day (January 25)
• Carnival Monday (Monday before Ash Wednesday)
• National Anthem & Flag Day (March 18)
• Good Friday
• Easter Monday
• King's Day (April 27)
• Labor Day (May 1)
• Ascension Day
• Christmas Day (December 25)
• Boxing Day (December 26)

Hiring contractors in Aruba

Hiring independent contractors in Aruba gives you flexibility. You can access specialized skills without the long-term commitments of employment. However, you need to classify workers correctly.

An independent contractor is self-employed. They control their own work, use their own tools, and are responsible for their own taxes and social security contributions. You are not responsible for withholding their taxes.

Misclassifying an employee as a contractor to avoid employer obligations can lead to serious problems. If a worker is deemed to be an employee in practice, you could be liable for back taxes, unpaid benefits, and other penalties.

An Employer of Record (EOR) helps you avoid this risk. An EOR legally employs the worker on your behalf. The EOR handles all employer responsibilities, including:

• Compliant local contracts
• Payroll and tax withholding
• Statutory benefits

Using an EOR ensures your workers are classified correctly from the start. This lets you focus on your business while we handle the complexities of local labor law.

Setting up payroll in Aruba means understanding the local rules for paying your team. You need to know about typical salaries, required contributions, and how the tax system works. This ensures you pay your employees correctly and stay compliant with Aruban law.

Payroll cycles & wage structure

In Aruba, the most common payroll cycle is monthly. You will typically pay your employees once a month, often near the end of the month. While less common, some industries might use weekly or bi-weekly pay schedules.

When you pay your employees, you must provide a detailed payslip. This document should clearly show the gross salary, all deductions like taxes and social security, and the final net pay. Payments are almost always made by bank transfer.

Beyond the base salary, employees in Aruba often receive a holiday allowance, which is legally required. This is usually paid in May or June.

Overtime & minimums

For employees 18 and older, you must pay at least the legal minimum wage. As of January 1, 2024, the minimum wage is AWG 1,986.20 per month.

The standard work week is 40 hours, with a maximum of 8 hours per day.

Employer taxes and contributions

As an employer in Aruba, you are required to contribute to several social security funds. These contributions are calculated as a percentage of your employee's salary.

Employee taxes and deductions

Your employees also contribute to social security and pay income tax. You will withhold these amounts from their paychecks.

In Aruba, providing good benefits and leave is key to attracting and keeping great employees. It's not just about what's required by law. Many companies offer extra perks to stand out. Understanding the local rules helps you create a competitive benefits package. This shows your team you value their well-being and hard work.

Statutory leave

Aruban law sets minimum leave requirements for all employees.

• Annual Leave: You must give employees a minimum of 15 paid vacation days each year. This can increase based on an employee's length of service.
• Sick Leave: Employees are entitled to paid sick leave if they are unable to work due to illness or injury. You are required to pay a percentage of their regular wages for a specific period.
• Maternity Leave: Female employees get up to 12 weeks of paid maternity leave. This is typically taken before and after childbirth.
• Paternity Leave: Male employees are entitled to two days of paid leave after the birth of their child.

Public holidays & regional holidays

Employees in Aruba get a paid day off for public holidays. If they have to work, you must pay them a premium rate, often double their regular wage.

Typical supplemental benefits

Beyond the legal minimums, many employers in Aruba offer additional benefits to attract top talent.

Statutory Benefits

Non-Statutory (Supplemental) Benefits

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR acts as the legal employer for your team in Aruba. They handle all the administrative tasks, including benefits. This means they ensure you comply with all local labor laws.

Here's how an EOR can help:

• Compliance: They navigate Aruba's specific regulations for statutory benefits.
• Administration: They manage the enrollment and administration of all benefits plans.
• Local Expertise: They understand the local market and can help you create a competitive benefits package.
• Saves Time: You can focus on your business goals while the EOR handles the HR tasks.

Using an EOR makes it easier to hire and support employees in Aruba. You can be confident that your team is taken care of and that you are meeting all legal requirements.

Letting an employee go in Aruba involves specific rules you need to follow. The process depends on why you are terminating the employment. For urgent reasons, like theft or fraud, the dismissal is immediate. For other reasons, such as business economics or long-term illness, you generally need to get approval from the Department of Labor and Research (DAO). Understanding these local labor laws is key to a smooth and compliant offboarding process.

Notice periods

When you terminate an employment contract in Aruba, you must provide a minimum notice period. The length of this period depends on how long the employee has worked for you.

You must give this notice in writing. If the termination goes through the DAO, the time the procedure takes can be deducted from the notice period, but at least one month of notice must remain.

Severance pay

In Aruba, employees may be entitled to severance pay, sometimes called a "transition compensation". This applies when you terminate or choose not to renew an employment contract. The standard calculation is based on the employee's salary and years of service. Generally, it amounts to one-third of the monthly salary for each full year of service.

How Rivermate handles compliant exits

Navigating employee terminations in a different country can be complex. We handle the entire process to ensure it is compliant with Aruban law.

• Local Expertise: We understand the local labor laws and the steps required for a lawful termination.
• Documentation: We manage all the necessary paperwork and communication.
• Calculations: We accurately calculate final pay, including any required severance.
• Guidance: We guide you through every step, whether it's a termination for urgent cause or one that requires DAO approval.

We help you manage employee exits correctly and respectfully, protecting you from legal risks.

Navigating the visa and work permit process in Aruba requires careful planning. Your future employer plays a key role in your application. They must handle the paperwork and prove to the government that no local talent is available for your job. The main authority overseeing this process is the Directorate of Alien Integration, Policy and Admission (DIMAS). Work permits are typically granted for up to one year and are tied to your specific role with that single employer.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Aruba and sponsor your work permit. This is a practical route if your company doesn’t have its own legal entity on the island. The EOR takes on the legal responsibilities of hiring, managing payroll, and ensuring you comply with local employment laws.

Here’s what the sponsorship process generally looks like:

• Job Offer: You must have a formal job offer that details your position and salary.
• Labor Market Test: Your employer must first advertise the job locally to prove no qualified Aruban candidates are available.
• Application Submission: The employer then submits the work permit application to DIMAS on your behalf.

This process requires a team effort between you and your sponsoring employer. You will need to provide several personal documents, including:

• A valid passport
• A certificate of good conduct
• Medical certificates
• Proof of sufficient funds

Business travel compliance

You can visit Aruba for short-term business trips without a work permit. These trips are for specific activities like attending meetings or conferences. You cannot perform work for which you receive payment from an Aruban source during these visits.

For many nationalities, including citizens of the United States, Canada, and the European Union, a visa is not required for short stays. However, all visitors must complete an online Embarkation and Disembarkation (ED) Card before traveling.

Keep these key points in mind for business travel:

• Duration: Your stay as a tourist or business visitor is typically limited. For U.S. citizens, this can be up to 90 days without an extension.
• Purpose: Be clear about the purpose of your visit. You are there for business meetings, not to engage in local employment.
• Proof of Funds: You must be able to show that you can financially support yourself during your stay.