Rivermate | Brunei Darussalam flag

Brunei Darussalam

499 EUR per employee per month

Discover everything you need to know about Brunei Darussalam

Hire in Brunei Darussalam at a glance

Here ares some key facts regarding hiring in Brunei Darussalam

Capital
Bandar Seri Begawan
Currency
Brunei Dollar
Language
Malay
Population
437,479
GDP growth
0%
GDP world share
0%
Payroll frequency
Monthly
Working hours
44 hours/week

Overview in Brunei Darussalam

Read more

Brunei, located on Borneo Island in Southeast Asia, is a wealthy nation with a diverse terrain and a tropical equatorial climate. Historically significant, it was a powerful empire from the 15th to 17th centuries but declined due to internal strife and European colonialism, becoming a British protectorate in 1888 until its independence in 1984. Today, Brunei's economy is heavily reliant on its vast oil and gas reserves, making it one of Southeast Asia's richest countries.

The country is an absolute monarchy, with Sultan Hassanal Bolkiah serving as both head of state and government. Brunei's official religion is Islam, and it implements Sharia law alongside a secular legal system. The government plays a major role in the economy, providing extensive welfare programs, and there is no direct income tax for citizens.

Brunei's workforce is well-educated but faces challenges such as an aging population and reliance on foreign workers, particularly in technical and vocational sectors. The public sector is the largest employer, and the oil and gas industry is crucial to the economy. Efforts are underway to diversify the economy through sectors like technology, halal industries, and tourism.

Culturally, Brunei values indirect communication, hierarchical respect, and group consensus. The work culture is influenced by Islamic practices and family values, requiring adjustments in business interactions to accommodate religious and social norms.

Rivermate | bulb icon

Get a payroll calculation for Brunei Darussalam

Understand what the employment costs are that you have to consider when hiring Brunei Darussalam

Employer of Record Guide for Brunei Darussalam

Your step-by-step guide to hiring, compliance, and payroll management in Brunei Darussalam with EOR solutions.

Responsibilities of an Employer of Record

As an Employer of Record in Brunei Darussalam, Rivermate is responsible for:

  • Creating and managing the employment contracts
  • Running the monthly payroll
  • Providing local and global benefits
  • Ensuring 100% local compliance
  • Providing local HR support

Responsibilities of the company that hires the employee

As the company that hires the employee through the Employer of Record, you are responsible for:

  • Day-to-day management of the employee
  • Work assignments
  • Performance management
  • Training and development

Taxes in Brunei Darussalam

Read more

In Brunei Darussalam, employers have various tax obligations including Corporate Income Tax (CIT) at a rate of 18.5%, with the first BND 100,000 taxed at this rate and the next BND 150,000 at half this rate. Employers must also contribute to employee retirement funds, specifically the Tabung Amanah Pekerja (TAP) and the Supplemental Contributory Pension (SCP), at rates of 5% and 3.5% of an employee's basic salary, respectively. These contributions are generally not required for non-permanent resident foreign nationals.

Additional responsibilities may include withholding taxes for non-residents and managing property and customs duties. It's important for employers to stay updated with the Ministry of Finance and Economy for any changes in tax regulations and ensure compliance with filing and payment deadlines.

Brunei does not currently have personal income tax or a Value-Added Tax (VAT), though the potential for introducing VAT in the future exists. Employers should also be aware of various incentives available, such as Pioneer Status and Investment Tax Allowance, which provide tax exemptions and deductions for qualifying investments in specific sectors. These incentives often have strict eligibility criteria and require application and approval from relevant authorities.

Leave in Brunei Darussalam

Read more

In Brunei Darussalam, the Employment Order of 2009 outlines the regulations for vacation leave, termed as annual leave. Employees earn 7 days of paid annual leave for the first year of continuous service, with an additional day added for each subsequent year, up to a maximum of 14 days. Annual leave must be scheduled mutually between the employer and employee and used within 12 months of accruing, or it is forfeited.

Employees with shorter service durations receive pro-rated annual leave. Upon termination, employees are compensated for accrued but unused annual leave. Brunei also observes several national public holidays, including New Year's Day, Chinese New Year, National Day, and various Islamic holidays like Hari Raya Aidilfitri and Hari Raya Aidiladha, among others.

Other types of leave available to employees in Brunei include sick leave, with 14 days paid and up to 60 additional days for hospitalization; maternity leave, offering 15 weeks with varying pay conditions; and rest days, typically on Sundays. Paternity leave is not mandated but may be offered by some employers. Additional leaves like bereavement and religious observance leaves are subject to company policies.

Benefits in Brunei Darussalam

Read more

Brunei Darussalam's labor laws provide a comprehensive range of mandatory employee benefits, ensuring fair compensation and employee well-being. Key benefits include:

  • Paid Leave: Employees are entitled to annual leave, public holidays, sick leave, and maternity leave, with specific durations and conditions based on citizenship and employment duration.
  • Other Mandatory Benefits: These include a probationary period, notice period, overtime pay, and severance pay, with some employers offering a 13th-month bonus.
  • Social Security: Contributions are made to the Tabung Amanah Pekerja (TAP) and Supplementary Contributory Pension (SCP), providing retirement and disability benefits.

Additionally, many employers in Brunei offer optional benefits to enhance employee satisfaction and retention, such as:

  • Health and Life Insurance: Some companies provide health insurance, including coverage for dependents, and group life insurance plans.
  • Allowances and Assistance: Employers may offer housing, transportation, and relocation allowances, along with assistance for visa processing and temporary housing.
  • Flexible Work Arrangements and PTO Banks: These options cater to modern work-life balance needs, allowing for remote work and accumulated paid time off.
  • Educational and Professional Development: Opportunities for tuition reimbursement and professional development are available.
  • Additional Perks: These can include club memberships, gym memberships, wellness programs, and childcare assistance.

While health insurance is not mandatory, many employers provide it voluntarily. The Department of Labour under the Ministry of Home Affairs offers resources on labor regulations, including the Workmen's Compensation Act, which mandates Workmen's Compensation Insurance for all employees.

For retirement, besides the mandatory social security schemes (TAP and SCP), some employers offer private pension plans, which can provide additional retirement income and flexibility. These plans, however, may involve fees and have specific withdrawal limitations.

Workers Rights in Brunei Darussalam

Read more

In Brunei, employment is regulated by the Employment Order 2009 and the Labor Act (Chapter 93), which define lawful dismissal grounds such as gross misconduct, poor performance, redundancy, and contract expiration. Employers must adhere to specified notice periods based on the employee's length of service, ranging from one day to four weeks. Severance pay is conditional, primarily required in cases of redundancy or contract breach.

The legal framework for anti-discrimination is limited, focusing mainly on ethnicity and religion, with no comprehensive protections for other characteristics like gender or sexual orientation. Employers are encouraged to implement non-discrimination policies and training.

Work conditions are governed by regulations that set a maximum of 44 working hours per week, mandate rest periods, and specify overtime pay at 1.5 times the hourly rate. The Workplace Safety and Health Order 2009 outlines employer obligations for maintaining a safe work environment, including risk management and accident reporting. Employees have rights to a safe workplace and can refuse unsafe work.

Overall, while Brunei has structured employment laws and safety regulations, there is a noted need for more comprehensive anti-discrimination laws to enhance inclusivity and fairness in the workplace.

Agreements in Brunei Darussalam

Read more

In Brunei Darussalam, employment agreements are governed by the Employment Order, 2009, and include various types such as the Contract of Service (COS), Fixed-Term Contract, and Part-Time Contract. These contracts outline essential elements like job responsibilities, remuneration, benefits, working hours, leave entitlements, and termination conditions. Specialized contracts exist for managerial or executive roles and collective bargaining agreements through trade unions. Additionally, employment agreements may feature probationary periods to assess employee suitability, with typical durations ranging from 3 to 6 months. The agreements also often contain confidentiality and non-compete clauses, although the enforceability of non-compete clauses is limited due to legal scrutiny in Brunei. Employers might use alternative protective measures like non-solicitation clauses instead.

Remote Work in Brunei Darussalam

Read more

Brunei Darussalam is gradually adapting to remote work, though specific legal frameworks for such arrangements are still under development. Currently, general labor laws like the Employment Order 2009 provide some indirect guidelines. Technological infrastructure, including reliable internet and digital literacy, is crucial for effective remote work implementation. Employers are encouraged to proactively establish internal remote work policies, covering aspects like communication protocols, equipment provision, and health and safety practices.

The government is exploring initiatives to support remote work, reflecting a shift in mindset among local companies towards flexible work arrangements such as part-time work, flexitime, and job sharing. These arrangements are governed by general employment laws, with employers having the flexibility to define specific terms through internal policies.

Additionally, with the rise of remote work, data protection and privacy have become significant concerns. The Personal Data Protection Act (PDPA) sets out principles for data processing, imposing obligations on employers and granting rights to employees, such as data access and rectification. Employers must ensure data security through measures like encrypted communication tools, access controls, and employee training on data protection.

Working Hours in Brunei Darussalam

Read more

In Brunei Darussalam, the Employment Act sets strict guidelines on working hours to promote employee well-being and fair labor practices. The Act limits the workday for non-shift workers to eight hours and the workweek to 44 hours over six days or 40 hours over five days. Overtime work, defined as hours worked beyond these limits, must be compensated at a minimum rate of 1.5 times the regular hourly wage, and double pay is required for overtime on rest days or public holidays. Employees can work up to 72 hours of overtime per month, with exceptions possible in emergencies.

The Act also mandates daily breaks and weekly rest days to ensure employee health and productivity. Employees must not work more than six consecutive hours without a break, and they are entitled to a weekly rest day, which can be a Sunday or another day as designated by the employer. For shift workers, a continuous 30-hour rest period can substitute for the weekly rest day.

While specific regulations for night shifts and weekend work are not detailed, the general rule is that employees should not work more than six consecutive hours without a break. Overtime pay must be settled within 14 days after the salary period in which it was earned, and the law protects against misclassification that could deny workers rightful overtime compensation.

Salary in Brunei Darussalam

Read more

Determining competitive salaries in Brunei Darussalam involves considering various factors such as industry, location, skills, and experience. The oil and gas sector, being predominant, offers higher salaries compared to others like retail or hospitality. Resources like the Salary Guideline by The Manpower Planning and Employment Council (MPEC) and Paylab.com provide insights into salary ranges. Despite its small size, cost of living variations exist across different districts in Brunei, influencing salary adjustments.

Brunei does not have a legislative minimum wage; instead, wages are set through collective bargaining agreements or market forces. The MPEC provides non-mandatory salary guidelines based on qualifications and experience. Total compensation in Brunei also includes benefits like health insurance, retirement plans, and flexible work arrangements, enhancing the overall value of job offers.

Additionally, Brunei offers various bonuses and allowances, such as yearly and holiday bonuses, housing, transportation, and education allowances, which vary by sector and employer. The absence of a national minimum wage is mitigated by a strong social safety net with government subsidies for essential needs. Employers are also responsible for mandatory social security contributions, and taxation on salaries is tiered based on income levels.

Termination in Brunei Darussalam

Read more

In Brunei Darussalam, the Labour Act (Chapter 93) governs employment termination, specifying notice periods, severance payments, and termination procedures:

  • Notice Periods: The employment contract's notice period is prioritized. If unspecified, statutory minimums apply: 1 day for less than 26 weeks of service, 1 week for 26 weeks to 2 years, 2 weeks for 2 to 5 years, and 4 weeks for over 5 years of service. The maximum notice period is capped at one month.

  • Exceptions: Domestic servants must be given a 14-day notice, irrespective of service length.

  • Severance and Redundancy Payments: Severance pay is not universally required unless specified in the contract or collective agreements. Employees terminated due to redundancy with at least one year of service receive redundancy payments calculated based on their service length.

  • Retirement and Gratuity Payments: Retirement benefits depend on employment contracts or collective agreements, potentially involving pension or provident funds. Gratuity payments are contract-specific lump sums paid upon termination after a certain service period.

  • Termination Types and Procedures: Employment can be terminated with notice, without notice for gross misconduct, due to redundancy, or mutually. Termination must be in writing with reasons and effective date specified. Employers may opt for payment in lieu of notice.

  • Unfair Dismissal: Employees can claim unfair dismissal through the Labour Department if termination lacks reasonable grounds.

These regulations are further detailed in the Employment Order 2009, ensuring structured and fair employment termination processes.

Freelancing in Brunei Darussalam

Read more

In Brunei Darussalam, there are clear distinctions between employees and contractors, particularly in terms of contract structures and negotiation practices.

Contract Structures:

  • Employees vs. Contractors: Labor laws treat these two groups differently.
  • Key Elements: Contractors' contracts typically include scope of work, payment terms, confidentiality clauses, and termination procedures.

Negotiation Practices:

  • Market Research: Contractors research standard fees for their skills.
  • Negotiation Strategy: They often start with higher rates and negotiate down.
  • Documentation: All terms are documented in writing.

Common Industries for Contractors:

  • IT, Construction, Creative Services: These sectors frequently utilize contractors.

Intellectual Property (IP):

  • Types of IP: Includes copyrights, trademarks, and patents.
  • Ownership: Generally, creators own the IP unless otherwise agreed in writing.
  • Protection: Registration of IP and confidentiality agreements are recommended.

Tax and Social Security:

  • Income Tax: Self-employed must register and pay taxes on net profits.
  • Social Security: A voluntary scheme is available for retirement benefits.

Insurance:

  • Options: Health and professional indemnity insurance among others are advised for financial security.

Contractors in Brunei must navigate these aspects carefully, ensuring legal compliance and protecting their interests in negotiations and intellectual property rights.

Health & Safety in Brunei Darussalam

Read more

Brunei Darussalam has a robust legal framework to ensure the health, safety, and welfare of workers, primarily governed by the Workplace Safety and Health Order, 2009 and the Workplace Safety and Health (General Provisions) Regulations, 2014. These laws mandate comprehensive safety measures, risk assessments, and the use of personal protective equipment, among other requirements.

Key Provisions and Enforcement

  • Risk Management: Employers must conduct risk assessments and manage workplace hazards.
  • Training and Information: Provision of necessary training and information to employees is required.
  • Worker Participation: Involvement of workers in safety processes is encouraged.
  • Enforcement: The Commissioner for Workplace Safety and Health, along with inspectors, ensures compliance through inspections and can issue penalties for non-compliance.

Industry-Specific Practices

  • Oil and Gas: Implements stringent safety measures and regular safety drills.
  • Construction: Adheres to specific regulations like fall protection and scaffolding standards.
  • Healthcare: Follows guidelines on infection control and safe patient handling.

Inspection and Compliance

  • Inspection Process: Includes planning, walkthroughs, and reporting, focusing on compliance with safety regulations and hazard management.
  • Frequency and Criteria: Inspections vary based on risk profiles and past compliance history, focusing on areas like PPE usage and emergency preparedness.

Accident Reporting and Compensation

  • Reporting Requirements: Employers must report serious accidents and dangerous occurrences promptly.
  • Investigation: Conducted by employers and SHENA to identify causes and prevent future incidents.
  • Compensation Claims: Covered under the Employees' Compensation Act for work-related injuries or illnesses, providing necessary medical costs and compensation for lost wages or permanent impairment.

This overview highlights the importance of adhering to and consulting the specific legal texts for detailed and accurate guidance on workplace safety and health in Brunei Darussalam.

Dispute Resolution in Brunei Darussalam

Read more

Brunei's labor dispute resolution system includes Labor Courts and arbitration panels. Labor Courts handle individual disputes such as wage issues and unfair dismissal, starting with conciliation by the Commissioner of Labor and potentially moving to a court hearing if unresolved. Arbitration panels deal with collective disputes involving trade unions or groups of employees, focusing on issues like wage negotiations and union recognition, with proceedings initiated by mutual agreement or government intervention.

Additionally, Brunei conducts compliance audits and inspections to ensure adherence to legal standards across various sectors, with entities like government agencies, internal auditors, and external auditors involved. The frequency and rigor of these audits depend on factors such as legal requirements, risk assessments, and company size.

Whistleblower protections in Brunei are governed by the Anti-Corruption Bureau Act, offering confidentiality and protection from retaliation, with advice for whistleblowers to support their claims with documentation and ensure reports are made in good faith.

On the international front, Brunei has ratified several ILO conventions, reflecting its commitment to international labor standards, though areas like freedom of association, discrimination, and the establishment of a minimum wage could see further improvement. Brunei's ongoing engagement with the ILO aims to enhance its labor laws and practices in alignment with global standards.

Cultural Considerations in Brunei Darussalam

Read more

In Brunei Darussalam, effective communication and business dealings are deeply influenced by cultural norms and values. Key aspects include:

  • Indirect Communication and Harmony: Emphasizing social harmony and respect for hierarchy, Bruneians prefer indirect communication. Direct confrontation is avoided, and non-verbal cues play a significant role in conveying messages.

  • Respectful Demeanor: Formal interactions and the use of titles are crucial. Meetings are structured with senior members speaking first, and active listening is valued.

  • Body Language and Space: Maintaining a comfortable physical distance and controlled gestures are important. Eye contact should be respectful but not prolonged, and smiling is a common and warm greeting.

  • Negotiation Approaches: Negotiations are characterized by patience, persistence, and a focus on consensus. Indirect communication is common, and building trust and rapport is prioritized over immediate business discussions.

  • Cultural Influences on Business Dealings: Respect for hierarchy and Islamic values significantly influence business practices. Non-verbal communication is also crucial in demonstrating respect.

  • The Influence of Hierarchy: Brunei's hierarchical social structure affects decision-making, team dynamics, and leadership styles. A top-down approach in decision-making and paternalistic leadership are prevalent.

  • Statutory Holidays: Understanding Brunei's statutory holidays, such as Hari Raya Puasa and National Day, is essential for planning business activities and respecting cultural observances.

Overall, success in Brunei's business environment requires an understanding of its indirect communication style, hierarchical structures, and the significant role of cultural and religious norms.

Frequently Asked Questions for Employer of Record services in Brunei Darussalam

Is it possible to hire independent contractors in Brunei Darussalam?

Yes, it is possible to hire independent contractors in Brunei Darussalam. However, there are several important considerations to keep in mind when doing so.

  1. Legal Framework: Brunei Darussalam has specific labor laws and regulations that govern employment relationships. While independent contractors are not subject to the same regulations as full-time employees, it is crucial to ensure that the contractual agreement clearly defines the nature of the relationship to avoid any misclassification issues. Misclassifying an employee as an independent contractor can lead to legal and financial repercussions.

  2. Contractual Agreement: A well-drafted contract is essential when hiring independent contractors. The contract should outline the scope of work, payment terms, duration of the contract, confidentiality clauses, and any other relevant terms. This helps in setting clear expectations and protecting both parties' interests.

  3. Tax Implications: Independent contractors in Brunei Darussalam are responsible for their own tax obligations. As an employer, you are not required to withhold taxes on their behalf. However, it is advisable to ensure that the contractor is aware of their tax responsibilities to avoid any potential issues.

  4. Compliance with Local Laws: While independent contractors are not covered by the Employment Order 2009, which governs employment relationships in Brunei, it is still important to comply with other relevant local laws and regulations. This includes ensuring that the contractor has the necessary permits and licenses to operate in Brunei.

  5. Benefits and Protections: Independent contractors are not entitled to the same benefits and protections as employees, such as paid leave, health insurance, and other statutory benefits. This can be advantageous for companies looking to reduce costs, but it also means that contractors may require higher compensation to offset the lack of benefits.

  6. Flexibility: Hiring independent contractors can provide greater flexibility for businesses, allowing them to scale their workforce up or down based on project needs. This can be particularly beneficial for companies operating in Brunei Darussalam, where the labor market may have specific skill shortages.

Using an Employer of Record (EOR) service like Rivermate can simplify the process of hiring independent contractors in Brunei Darussalam. An EOR can handle the complexities of local compliance, payroll, and tax obligations, ensuring that your business remains compliant with local laws while allowing you to focus on your core operations. This can be especially valuable for companies that do not have a legal entity in Brunei and want to avoid the administrative burden of managing independent contractors directly.

What is the timeline for setting up a company in Brunei Darussalam?

Setting up a company in Brunei Darussalam involves several steps and can take a variable amount of time depending on the complexity of the business and the efficiency of the processes. Here is a general timeline for setting up a company in Brunei Darussalam:

  1. Name Reservation (1-2 days):

    • The first step is to reserve a company name with the Registry of Companies and Business Names (ROCBN). This process typically takes 1 to 2 days.
  2. Preparation of Incorporation Documents (1-2 days):

    • Prepare the necessary incorporation documents, including the Memorandum and Articles of Association, and other required forms. This can take an additional 1 to 2 days.
  3. Submission of Incorporation Documents (1-2 days):

    • Submit the incorporation documents to the ROCBN. The review and approval process usually takes 1 to 2 days.
  4. Issuance of Certificate of Incorporation (1-2 days):

    • Once the documents are approved, the ROCBN will issue a Certificate of Incorporation. This typically takes another 1 to 2 days.
  5. Post-Incorporation Procedures (1-2 weeks):

    • After incorporation, several post-incorporation procedures need to be completed, such as:
      • Opening a corporate bank account.
      • Registering for tax with the Revenue Division of the Ministry of Finance.
      • Registering for social security with the Employees Trust Fund (TAP) and the Supplemental Contributory Pension (SCP) scheme.
      • Obtaining any necessary business licenses or permits, depending on the nature of the business.

Overall, the entire process of setting up a company in Brunei Darussalam can take approximately 2 to 4 weeks, assuming there are no significant delays or complications.

Using an Employer of Record (EOR) service like Rivermate can significantly streamline this process. An EOR can handle many of the administrative and compliance-related tasks, allowing businesses to focus on their core operations. This can be particularly beneficial for foreign companies looking to enter the Brunei market quickly and efficiently.

Who handles the filing and payment of employees' taxes and social insurance contributions when using an Employer of Record in Brunei Darussalam?

When using an Employer of Record (EOR) like Rivermate in Brunei Darussalam, the EOR takes on the responsibility of handling the filing and payment of employees' taxes and social insurance contributions. This includes:

  1. Income Tax: Although Brunei does not impose personal income tax on individuals, the EOR ensures compliance with any other relevant tax obligations that may apply to employees, such as those related to business income or other specific tax regulations.

  2. Social Security Contributions: Brunei has a social security system known as the Employees Trust Fund (Tabung Amanah Pekerja, TAP) and the Supplemental Contributory Pension (SCP) scheme. The EOR manages the registration of employees with these schemes and ensures that both employer and employee contributions are accurately calculated and timely remitted. The TAP contribution rate is typically 5% from the employee and 5% from the employer, while the SCP contribution rate is 3.5% from the employer.

  3. Other Statutory Contributions: The EOR also handles any other statutory contributions that may be required under Brunei law, ensuring full compliance with local regulations.

By managing these responsibilities, the EOR allows companies to focus on their core business activities while ensuring that all legal and regulatory requirements related to employment are met in Brunei Darussalam.

What options are available for hiring a worker in Brunei Darussalam?

In Brunei Darussalam, employers have several options for hiring workers, each with its own set of regulations and requirements. Here are the primary methods:

  1. Direct Employment:

    • Local Recruitment: Employers can hire local Bruneian citizens or permanent residents directly. This involves advertising the job, interviewing candidates, and following local labor laws regarding contracts, wages, and benefits.
    • Foreign Workers: Hiring foreign workers requires obtaining work permits and visas. The employer must demonstrate that the position cannot be filled by a local worker and comply with the regulations set by the Department of Labour.
  2. Contract Employment:

    • Employers can hire workers on a fixed-term contract basis. This is common for project-based work or temporary assignments. Contracts must clearly outline the terms of employment, including duration, salary, and job responsibilities.
  3. Temporary or Part-Time Employment:

    • For short-term needs, employers can hire temporary or part-time workers. These arrangements must still comply with Brunei’s labor laws, including minimum wage requirements and working hours.
  4. Outsourcing:

    • Employers can outsource certain functions or projects to third-party service providers. This can be beneficial for non-core activities, allowing the company to focus on its primary business operations.
  5. Employer of Record (EOR) Services:

    • Using an Employer of Record (EOR) like Rivermate can simplify the hiring process, especially for foreign companies looking to establish a presence in Brunei without setting up a legal entity. An EOR handles all employment-related responsibilities, including payroll, taxes, benefits, and compliance with local labor laws. This allows the company to focus on its core business activities while ensuring that all legal and administrative requirements are met.

Benefits of Using an Employer of Record in Brunei Darussalam:

  1. Compliance with Local Laws:

    • An EOR ensures that all employment practices comply with Brunei’s labor laws and regulations, reducing the risk of legal issues and penalties.
  2. Simplified Payroll and Tax Management:

    • The EOR manages payroll processing, tax withholding, and social security contributions, ensuring accuracy and timeliness.
  3. Cost-Effective:

    • Using an EOR can be more cost-effective than setting up a local entity, especially for companies testing the market or with a small number of employees.
  4. Faster Market Entry:

    • An EOR allows companies to hire employees quickly without the need to establish a legal entity, enabling faster market entry and operational setup.
  5. Focus on Core Business:

    • By outsourcing HR and administrative tasks to an EOR, companies can focus on their core business activities and strategic goals.
  6. Risk Mitigation:

    • The EOR assumes the legal risks associated with employment, including compliance with labor laws, reducing the company’s exposure to potential liabilities.

In summary, while there are various options for hiring workers in Brunei Darussalam, using an Employer of Record like Rivermate offers significant advantages, particularly for foreign companies. It ensures compliance with local laws, simplifies administrative processes, and allows businesses to focus on their core operations.

What is HR compliance in Brunei Darussalam, and why is it important?

HR compliance in Brunei Darussalam refers to the adherence to the country's labor laws, regulations, and standards that govern employment practices. This includes compliance with the Employment Order 2009, which is the primary legislation regulating employment relationships in Brunei. Key aspects of HR compliance in Brunei include:

  1. Employment Contracts: Ensuring that employment contracts are in writing and include essential terms such as job description, salary, working hours, and termination conditions.

  2. Wages and Benefits: Adhering to minimum wage requirements, timely payment of salaries, and provision of statutory benefits such as annual leave, sick leave, maternity leave, and public holidays.

  3. Working Hours and Overtime: Complying with regulations on standard working hours, which are typically 8 hours per day and 44 hours per week, and ensuring proper compensation for overtime work.

  4. Health and Safety: Implementing workplace health and safety standards to protect employees from occupational hazards and ensuring a safe working environment.

  5. Termination and Redundancy: Following proper procedures for termination of employment, including notice periods, severance pay, and ensuring that terminations are not discriminatory or unfair.

  6. Foreign Workers: Complying with regulations regarding the employment of foreign workers, including obtaining necessary work permits and ensuring that foreign employees are treated fairly and in accordance with local laws.

  7. Anti-Discrimination and Equal Opportunity: Ensuring that employment practices do not discriminate based on race, gender, religion, or other protected characteristics, and promoting equal opportunity in the workplace.

Importance of HR Compliance in Brunei Darussalam:

  1. Legal Protection: Compliance with HR laws protects the company from legal disputes, fines, and penalties that can arise from non-compliance. It ensures that the company operates within the legal framework set by the government.

  2. Reputation Management: Adhering to HR compliance standards enhances the company's reputation as a fair and responsible employer. This can attract top talent and improve employee retention.

  3. Employee Satisfaction and Productivity: When employees are treated fairly and their rights are protected, it leads to higher job satisfaction, which in turn boosts productivity and morale.

  4. Risk Management: Proper HR compliance helps in identifying and mitigating risks related to employment practices, such as workplace accidents, discrimination claims, and wrongful termination lawsuits.

  5. Operational Efficiency: Clear and compliant HR policies streamline HR processes, reduce administrative burdens, and ensure smooth operations within the organization.

  6. Global Standards: For multinational companies, maintaining HR compliance in Brunei ensures alignment with global standards and practices, facilitating smoother international operations and consistency across different regions.

Using an Employer of Record (EOR) service like Rivermate can significantly aid in achieving HR compliance in Brunei Darussalam. An EOR handles all aspects of employment, from hiring and payroll to compliance with local labor laws, allowing companies to focus on their core business activities while ensuring that they meet all legal requirements. This is particularly beneficial for companies entering the Brunei market for the first time, as it reduces the complexity and risk associated with navigating local employment laws.

Do employees receive all their rights and benefits when employed through an Employer of Record in Brunei Darussalam?

Yes, employees in Brunei Darussalam receive all their rights and benefits when employed through an Employer of Record (EOR) like Rivermate. An EOR ensures compliance with local labor laws and regulations, which is crucial in a country like Brunei where employment laws are strictly enforced.

Here are some key aspects of how an EOR ensures employees receive their rights and benefits in Brunei Darussalam:

  1. Compliance with Labor Laws: Brunei's Employment Order 2009 outlines various employee rights, including working hours, overtime pay, leave entitlements, and termination procedures. An EOR ensures that all these regulations are adhered to, protecting employees from any legal discrepancies.

  2. Salary and Compensation: An EOR ensures that employees are paid in accordance with Brunei's minimum wage laws and any industry-specific wage standards. They also handle payroll processing, ensuring timely and accurate salary disbursements.

  3. Leave Entitlements: Employees are entitled to various types of leave, including annual leave, sick leave, maternity leave, and public holidays. An EOR manages these entitlements, ensuring that employees can take their leave as per the statutory requirements.

  4. Social Security and Benefits: In Brunei, employers are required to contribute to the Employees Trust Fund (TAP) and the Supplemental Contributory Pension (SCP) scheme. An EOR ensures that these contributions are made correctly and on time, securing the employees' future benefits.

  5. Health and Safety: Workplace safety is a critical aspect of employment in Brunei. An EOR ensures that the workplace complies with the Occupational Safety and Health Order 2009, providing a safe working environment for employees.

  6. Termination and Severance: An EOR handles termination procedures in compliance with local laws, ensuring that employees receive any due severance pay and other termination benefits as stipulated by Brunei's employment regulations.

  7. Dispute Resolution: In case of any employment disputes, an EOR can provide support and ensure that the resolution process follows the legal framework set by Brunei's labor laws.

By using an EOR like Rivermate, companies can ensure that their employees in Brunei Darussalam receive all their statutory rights and benefits, while also mitigating the risk of non-compliance with local employment laws. This not only protects the employees but also enhances the employer's reputation and operational efficiency in the region.

How does Rivermate, as an Employer of Record in Brunei Darussalam, ensure HR compliance?

Rivermate, as an Employer of Record (EOR) in Brunei Darussalam, ensures HR compliance through a comprehensive understanding and application of local labor laws and regulations. Here are several ways Rivermate achieves this:

  1. Local Expertise and Knowledge: Rivermate employs local HR professionals who are well-versed in Brunei's employment laws, including the Employment Order 2009, which governs labor practices in the country. This ensures that all HR practices are aligned with local legal requirements.

  2. Employment Contracts: Rivermate ensures that employment contracts are compliant with Brunei's legal standards. This includes detailing terms of employment, job responsibilities, compensation, benefits, and termination conditions in accordance with local laws.

  3. Payroll Management: Rivermate handles payroll processing in compliance with Brunei's regulations, ensuring accurate calculation of wages, statutory deductions, and timely payment. This includes adherence to the minimum wage laws and overtime pay requirements.

  4. Tax Compliance: Rivermate manages the complexities of Brunei's tax system, ensuring that all employee and employer tax obligations are met. This includes the accurate withholding and remittance of income tax and contributions to the Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP).

  5. Benefits Administration: Rivermate ensures that all statutory benefits, such as paid leave, maternity leave, and sick leave, are provided in accordance with Brunei's labor laws. They also manage any additional benefits that may be required by law or agreed upon in the employment contract.

  6. Regulatory Reporting: Rivermate handles all necessary regulatory reporting to Brunei's labor authorities, ensuring that all required documentation and filings are completed accurately and on time. This includes employment records, tax filings, and social security contributions.

  7. Employee Relations and Dispute Resolution: Rivermate provides support in managing employee relations and resolving disputes in compliance with Brunei's labor laws. They ensure that any disciplinary actions or terminations are conducted legally and fairly, minimizing the risk of legal disputes.

  8. Health and Safety Compliance: Rivermate ensures that workplace health and safety standards are met in accordance with Brunei's Occupational Safety and Health Order 2009. They provide guidance on maintaining a safe working environment and managing workplace hazards.

By leveraging Rivermate's expertise as an Employer of Record in Brunei Darussalam, companies can ensure full compliance with local HR regulations, thereby mitigating legal risks and focusing on their core business operations.

What legal responsibilities does a company have when using an Employer of Record service like Rivermate in Brunei Darussalam?

When a company uses an Employer of Record (EOR) service like Rivermate in Brunei Darussalam, the legal responsibilities are significantly streamlined and managed by the EOR. Here are the key legal responsibilities and how they are handled:

  1. Employment Contracts:

    • EOR Responsibility: The EOR drafts and manages employment contracts in compliance with Brunei's labor laws. This includes ensuring that contracts meet the requirements set out in the Employment Order, 2009.
    • Company Responsibility: The company must provide the EOR with the necessary details about the job role, compensation, and any specific terms they wish to include.
  2. Payroll and Tax Compliance:

    • EOR Responsibility: The EOR handles payroll processing, ensuring that employees are paid accurately and on time. They also manage the calculation and remittance of income tax and other statutory deductions to the Revenue Division of the Ministry of Finance.
    • Company Responsibility: The company needs to fund the payroll and provide any necessary information regarding employee compensation and benefits.
  3. Social Security Contributions:

    • EOR Responsibility: The EOR ensures compliance with the Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP) schemes, including the calculation and payment of contributions.
    • Company Responsibility: The company must ensure that the EOR has accurate information about employee earnings to calculate contributions correctly.
  4. Work Permits and Visas:

    • EOR Responsibility: For foreign employees, the EOR assists with obtaining the necessary work permits and visas, ensuring compliance with immigration laws.
    • Company Responsibility: The company must provide the EOR with the required documentation and information about the foreign employees.
  5. Labor Law Compliance:

    • EOR Responsibility: The EOR ensures that all employment practices comply with Brunei's labor laws, including working hours, leave entitlements, termination procedures, and occupational health and safety regulations.
    • Company Responsibility: The company should communicate any specific policies or practices they want to implement, ensuring they align with local laws.
  6. Employee Benefits:

    • EOR Responsibility: The EOR manages statutory benefits and can also administer additional benefits as per the company's policies, ensuring compliance with local regulations.
    • Company Responsibility: The company needs to define the benefits package they wish to offer and ensure it is communicated to the EOR.
  7. Termination and Severance:

    • EOR Responsibility: The EOR handles the termination process, ensuring it complies with the Employment Order, 2009, including notice periods and severance pay.
    • Company Responsibility: The company must inform the EOR of the decision to terminate an employee and provide the necessary details to ensure compliance with legal requirements.

By using an EOR like Rivermate in Brunei Darussalam, companies can mitigate the complexities and risks associated with local employment laws. The EOR assumes most of the legal responsibilities, allowing the company to focus on its core business activities while ensuring compliance with local regulations.

What are the costs associated with employing someone in Brunei Darussalam?

Employing someone in Brunei Darussalam involves several costs that employers need to consider. These costs can be broadly categorized into direct compensation, statutory contributions, and other employment-related expenses.

  1. Direct Compensation:

    • Salaries and Wages: The primary cost is the employee's salary or wage, which varies depending on the industry, role, and experience of the employee. Brunei does not have a statutory minimum wage, so salaries are typically negotiated between the employer and employee.
    • Bonuses and Incentives: Employers may offer performance-based bonuses or other incentives to attract and retain talent.
  2. Statutory Contributions:

    • Employee Provident Fund (EPF): Employers are required to contribute to the Employee Provident Fund. The contribution rate is typically 5% of the employee's salary, while the employee contributes 5% as well.
    • Supplementary Contributory Pension (SCP): Employers must also contribute to the SCP, which is an additional retirement savings scheme. The contribution rate is 3.5% of the employee's salary, with the employee contributing 3.5% as well.
    • Social Security Contributions: Brunei does not have a comprehensive social security system like some other countries, but employers may need to consider other forms of insurance or benefits.
  3. Other Employment-Related Expenses:

    • Health and Medical Benefits: While not mandatory, many employers provide health and medical insurance as part of the employment package to attract and retain employees.
    • Training and Development: Employers may invest in training and development programs to enhance the skills and productivity of their workforce.
    • Leave Entitlements: Employers must provide paid leave entitlements, including annual leave, sick leave, maternity leave, and public holidays. The specifics of these entitlements are governed by Brunei's Employment Order.
    • Work Permits and Visas: For foreign employees, employers must bear the costs associated with obtaining work permits and visas. This includes application fees and any associated administrative costs.
  4. Administrative and Compliance Costs:

    • Payroll Management: Managing payroll can incur costs, especially if the employer uses payroll software or outsources payroll processing.
    • Legal and Compliance Costs: Ensuring compliance with local labor laws and regulations may require legal consultation and administrative efforts, which can add to the overall cost of employment.

Using an Employer of Record (EOR) like Rivermate can help manage these costs effectively. An EOR handles all aspects of employment, including payroll, statutory contributions, and compliance with local labor laws, allowing businesses to focus on their core operations while ensuring that all employment-related obligations are met efficiently.

Rivermate | A 3d rendering of earth

Hire your employees globally with confidence

We're here to help you on your global hiring journey.