Labour Overview – Aruba
In Aruba, the Minimum Wage Ordinance establishes a minimum wage for workers in industry, construction or commerce and another minimum wage for live-in domestic workers.
The Labor Ordinance sets out different working hours based on industry and the length of the working work. However, it does not apply to employees who earn more than a certain amount (currently, twice the gross monthly minimum wages) nor to civil servants.
For those working 5 days a week, a daily maximum of 8.5 hours is permitted, not to exceed 42.5 hours per week. For those working 6 days a week, a daily maximum of 8 hours is allowed. For industries such as hotel and restaurant workers, where shift work is required, the weekly maximum is 48 hours. Shift work is generally paid a 15% premium, when agreed upon by both parties or stipulated in a collective labor agreement.
Employees are entitled to 15 days per year as vacation time. There are 11 public holidays as well in Aruba. Work on a public holiday is paid double time.
Severance pay (Cessantia) is payable where the employee is terminated for reasons beyond his or her control. Pay is calculated as follows:
For employees with 1 to 10 years’ service, 1 week’s pay per year of service;
For each year of service between 11 and 20 years of service, 1.25 weeks’ pay per year of service;
For employees with more than 20 years of service, 2 weeks pay for each year of service above 20 years.
Employers are also obliged to contribute a set annual premium to the Cessantia Fund for each employee.
On January 1, 2012 the compulsory general pension scheme came into effect. The Ordinance on general pension establishes this scheme, which applies to all employees in the private sector. The premium is at a minimum 6% and both the employer and employee contribute 3% each (as of 2014). The new general pension ensures that citizens of Aruba will have a better retirement income.
Social Security Benefits
Employers and employees contribute to the Social Security Bank, which provides the following coverage: health, wage compensation, accident, old age and widow and orphans benefits. Employees are required to contribute 10.1% of their pay while employers contribute 24.80 to 27.05%, depending on the industry, up to a certain maximum.
The General Health Insurance (AZV) is an obligatory insurance introduced in 2001. The AZV premium is 11.5% of income, of which the employer pays 8.9% and the employee contributes 2.6% of income up to a maximum income.
The Old Age and Widow/Orphans Insurance (AOV/AWW). All citizens are entitled to receive an old age pension, upon reaching age 60. Employees contribute 4.5% of income and employers contribute 10%, up to a maximum income. Self-employed persons contribute the entire 14.5%, up to a maximum amount. For about 75% of retirees, this is their only form of retirement income.
Wage compensation insurance (ZV) and Accident Insurance (OV) are funded by employer contributions.