As of September 1, 2021, some important changes have been made to the Labor Law.
All changes (articles) can be found in the New Civil Code of Aruba (‘Nieuw Burgerlijk Wetboek van Aruba’) – book 7, Art. 610 – 691.
Below are some highlights that are directly related to payroll:
Art 613: The employer can unilaterally change the conditions in the employment contract when serious circumstances (like the COVID pandemic) occur. This can only be done if there is a written clause agreed upon in the contract.
Art 614a paragraph 5: The employment contract can automatically be terminated upon reaching the retirement age as long as there is a clause agreed upon in the contract. (The transitional provision of 2013 has been annulled).
Art 626: Employer is obliged to issue and deliver either a written or electronic pay slip. An electronic pay slip may only be given with the employee’s consent.
Art 624: Commissions, service charges, etc. should be paid along with wages. If not yet paid out (or known), an advance should be paid (the average of last three months).
Art 625: If commissions, service charges, etc. are paid later, a default interest must be paid (6-8 days 5%; more than 8 days +1% per day with a max of 50%).
Art 629: In case of (long-term) illness, the employee should be paid out 100% for at least 6 weeks. No wage payments are required if illness is intentional or if false information has been given about their physical condition, if procedures and/or rules are not complied with, if healing is intentionally hindered or delayed, and (this is new) if the employee refuses suitable temporary work offered. The employer is obliged to notify the employee of the suspension of wages.
Art 658a: Employer is obliged—if possible—to offer suitable temporary work in the event of a long-term illness of the employee.
Art 660a: Employee is obliged to cooperate with medical checkup to perform the suitable work offered if required by the employer.
Art 632a: In case of seizure on employee’s wages, the deduction was maximum 1/3rd of the employee’s net wages. This has changed to the following: in case of minimum wage, the deduction is maximum 1/10th of the net wages. If higher than minimum wage up, but up to Awg 50.000 gross per year, the maximum deduction is 1/4th. If wages are higher than Awg 50.000 per year, the maximum deduction is 1/3rd. There is no limitations on deductions for living expenses.
Art 632: Settlement by the employer of, for example, damage or advanced payment, can only be done on the seizure free portion of the net wage and in accordance with the maximum deductions of art 632a.
Art 634: Vacation days. Minimum vacation days per year used to be calculated by the number of working days per week multiplied by 3 with a minimum of 15. This was also applicable for a 6 day workweek. The minimum has now been changed to the number of working days multiplied by 3.3. The following then applies: 5 day workweek → at least 16,5 vacation days per year; 6 day workweek → at least 19,8 vacation days per year.
Art 640: Vacation days may not be bought off except for when there are vacation days in excess of the statutory minimum and upon termination of employment.
Art 674 paragraph 2: In the event of the employee’s death, the employer is obliged to pay out one month’s wage to the surviving relatives as of the day of death.
You can also visit the website of ‘Directie Arbeid en Onderzoek’ (DAO): www.daoaruba.com for more information