Employer of Record Guide in 

Cayman Islands

Vacation Leave

Minimum Entitlement: 2 weeks (10 working days) of paid vacation after completing the first year of employment.

Progressive Increases:

• Years 1-3: 2 weeks
• Years 4-10: 3 weeks
• 10+ years: 4 weeks

Accrual: Vacation entitlement is earned after completion of each employment year, not on a pro-rata basis during the first year.

Payout: Unused vacation must be paid out upon termination.

Sick Leave

Writer note: Verify exact structure - sources show some variation in payment structure

Employees are entitled to 10 paid sick days per year after completing one year of employment.

Medical Certification: Employers may require a doctor's note after 2-3 consecutive days of sick leave.

Accrual: Sick leave typically does not carry over to the following year unless specified in the employment contract.

Maternity Leave

Duration: 12 weeks of maternity leave

Payment Structure:

• 20 working days at full pay
• 20 working days at half pay
• Remaining period unpaid

Job Protection: Employers must guarantee the same or comparable position upon return.

Parental Leave

Writer note: Verify current provisions - sources show conflicting information

Paternity Leave: 2 weeks (1 week paid, 1 week unpaid)

Adoption Leave: 4 weeks paid leave for adoptive parents

Note: Statutory provisions for parental leave beyond maternity may be limited. Verify current legislation.

Bereavement Leave

Writer note: Verify statutory provisions - sources show conflicting information

Compassionate Leave: Maximum 5 days per 12-month period for immediate family members, including:

• Spouse or partner
• Children
• Parents
• Siblings

Personal & Family Leave

Limited statutory provisions exist beyond the above categories. Most personal and family leave arrangements are subject to individual employer policies and employment contract terms.

Summary

Termination Types

Termination With Cause:

• No notice or severance required
• Must involve serious misconduct or breach of contract
• Burden of proof lies with the employer

Termination Without Cause:

• Permitted with proper notice and/or severance
• Most common form of employment termination

Constructive Dismissal:

• Occurs when working conditions are substantially altered without consent

Notice Period Requirements

Writer note: Critical discrepancy identified - verify immediately with legal counsel

Sources show conflicting information:

• Version 1: Notice period equals pay interval (maximum 30 days unless contract specifies longer)
• Version 2: One week's notice per completed year of service (maximum 12 weeks)

Professional legal consultation is strongly recommended to clarify current requirements.

Severance Pay

Formula: One week's wages per completed year of service

Eligibility Requirements:

• Minimum one year of continuous service
• Termination without cause
• Not applicable during probationary period

Calculation: Based on regular wages, typically excluding bonuses and irregular payments.

Probationary Periods

Duration: Typically 3-6 months, must be specified in the employment contract

Termination During Probation: 24 hours' notice required, no severance obligations

Final Pay Requirements

Final wages must be paid within the next regular pay period or 7 days of termination, whichever comes sooner.

Final Pay Must Include:

• Outstanding wages
• Accrued vacation pay
• Any other contractual entitlements

Termination Documents & Process

Required Documentation:

• Written termination notice
• Record of termination meeting
• Final pay calculation breakdown
• Return of company property acknowledgment

Anti-Discrimination & Retaliation Laws

The Gender Equality Law and other legislation protect against discrimination based on:

• Sex and gender
• Race and ethnic origin
• Religion
• Disability
• Marital status
• Pregnancy

National Public Holidays 2025

The Cayman Islands observes 13 official public holidays:

Note: Additional holidays may be declared by government proclamation.

Holiday Pay Eligibility

To qualify for statutory holiday pay, employees must:

• Work their last scheduled day before the holiday
• Work their first scheduled day after the holiday
• Have been employed for at least 30 days

Working on a Statutory Holiday

Employees who work on public holidays receive:

• Double pay rate for hours worked, or
• Time off in lieu by mutual agreement between employer and employee

Substitution Days

When a public holiday falls on a weekend, the following Monday typically becomes the observed holiday with full pay entitlements.

Required Documents for Employment

Employment Contract: Must be provided within 10 working days of employment commencement, including:

• Job title and duties
• Salary and benefits
• Working hours and location
• Termination clauses
• Probationary period terms

Work Permits: Non-Caymanian employees require work permits through the Workforce Opportunities & Residency Cayman (WORC) system.

Additional Documentation:

• Banking information for salary payments
• Pension plan registration
• Health insurance enrolment
• Emergency contact information

Language Requirements

Official Language: English is the official language for all employment documentation and workplace communication.

Background Checks & References

Permitted background checks include:

• Identity verification
• Employment history
• Criminal record checks (with employee consent)
• Credit checks (for financial positions, with consent)

All background checks must be relevant to the position and conducted with written employee consent.

Data Protection & Privacy

Employment practices must comply with the Data Protection Act (DPA), 2021 Revision.

Key Requirements:

• Employee consent for data collection
• Secure storage of personal information
• Limited data sharing without consent
• Right to access personal data

IP Assignment & Confidentiality

Default Ownership: Intellectual property created during employment belongs to the employer.

Recommended Contract Clauses:

• Clear IP assignment provisions
• Confidentiality and non-disclosure terms
• Non-compete restrictions (if applicable)
• Return of company property requirements

Probation Period Setup

Duration: 3-6 months typical, must be specified in employment contract

Terms: During probation, either party may terminate with 24 hours' notice without severance obligations.

Onboarding Timeline

What the EOR Handles

Borderless AI manages:

• Employment contract preparation and compliance
• Work permit coordination with WORC
• Pension and health insurance registration
• Payroll setup and tax compliance
• Local regulatory compliance monitoring
• Document collection and secure storage

Worker Classification: Employee vs Contractor

Proper classification is crucial to avoid penalties and ensure compliance with local labour laws.

Employee Indicators:

• Work under employer control and direction
• Use employer-provided tools and equipment
• Receive regular salary and benefits
• Work set hours at employer's location

Independent Contractor Indicators:

• Operate independently with minimal supervision
• Provide own tools and equipment
• Invoice for services rendered
• Control their own schedule and methods

Misclassification Risks: Can result in back payments for benefits, pension contributions, and potential legal penalties.

Unionisation & Collective Agreements

The right to unionise and engage in collective bargaining is recognised under Cayman Islands law. However, union presence is limited, particularly in the financial services sector.

Key Considerations:

• Employees have the right to join unions
• Collective agreements may override standard employment terms
• Strike action is regulated but permitted

Cultural Norms & DEI Expectations

Work Culture: Similar to European and North American standards with emphasis on:

• Professional communication and dress codes
• Monday-Friday business week (typically 8:30 AM - 5:30 PM)
• Respect for cultural diversity given the international workforce
• Work-life balance expectations

Diversity & Inclusion: The multicultural nature of the Cayman Islands workforce requires sensitivity to:

• Religious observances
• Cultural holidays and traditions
• Language preferences (though English is standard)
• International business practices

Remote Work Considerations

Writer note: Framework still developing - verify current regulations

The legal framework for remote work is evolving, with considerations for:

Global Citizen Concierge Program: Available for foreign nationals seeking to work remotely from the Cayman Islands.

Key Requirements:

• Proper work authorisation for remote workers
• Tax implications for both local and international obligations
• Equipment and expense policies
• Data security and confidentiality measures

Cross-Border Considerations: Remote work arrangements may trigger tax obligations in other jurisdictions, requiring careful planning and compliance monitoring.