With the recent declaration of a State of Emergency in the Dominican Republic decreed by the Executive Branch to curb the spread of COVID-19, labor relations have been and will be considerably affected, since part of the measures taken by the Dominican State include the temporary closure of public and private companies and entities, as well as the closure of all borders.
In light of this critical situation, the Ministry of Labor of the Dominican Republic issued resolution number 007/2020 on 18 March 2020, which provided for the following recommendations:
- Employers whose establishments qualify to remain open to the public are instructed to make their working hours more flexible and, as much as possible, to implement distance working in order to avoid crowded workplaces.
- Employers whose establishments must remain closed are urged to grant paid holidays to all workers who qualify for them. Workers who have not acquired the right for paid holidays will be advanced the equivalent of one week's paid holiday, as well as the payment of one week's salary by the company.
- Isolation measures are encouraged for vulnerable workers, such as those over 60 years of age, those with high blood pressure or cardiovascular diseases, pregnant women, workers suffering from cancer, diabetes, chronic respiratory diseases, autoimmune diseases, as well as those with kidney failure undergoing dialysis.
- Workers are urged to assume a collaborative attitude to facilitate reasonable agreements with their employers in order to comply with this resolution.
- Any measures taken should not interfere with company production or workers' wages.
These provisions are not mandatory but suggested by the Ministry of Labor. There are other options for companies whose businesses will most likely remain closed until the end of the quarantine period. For example, employers have the option to suspend their employees' employment contracts, as permitted by the Labor Code of the Dominican Republic, which would basically entail that during the suspension period neither the workers will provide their services to the company nor will the company pay their the agreed-upon salary.
For an employment contract to be suspended, at least one of the causes set out in the Code must be present, including force majeure or fortuitous event.
The presence of COVID-19, together with the declaration of the state of emergency, as well as the measures adopted by the state to prevent the spread of the pandemic, constitute a force majeure that has temporarily prevented many companies from continuing to operate.
Once the cause for suspension arises, the employer has the obligation to inform the labor authorities, which will verify the validity of the cause.
Employment Contract Suspensions based on force majeure or fortuitous events have a maximum duration of 90 days, with the possibility of extending it in case this period is not sufficient. Suspensions do not affect employment seniority benefits for the suspended periods.
The employer must notify the labor authorities as soon as the suspension-causing event has ceased to occur; otherwise, the Department of Labor may reinstate the worker or the latter may resign with cause.
Likewise, during the suspension of employment contracts, the employer must continue to report and pay its contributions to the Dominican Social Security System, with the exception of labor risks fund contributions which are excluded during the suspended term.
President Danilo Medina, in order to reduce the impact of the current crisis on the country's main productive sectors and their collaborators, announced in his address to the nation on March 26, 2020, an economic aid package, which includes The FASE program. As part of this program, the Government has agreed to cover up to RD$8,500 per employee in companies who have had difficulties to maintain their operations, on the condition that the employee is kept on the company's payroll. Businesses interested in applying for the FASE financial aid to cover part of their payroll obligations must follow the following steps starting April 2nd:
1) Fill the company's contact information on the Ministry of Treasury's website with the following information:
- Company's tax ID and name.
- Name, ID, telephone number and position of the company's contact person.
2) Complete the application form that could be downloaded from the Treasury's website with the following information:
- Company's tax ID, name and number of employees.
- ID, name and payroll account number of the employees who will benefit from FASE (must be under their names) and routing number of the banks, if the accounts are not in Banco de Reservas. Also, specify the bank where the payroll is located and the bank account's type.
- Send the completed application form to the Ministry of Treasury's FASE email address.
Should your company decide to opt for suspension or apply to the FASE program, Guzmán Ariza is fully prepared to assist you with the necessary procedures.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.