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Workforce Flexibility and Government Incentives in times of Covid-19 - Dominican Republic

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

Labor Ministry Resolution No. 007/2020: On preventive measures to safeguard the health of workers and employers in the face of the impact of the Covid-19 in the Dominican Republic (flexible work schedule, granting vacations to employees, isolation measures for employees belonging to vulnerable groups, etc.)

Employee Solidarity Assistance Fund (FASE in Spanish): The Employee Solidarity Assistance Fund (FASE) is created to temporarily support formal workers in the private sector with a monetary transfer, with the aim of counteracting the economic effects of the measures adopted to stop the spread of the Covid- 19).

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

The suspension of employment contracts by force majeure must be communicated to the Ministry of Labour within three days of the occurrence of the cause warranting such suspension, through the Integrated System of Occupational Risk (Sirla), for which the employee must comply with the following:

Complete form DGT-9 (Suspension of the effects of the employment contract), in which it must indicate the information of the workers who will be suspended, addresses, telephone numbers, identity document, job, and the duration of the suspension:

He must inform the workers of such suspension by means of a written communication, which he is accused of having received from them

You must send the DGT-9 and the documents supporting such suspension to the Department of Labor , who must verify the causes of the suspension and issue the corresponding solution within a period of no more than 15 days

After completing the above process the employer may initiate the application for inclusion of suspended workers to the Phase program initiated by the government at the beginning of the pandemic.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

Yes. The Employee Solidarity Assistance Fund (FASE for its initials in Spanish) “Fondo de Asistencia Solidaria a Empleados”.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

The government authorize the tax authority (DGII) to facilitate payments and reporting deadlines and suspend the "Agreement on Anticipated Prices" for the all-inclusive tourist sector. For tax reports and payments waivers: all employer is automatically qualify for the new payments and reports schedules. For APA prices, only tourist sector provider will benefit with the measures;

For financial relive, the National Monetary Board authorize to financial sector providers to avoid the reporting on credit payments defaults for 60 days. There is no prerequisite to obtain such waiver.

Another state aid is the FASE program, designed to support formal workers on a transitional basis (during the months of April and May) with a cash transfer consisting of a portion of the worker’s salary coming from the Dominican Government.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

The Dominican State shall provide a minimum of RD$5,000 and a maximum of RD$8,500. In case the contributor earns a salary of RD$5,000, the state subsidy will cover 100% of this salary. Instead, if the employee salary above RD$5,000, the State will cover 70% and the employer 30% of that value. This subject to the state contribution having a ceiling of RD$8,500.

As to the form and specific date of payment, the Dominican Government will transfer its contribution to the worker directly into the payroll account reported by the employer. Payments shall be carried out exclusively on 7 April 2020 and 21 April, as on 7 May 2020 and 21 May 2020, no possibility to opt for retroactive payments. If the employee does not have an account payroll bank, the Dominican Government will open one at the Banreservas, process that will take approximately five working days.

Requirements to be met:

  • The worker must be previously included in the TSS and be contributing in the same;
  • The operations of the company must be suspended, partially or totally, in reason for the social distancing measures adopted by the Dominican Government to mitigate the spread of Covid-19.

Applicants must register by means of the form provided for these purposes on the web portal of Ministry of Finance, whose link is https://www.hacienda.gob.do/. They will be asked for their RNC, the name of the company, the contact and the details of the employees to be included in the program.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 12 June 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.