Management of Staff and Compliance: Part 3

In this HR Q&A series, Tania Nicholls (TN), Human Resources Manager, and Sandra Gibbs (SG), Senior Staffing Services Officer at Blue Sky Luxury, answer frequently asked questions surrounding employment at villas and other holiday homes.

You can find Part 1 which discusses many of the responsibilities of an owner and employee in the employment process here.

In Part 2, they navigate through the intricacies of employee time off, covering everything from holidays to maternity leave. Read here.

Q: Is there a standard every year or every ‘x’ number of years that owners should consider staff increases due to inflation/cost of living?

TN: A lot of employers may look at what the inflation rates are.

It is difficult for owners to give increases based on just inflation.

What is actually happening on the ground at the property, as a business, is also a critical thing to consider – reviewing revenue for rentals, for example.

Salary increases can take different forms – cost of living increases, merit pay increases (the better the property is performing based on the employee’s direct effort, the better the increase).

Reviewing salaries/wages every 2 – 3 years is fair; a review may not necessarily mean that an increase will be granted however an owner should take performance and inflation when considering.

SG: There should be a period that an owner should agree to review wages for the employees to determine if increases based on cost of living for example, can be granted.

Our team can also assist do a wage analysis for positions at similar properties for owners to help with their decision on how to proceed with increases. 

Q: What about the concept of bonuses and that traditionally, it was seen as a given like at Christmas as opposed to some way of tying it again, to performance/merit?

Bonus is a completely discretionary act, not something employees are entitled to.

An owner is not obligated to give a bonus.

However, owners are entitled to decide how they wish to reward their employees as these properties are their homes. 

Q: Can bonuses be paid without tax?  Can the owner just give the employee a lump sum of money as a gratuity?

All earnings must be taxed hence the term pay as you earn (PAYE).  Employers have, as an attempt to help their staff, found creative ways to pay bonuses as gifts, etc; however, the correct way for bonuses to be paid is through the payroll system where all earnings are taxed.

Q: If I am an owner looking to do a significant refurb of my property which will put it out of commission (no bookings can be taken) for several months and therefore the staff cannot work, what options do I have to protect my interests as well as those of the staff?

TN: Depending on the circumstances, some owners may have other properties on island and they wish to have the staff work there for the refurbishment period.  This is one option.

Another option is allowing the employee(s) to take holiday just remembering that you have to give them a minimum of two weeks’ notice to do so or full agreement from that employee(s).

Another option is to place the employee(s) on layoff for a period; up to 12 weeks consecutively however you must bring the employee(s) back out to work at that time as if it goes past this, it will trigger severance if the employee applies for it through the National Insurance; they can state there is no opportunity for work for them.

However, if the employee(s) trigger it National Insurance will alert the employer to explain and ask if the owner is in a position to provide work for them.

An owner can bring the staff back to work for a period of time before putting them on layoff again otherwise an employee can then still trigger the severance.

Another option as some owners do and have done, is to continue to pay the employee(s) as normal during the period when there is no work at the property.

SG: The employee can be asked to take their allotted holiday during this time that the property is out of commission. 

The employee can also be put on reduced hours once a discussion with them is had – an employee who works 5 days a week can be put on a 3-day work week during the refurbishment – this will have to be agreed on and put in writing and signed.

The employee can also be put on ‘lay off’ and the NIS will pay the employee during this time up to a maximum of 12 weeks consecutively at 60% of their earnings.  The employee should return to work for a period after this 12-week period so as not to trigger severance.

Q: Clause for retirement in statement of employment particulars – what does an owner need to do? 

TN: There needs to be a defined process for retirement for employees; it is not a case that when employees reach retirement age, they can automatically be sent home.

There is no employment law in Barbados regarding retirement age; so an employee who wants to work past retirement age and is able to work, can and for an owner to just ‘let them go’ would be deemed as termination of the employment because there is no law that states when you reach ‘x’ age, that an employee must stop working.

The owner can choose to have a policy and have it written in the contract that once the employee is approaching retirement age (67 for example), a consultation will happen ‘x’ months prior to this (let us say one year out) about their upcoming retirement age.

A discussion will then happen to help the employee prepare for the transition out of the position. The policy must state clearly that the particular age e.g. 67 is the retirement age of the company and will automatically trigger the end of employment for the employee.

You can also state in the contract that should an employee wish to work past their retirement age, the employee should apply in writing to the owner for review and response. A request to retire early would just be considered a resignation.

The owner needs to think about various things – you need to create a safe environment for the that aging employee (consider doctor’s visits, ergonomic issues).  Employees need to be in an environment where they can age and still work safely and comfortably.

Q: So, if I am an owner who is the position where I have an employee who is at retirement age or is past that age and the job is really too much for them, what do I need to do?

Start with a conversation to discuss the challenges of the job; it requires a lot of energy, stress on the body.  Explain to the employee that yes, they have been doing this for a while however they are no longer in the position where they can maintain how they used to – have you thought about retirement?  There is genuine concern that as an employer, they also need to look out for the employee.

If the employee says yes, the employee can write a letter stating that as agreed, they will retire upon retirement age or on the set agreed date.  This then becomes the employee’s effective date of termination.

If the employee says no, and as the owner, you feel pressed, there are options such as package to encourage the employee to go off on retirement as opposed to having to go through the managing process to documenting the various ways the employee can no longer do their job.

If as an owner, I decide that I am going to go through a restructure at my property, once an employee has gotten past the retirement age, in Barbados and they are collecting a pension for the National Insurance, the employee will not be eligible for a severance payment.  The termination will occur – consultation period (minimum of six weeks), accrued vacation and notice period will apply – and this will be due to the employee however there will be no severance package. 

SG: When an employee reaches pensionable age, it is not a given that the employee should stop working.  The specifics on how this should be dealt with must be written in the statement of employment particulars or policies.  An employee can request to stay on by submitting this in writing.

Q: Comments on NIS and its benefits?  Payments for sick leave etc and the importance for the employer to pay in their contributions and make sure deductions have been made from the employee and pay this in – repercussions for not following the law?  Any other taxes or responsibilities?

Yes there are consequences for not following the law – fine, imprisonment!

If the NIS does an audit, they will advise of their findings and give the owner the opportunity to make it right

What usually happens however is that an employee will call NIS to check or may go on sick leave to then find out that they are not getting paid by NIS because there have been no contributions.

It is illegal to not deduct for NIS and it is also illegal to deduct for NIS and not pay it in the contribution.

The NIS is a very good benefit.  An employee’s benefit at NIS is for you and not the place where you work.  You do not lose the benefit if you leave one employer. 

There is no law in Barbados that requires employers to pay their employees when they are out sick, so the only protection employees have, is that NIS benefit.

Owners recognise and are invested in caring for the ‘whole’ employee and that they are contributing to something that will benefit them.


There is also PAYE (Pay A You Earn) – this is calculated in scales.  For weekly paid employees working for $480.77 is the threshold (this amount and above) from when they start to be taxed for PAYE.

There is a $25,000 threshold for the year that is tax free.

This information is to be uploaded monthly to the government on the employees’ behalf. 

If you missed Part 1 and Part 2 of this Q&A series, you can find the links right below.

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