A number of confirmed changes to employment and immigration law in Bermuda are due to come into force in the year ahead, with further potential changes anticipated. This update sets out the issues that senior executives, in-house counsel and HR practitioners should be aware of.
Substantial changes to the private pension regime are already underway, with further changes coming later this year. It is now possible for both employers and employees to temporarily suspend 2% of their pension contributions, for a period starting from 1 January 2020 until the end of 2021, subject to certain conditions. Currently, standard mandatory contributions are 5% each.
As well as salary, wages, fees and commissions, the definition of 'pensionable earnings' (the basis on which pension contributions are calculated) now must include all bonuses and payments from profit-share schemes. Previously such sums were only included where they exceeded 10% of the employee's salary or wage for the relevant period.
From 2 March 2020, employers will need to provide pensions for all employees over the age of 23 who have not reached retirement age, save for American work permit holders who already contribute to a 401(k) pension plan and work permit holders whose permit is for a period of 12 months or less. Previously, the obligation to make occupational pension arrangements applied only to Bermudian employees and the spouses of Bermudians.
Other notable changes coming into effect on 2 March include:
- A requirement for employers to pay interest on any unpaid pension contributions.
- Enhanced powers for the Pension Commission, including the ability to refuse the appointment of a pension scheme trustee who is not deemed to be fit and proper or lacks the integrity and appropriate skill for the role.
A new ability for private sector employees to withdraw a lump sum of up to 25% of their pension on retirement will also come into force on a date to be confirmed. Currently, withdrawals can only be made in cases of financial hardship and with the consent of the Pension Commission.
This year may see specific data protection law introduced in Bermuda for the first time, under the Personal Information and Protection Act 2016 (PIPA). PIPA outlines the requirements for organisations that use personal information, as well as the rights that individuals have regarding the use of their personal information by organisations. Whilst parts of PIPA have already come into force, the substantive provisions have been in limbo pending the appointment of a Data Privacy Commissioner, who took office on 20 January 2020.
We are now expecting a date to be set when PIPA will become fully operational, as well as guidance to be published to help organisations that use personal data comply with their obligations. Employers should in any event start to prepare for compliance with PIPA, by understanding exactly what personal information they use, where that data is held, the purposes for which that data is used and where that data is transferred to and from. Changes to employment contracts and internal policies may also be required.
We are likely to see further development this year in the area of immigration reform. A bipartisan reform plan was expected to be unveiled last summer, but its introduction to the House of Assembly was delayed until the Fall, before being delayed further. It is expected that this plan, amongst other things, will set out amendments to the Bermuda Immigration and Protection Act 1956 in relation to so-called 'mixed-status families', where a parent has Bermudian status or a PRC (Permanent Resident's Certificate) but their child or spouse has neither.
We may also find out this year whether the Privy Council's decision in the long-running 'belonger' case will be subject to further challenge. When the judgement was delivered last year, the lawyer for the plaintiff indicated that they may attempt a further appeal to the European Court of Human Rights.
Enhanced maternity and vacation leave rights came into force on 1 January 2020, as well as a new right to paternity leave. At the time this legislation was brought in, the Government of Bermuda indicated that these were the first in a series of changes to employment law that it would bring forward. These include potential streamlining of the Tribunal system, strengthening protection against violence and harassment in the workplace and a new requirement that probationary periods should not be longer than is fair and reasonable.
This year promises to be another busy one for HR practitioners and organisations would be well-advised to ready themselves for the upcoming changes to the law in good time, and to keep an eye on the possible further changes to come.
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