Laws and Policies in Guam

Employment Contracts in Guam

Because Guam is a US territory, employment practices are based on US-style “employment at will” for most private employers, subject to federal and local labour laws.

Contract Form

• Employment can be written or verbal, but written employment agreements/offer letters are strongly recommended, especially for professional roles.
• Contracts/offer letters usually specify:
  • Job title and duties
  • Start date
  • Base salary or hourly rate
  • Work schedule (full-time/part-time)
  • Benefits (health, PTO, bonuses, etc.)
  • Reporting lines
  • At-will relationship (where applicable)

At-Will Employment

• In typical private-sector relationships (not union or government roles), employment is “at will”, meaning either party can terminate the relationship at any time for any lawful reason (or no reason), subject to:
  • Anti-discrimination laws
  • Contract terms
  • Public policy exceptions

Union & Government Roles

• Government employees and some unionized positions follow specific contracts or collective bargaining agreements (CBAs), with additional protections and procedures.

An EOR in Guam ensures offer letters and contracts are US-compliant, include appropriate at-will language (where applicable), and adhere to federal and Guam territorial law.

---

Working Hours in Guam

Working time is largely governed by US federal law (FLSA) and local practice.

• Standard full-time schedule: ~40 hours per week (8 hours/day, 5 days/week).

Overtime

• Covered by the Fair Labor Standards Act (FLSA):
  • Non-exempt employees must receive 1.5× their regular rate for all hours worked over 40 in a workweek.
• Certain roles may be exempt from overtime (e.g., executive, administrative, professional), based on US exemption criteria (duties + salary thresholds).

Breaks & Rest

• Federal law does not mandate meal/rest breaks, but short breaks (typically 5–20 minutes) are considered paid time if offered.
• Many employers provide a lunch break (often unpaid) and short paid breaks by policy.
• Shift and scheduling norms are set by employer policy and any applicable agreements.

---

Employee Leave in Guam

There is no US federal mandate for paid vacation in the private sector, but leave practices in Guam generally follow US norms plus any local or company-specific policies.

Annual Leave / Vacation

• No statutory minimum paid vacation for private employers.
• Many employers offer 10–15 days of paid vacation per year for full-time staff, increasing with seniority.
• Government and unionized roles usually have structured leave scales.

Sick Leave

• No federal requirement for paid sick leave for most private employers, unless covered by policy or contract.
• Many employers provide 5–10 days of paid sick leave as a company benefit.
• Serious health conditions may fall under US FMLA-like protections if eligibility thresholds are met (employer size, tenure, hours, etc.).

Family & Medical Leave

• Applicable US laws such as the Family and Medical Leave Act (FMLA) may apply to Guam employers that meet the eligibility criteria (typically 50+ employees within a 75-mile radius and employee tenure/hours requirements).
• FMLA provides unpaid, job-protected leave for qualifying events (birth/adoption, serious health conditions, care for a family member, etc.).

Maternity & Paternity Leave

• No general federal requirement for paid maternity/paternity leave in the private sector.
• Eligible employees may use FMLA (unpaid) and any employer-provided paid leave (e.g., PTO, short-term disability, company maternity programs).

Public Holidays

Employees in Guam observe both US federal holidays and certain local territorial holidays. Common paid holidays (depending on employer policy) include:

• New Year’s Day
• Martin Luther King Jr. Day
• Presidents’ Day
• Memorial Day
• US Independence Day (July 4)
• Labor Day
• Thanksgiving Day
• Christmas Day
• Local Guam holidays (e.g., Guam Discovery Day)

Working on a holiday is usually paid at a premium or compensated with an alternate day off, depending on employer policy.

---

Employee Benefits in Guam

Because Guam is under US jurisdiction, employers and EORs generally follow US-style benefits structures, with some local adaptations.

Core Statutory Elements

1. Social Security & Medicare (FICA)
   • Employer: 6.2% Social Security + 1.45% Medicare
   • Employee: 6.2% Social Security + 1.45% Medicare
2. Federal & Guam Income Tax Withholding
   • Employers must withhold applicable income taxes from wages and remit them.
3. Unemployment Insurance
   • Employers pay unemployment tax under Guam’s unemployment insurance scheme (similar to US FUTA/SUTA structures).
4. Workers’ Compensation
   • Employers must carry workers’ compensation insurance to cover work-related injuries and illnesses.

Common Employer-Provided Benefits

To attract and retain talent, many employers (and EORs) in Guam offer:

• Health insurance (medical, sometimes dental/vision)
• Group life insurance
• Short/long-term disability coverage
• Paid vacation and sick leave
• Retirement/401(k)-type plans (with or without employer match)
• Bonuses and incentives
• Training/education assistance

Your EOR structures benefit packages in line with US regulatory requirements and Guam market expectations.

---

Payroll & Tax in Guam

Payroll Currency

• All wages are paid in US Dollars (USD).

Payroll Frequency

• Common frequencies: biweekly or semi-monthly; some employers pay weekly.

Income Tax

• Guam operates an income tax system mirroring the US Internal Revenue Code, with tax administered by the Guam Department of Revenue & Taxation rather than the IRS.
• Employers must withhold:
  • Guam income tax (aligned with US brackets, but remitted locally)
  • Employee Social Security and Medicare contributions

Employer Payroll Obligations

• Withhold and remit income tax and FICA contributions.
• Pay employer FICA and unemployment taxes.
• File employment tax returns as required by Guam authorities.
• Provide annual wage statements (similar to W-2 equivalents under Guam tax rules).

A Global EOR with US/territory expertise handles all these complex payroll and tax requirements, ensuring full compliance.

---

Employment Laws & Compliance in Guam

Key frameworks include:

• US federal laws, such as:
  • Fair Labor Standards Act (FLSA) – minimum wage, overtime, non-exempt/exempt rules
  • Title VII of the Civil Rights Act – anti-discrimination
  • ADA, ADEA, Equal Pay Act, etc.
• Guam territorial labour and employment statutes
• OSHA and other occupational safety standards

Minimum Wage

• Guam follows its own minimum wage, closely tied to the US federal minimum (and may be equal to or higher than it, depending on legislation).
• Employers must pay at least the current legal minimum wage for non-exempt employees.

Termination Rules

In private-sector at-will employment:

• Either party may terminate employment at any time, for any lawful reason.
• Employers cannot terminate for discriminatory, retaliatory, or otherwise unlawful reasons.
• No statutory severance requirement for at-will employees, unless:
  • Provided by contract, policy, or collective agreement, or
  • Required in specific government/union contexts.

Non-Discrimination & Harassment

Employers may not discriminate based on:

• Race, color, religion, sex, national origin
• Disability
• Age (for protected age groups)
• Other protected characteristics under federal/territorial law

Anti-harassment policies, training, and complaint procedures are essential. An EOR ensures your local employment practices respect US federal EEO standards.