When building your workforce in Guam, learn how to incorporate mandatory benefits and valuable perks to attract local top talent. 

Guam is considered a hidden gem in the Pacific Ocean, offering a strategic location, a robust economy, and an educated workforce. Guam is an unincorporated US territory but has focused its efforts on attracting foreign direct investment (FDI) through initiatives such as the Guam Foreign Investment Equity Act. The Act encourages investment by reducing the taxes placed on foreign businesses while strengthening economic development. 

Guam’s economic growth is driven by U.S. federal spending and the expansion of the tourism sector. Tourism accounts for 60% of Guam’s GDP and totaled $1.4 billion in revenue in 2020 prior to the pandemic. Guam’s location makes it a trading hub between America and Asia, and its advanced telecommunications infrastructure supports rapid and uninterrupted global communication. 

Whether you are a small business interested in international expansion or a large company looking for a location with investment potential, Guam provides ample professional opportunities in addition to a skilled and motivated workforce. 

When you’re ready to hire a workforce and expand your business, the first step is to follow the labor laws in Guam. Guam’s employment regulations protect employee and employer rights and break down statutory employee benefits. Complying with local labor statutes will prevent penalties such as fines of up to $2000 and possible imprisonment. Furthermore, awareness of employee benefits in Guam can help you attract the very best employees in a competitive environment. 

To make compliance easier and more efficient, this guide explains how employee benefits can help you establish a productive workforce and why more international businesses rely on an Employer of Record (EOR) in Guam to guarantee adherence to labor law from expansion to onboarding new hires. 

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Guam Employment Laws

The Department of Labor in Guam governs the employment relationship. Labor laws such as the Fair Labor Standards Act and the Fair Employment Practice Division set out the procedures employers must follow when hiring and establishing a workforce to protect the rights of employees. 

An overview of the labor law in Guam will help you effectively hire a workforce, onboard employees, and administer statutory employee benefits. 

Employment contracts

The employment contract in Guam can be written or verbal for both fixed and indefinite contracts; however, written contracts are recommended because they document the employment relationship and protect the legal interests of employers and employees. 

Contracts can be in English or in a language preferred by the employee to ensure that they understand the proposed terms and conditions. The Guam employment contract must consist of the following: 

  • Job roles and responsibilities
  • Employee and employer details 
  • Work hours
  • Salaries
  • Employee benefits 
  • Clauses for termination

Termination of Employment 

Guam follows “at-will” employment laws allowing employers to end the employment contract at any point and for any reason excluding any form of discrimination or prejudice. 

Most employers list the conditions for dismissal in the employment contract to prevent confusion or disputes. An employer does not have to issue a notice upon terminating the employment contract. 

Minimum Wage Law 

According to the Guam Minimum Wage Act, the minimum wage is $9.25 per hour. 

Social Security Regulations 

Government employees do not pay social security contributions; however, they do contribute to a retirement fund. Private sector employees make social security payments toward retirement and disability benefits. 

Leave Schemes 

Employees in Guam are entitled to annual paid leave, paid time off, maternity leave, sick leave, jury duty leave, and family medical leave. 

How to maintain compliance with Guam labor laws

From drafting employment contracts to paying employee benefits in Guam, every regulation serves as a guideline to maintain workers’ rights while protecting your business against non-compliance. 

You can hire a legal team to help you with compliance, or you can partner with a Guam EOR to adhere to the labor laws while managing payroll, benefits, and employee onboarding. International companies can benefit from EORs in that they don’t have to cover the costs of establishing a legal entity. 

Mandatory Employee Benefits in Guam 

The mandatory benefits for employees are required by law to protect employees in terms of working hours, wages, leave, and safe working conditions. To hire job candidates, you must satisfy these requirements by stipulating the benefits in the employment contract. These statutory benefits are explored in more detail below: 

Social Security Contributions

Private employees and employers in Guam must pay social security contributions of 6.2% of their payroll to the Old Age, Survivors, and Disability Insurance, or OASDI. 

Guam employees make an additional contribution of 1.45% toward Medicare. 

Annual Paid Leave

Annual leave for private employees in Guam is not legally required, but employers are encouraged to offer it as an incentive. Employees who are permitted annual leave can accumulate up to 320 hours of paid leave. 

Working Hours

Employees generally cover a seven-day workweek of 40 hours. Workers who fall under the Fair Labor Standards Act, such as police officers, nurses, and firefighters, do not adhere to the 40-hour workweek in Guam. 

Overtime Pay

In Guam, the overtime pay is regulated by the Fair Labor Standards Act. It requires that employees receive 1.5 times their standard pay rate for any hours worked over the regular 40-hour workweek. Employers cannot exchange overtime work for compensatory time off or cash wages. 

All employees in Guam are entitled to time off over the public holidays. While Guam has four official public holidays, it incorporates the additional eight holidays celebrated in the United States. Public holidays that are celebrated in Guam: 

  • January 1, 2025: New Year’s Day

  • March 4, 2025: Guam History & Chamorro Heritage Day

  • May 27, 2025: Memorial Day

  • September 2, 2025: Labor Day

  • November 11, 2025: Veterans Day

  • December 9, 2025: Santa Marian Kamalen Day

  • December 25, 2025: Christmas Day

Employees accrue sick leave at a rate of four hours for every two weeks worked.

Maternity Leave

All full-time female workers with an indefinite contract receive 20 days of maternity leave. Under the FMLA, eligible employees are entitled to unpaid maternity leave of 12 weeks. 

Paternity Leave

Paternity leave of 20 days is available for fathers who are permanent employees. Both paternity and maternity leave can be used as time off when adopting a child in Guam. 

Family Medical Leave (FMLA)

The Family Medical Leave Act, or FMLA, provides employees with 12 weeks of paid or unpaid leave after childbirth or if an employee sustains a serious injury and is unable to work. 

Military Leave

Government employees in Guam who have served in the U.S. military, such as the National Guard and Armed Forces, are permitted 15 days of fully paid leave for the fiscal year. 

Severance Pay

Guam employers are not legally required to pay their employees severance. Only if severance pay is stipulated in the employment contract will the employee receive the agreed-upon compensation. 

Supplementary Employee Benefits in Guam

Guam employers are not mandated to provide private health insurance or severance pay; however, offering supplementary benefits in an employment contract will certainly attract talented job candidates in high demand. The negotiated benefits also provide employees with greater job security by ensuring they feel valued, increasing retention rates. 

To offer your Guam workforce the best start, common supplementary benefits are discussed below: 

  • Private Health Insurance: While workers in Guam have access to health care, employers can provide extra health insurance to retain the most talented employees. Private medical insurance can include a dental plan or broader medical cover.
  • Additional Paid Leave: Employers can incentivize employees with additional annual leave, sick leave, or time off for family-related matters.
  • Severance: While severance is not legally required, it can be negotiated and included in the employment contract. Employees will have peace of mind that should their contracts be terminated, they will be compensated.

Optimize Employee Benefits with Remote People

Guam is known for its economic growth and investment opportunities across tourism, agriculture, manufacturing, and pharmaceutical industries. Foreign businesses are attracted to its shores for investment incentives, including tax rebates, financial aid, and a highly skilled workforce. 

To take advantage of the expansion opportunities in Guam, companies must follow the local labor laws to hire a workforce, which includes providing employee benefits. 

From annual leave and working hours to overtime pay, mandatory employee benefits in Guam will help you appeal to the most talented job candidates, boost employee morale, and increase retention rates. 

The simplest way to optimize your employee benefits is to rely on the EOR services provided by Remote People. Remote People’s EOR solutions assist with payroll, benefits, and compliance when hiring a workforce in Guam. 

Don’t hesitate to contact Remote People to make your expansion into Guam easier and more effective by aligning employee benefits with the needs of your workforce and in compliance with local labor laws.