Table of Contents

Federated States of Micronesia

Table of Contents

Currency

United States Dollar

Payroll Frequency

Monthly

Employer Taxes

7.5%

About Federated States of Micronesia

Micronesia is a collection of beautiful tropical islands situated in the western Pacific Ocean. It is composed of four main island states: Yap, Chuuk, Pohnpei, and Kosrae. Known for its pristine beaches, crystal-clear waters, and vibrant marine life, Micronesia is a paradise for nature lovers and diving enthusiasts. The islands are surrounded by stunning coral reefs, offering excellent opportunities for snorkeling and scuba diving to explore the colorful underwater world. Beyond its natural beauty, Micronesia is rich in cultural heritage, with traditional practices and customs still embraced by the local communities.

Employment Relationship

• Permanent Employment

Employment relationships in the private sector are governed by the principles of individual employment contracts, while public sector employment relationships are determined primarily by reference to constitutional, statutory and regulatory provisions.  There is no right to continued private sector employment. Employees who have completed their probation (according to their contracts) are considered permanent. The employment-at-will doctrine avows that when an employee does not have a written employment contract and the term of employment is of indefinite duration, the employer can terminate the employee for good cause, bad cause, or no cause at all.  In the Public Employment Law, permanent employees are those who are appointed to a position in the public service after successfully completing a probation period. They are not employed through a contract that has a specific date of termination.

• Fixed-Term or Specific-Purpose Contracts

The Federated States of Micronesia has employment at will in the private sector where the employment can be terminated at any time, for any reason, by either party. The terms of employment relationship are governed by employment contracts. There are no specific provisions on fixed-term employment in the private sector. In the public sector, employees can be hired for a fixed term.

• Temporary Employment Contratcs

The Federated States of Micronesia has employment at will in the private sector where employment can be terminated at any time, for any reason, by either party. The terms of employment relationship are governed by employment contracts. There are no specific provisions on temporary employment in the private sector. In the public sector, employees can be hired on a temporary basis for positions required in public interest. Such roles do not exceed 6 months' duration. In case of emergencies, temporary employees can be hired for a maximum of 10 days.

Probationary Period

In the Federated States of Micronesia, private sector employees can be subject to a probationary period if it is included in their employment contract. In the public sector, there is a mandatory probationary period of at least 6 months, not exceeding 1 year.

Working Hours

There are no statutory limits on working hours in the Federated States of Micronesia for private sector. Working hours are agreed upon in the employment handbooks or contracts. In the public sector, standard working hours are eight hours a day or 40 hours a week.

Holidays / PTO

• Statutory Holidays

X

• Paid Annual Leave

In the Federated States of Micronesia, annual leave for private sector employees are determined according to the information provided in their workplace employee handbook or employment contract. In public sector, employees are granted annual leave as per their regulations.

• Sick Leave

Sick leaves for private sector employees are granted according to their employee handbook or employment contracts. In order to be eligible to be paid sick leave, an employee must be ill and submit proof of the same. Public employees are also entitled to sick leave as per their regulations. Unexcused absences cannot be replaced by sick leave days. Employers can discipline their employees for such absences.

• Maternity Leave

There is no statutory maternity leave for private sector employees in the Federated States of Micronesia. Public sector employees receive a paid maternity leave for 12 consecutive weeks per 12-month period. Maternity leave applies to all national employees, regardless of employment status, whether permanent or probationary status, and whether a public service or exempt employee. Paid maternity leave does not accumulate for any subsequent use if not used by an employee before the end of each calendar year. Maternity leave cannot be replaced by annual leave or sick leave. Employers can ask their employees to provide a doctor’s certificate indicating general condition during pregnancy and the expected delivery date.

• Paternity Leave

There are no provisions for paternity leave in the Federated States of Micronesia.

Termination of Employment

• Notice Period

There is no statutory requirement for notice period in the private sector in the Federated States of Micronesia. Employers can include the required notice period in their employee handbooks or employment contracts. The Supreme Court has ruled that where an employer terminates an employee without proper notice the termination will be given effect at the end of the proper notice period and the employee is entitled to any compensation they would have received during that period. Employees can be terminated without notice only in case of justified reasons.  In case of dismissal of a permanent employee in the public sector, a written notice setting forth the specific reasons for the dismissal must be given. A copy of the notice must be sent to the Personnel Officer.  

• Severance Benefits

There are no statutory provisions for severance pay in the Federated States of Micronesia.