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$249/month
$49/month
2% of gross salary / month
Consisting of around 2,000 islands spread across almost three million square miles of the Northwestern Pacific Ocean, the Federated States of Micronesia are home to a disparate population of just 100,000 people. It has a fluctuating but steadily growing economy and reached a total GDP of $460 million in 2023. Public services, agriculture, fisheries, and tourism are the mainstays of Micronesia’s economy though the country has recently begun exploring opportunities in renewable energy, seabed mineral mining, and other ocean-based industries.
Micronesia has a small but young labor force with varying levels of education. While many different languages and dialects are spoken, the official language of Micronesia as a whole is English. These factors, combined with limited employment options close to home, have led to a long-term trend of younger workers emigrating, though this has slowed in recent years. High demand for new employment opportunities within the islands and a competitive average wage of approximately $1,800 per month make Micronesia an attractive hiring option for global businesses.
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Our Micronesia EOR solution is the most affordable on the market.
Fast Micronesia onboarding, hire in as little as 24 hours.
We draft compliant Micronesia labor contracts.
We manage all Micronesia mandatory benefits.
It doesn’t stop with Micronesia — we hire employees globally.
An Employer of Record (EOR) is an independent human resources management service. In Micronesia, an EOR allows foreign businesses to gain access to local labor pools and business markets by assisting in every element from recruiting and onboarding to payroll and the administration of leave. As part of its comprehensive suite of services, an EOR will also serve as a local entity on behalf of its clients and assume liability for compliance with local laws and regulations.
Though the two types of service are often discussed interchangeably, it is important to recognize the difference between an EOR and a Professional Employer Organization (PEO). A PEO offers many of the same services as an EOR but does so by working in partnership with its clients. It does not serve as a local entity and does not assume sole responsibility for legal compliance.
Working with a Micronesia EOR unlocks several potential benefits for international businesses seeking to expand into the region. As a local expert, an EOR can help overcome language barriers and cultural differences.
As an alternative to forming a local legal entity, it can speed up the process of starting operations. In addition to this, some of the key benefits of an EOR in Micronesia include:
Horizons stands out as a Micronesia EOR through:
A Micronesia EOR works as an outsourcing service for international businesses wishing to establish a presence and manage a labor force in the region. While the specific arrangement between every EOR and client will be different, most include several key tasks. These include:
A key service provided by an EOR in Micronesia is managing compliance with the employment regulations of the region. In order to meet this responsibility, an EOR should be wholly familiar with all applicable labor laws.
Labor regulations in the Federated States of Micronesia are made additionally complicated by the fact the territory comprises four different states – Yap, Chuuk, Pohnpei, and Kosrae – each with its own framework of rules and requirements. Whichever state(s) an international business operates in, using written contracts to confirm employment is recommended as best practice.
No probationary period.
At completion of the project.
Not applicable
Typically up to 3 months
30 days
Not applicable
Typically up to 3 months
30 days
2 week's salary per year of service
In general, a regular work week in Micronesia is considered to be 40 hours over any number of days. However, this is only a legal requirement in the public sector. For private sector employees, there are no statutory limits on working hours. Therefore, it is vital these details are negotiated, agreed, and included in every contract of employment. Any overtime expectations, rights of refusal, and rates should also be determined before a contract is signed.
150% of the standard hourly rate
200% of the standard hourly rate
200% of the standard hourly rate
Employees in Micronesia are entitled to paid time off for several public holidays each year. These include six dates which are common to all Federated States of Micronesia, plus up to two more specific to each of the four states.
| Date | Holiday name |
|---|---|
| 1 Jan 2025 | New Year’s Day |
| 11 Jan 2025 | Kosrae Constitution Day |
| 28 Feb – 1 Mar 2025 | Yap State of Micronesia |
| 8 Mar 2025 | International Women’s Day |
| 31 Mar 2025 | Micronesian Culture and Traditions Day |
| 18 Apr 2025 | Good Friday |
| 9 May – 10 May 2025 | Constitution Day |
| 21 Aug 2025 | Gospel Day |
| 8 Sep 2025 | Kosrae Liberation Day |
| 11 Sep 2025 | Pohnpei Liberation Day |
| 1 Oct 2025 | Chuuk Constitution Day |
| 24 Oct 2025 | United Nations Day |
| 3 Nov 2025 | Independence Day |
| 8 Nov 2025 | Pohnpei Constitution Day |
| 11 Nov 2025 | Veterans Day |
| 23 Nov 2025 | Presidents Day |
| 27 Nov 2025 | Thanksgiving |
| 24 Dec 2025 | Yap Constitution Day |
| 25 Dec 2025 | Christmas Day |
Other forms of paid time off in Micronesia, outlined by the COM-FSM Board Policy 6010, include maternity leave, bereavement leave, and, in some circumstances, time off for a sabbatical. The specifics of entitlement for each depend on the type of employment and the state by which it is governed. It is recommended that all provisions for paid time off be detailed in employment contracts.
no leave entitlement
13 days of paid leave annually
13 days of paid leave annually
13 days of paid leave annually
Micronesian workers who are suffering from sickness or injury are also entitled to some time off with pay. Again, the details and rules governing this can vary dramatically and should be formally agreed upon by contract before employment commences.
(percentage of regular wages owed to the employee)
no leave entitlement
13 days of paid leave annually
13 days of paid leave annually
13 days of paid leave annually
Unpaid (unless specified in the employment contract or under special circumstances)
Unpaid (unless specified in the employment contract or under special circumstances)
Unpaid (unless specified in the employment contract or under special circumstances)
In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.
In Micronesia, maternity and paternity leave policies are not as extensively regulated by a national labor code as in some other countries.
Maternity leave for female employees typically ranges between 6 to 12 weeks. This is the most common practice, with some employers offering more generous leave depending on the contract or employer policies.
Paid maternity leave is not universally guaranteed by law in Micronesia, so it depends on the employer. Government employees or workers in well-established companies may be entitled to paid maternity leave, but in other cases, it might be unpaid or only partially paid.
In addition to public holidays, workers in Micronesia are entitled to annual vacation leave as determined by the College of Micronesia-FSM Board Policy 6010. The amount of annual leave a worker can take depends on the length of service. Minimum mandatory leave begins at 13 days per year during the first five years of service. It then rises to 19.5 days per year up to and including the 10th continuous year of service. Finally, workers serving for ten years or more are offered a minimum of 26 days annual leave plus public holidays each year.
Another reason that proper employment contracts are essential for both employers and employees in Micronesia is the Federation’s employment-at-will doctrine. This means there is no nationally recognized regulation dictating mandatory notice periods or severance pay. If it is not properly detailed in the contract, all parties are able to walk away from a labor arrangement without notice or compensation. For the protection of both sides, it is vital termination and severance policies are stated clearly in each employee’s contract.
The compulsory social security contributions are managed by the Social Security Administration of the Federated States of Micronesia (FSM). The contributions fund retirement benefits, disability benefits, and survivor benefits for workers in the country.
Foreign workers employed in Micronesia are also required to contribute to the social security system if they are working under local contracts. Their contributions are managed in the same way as for local employees.
Micronesia employs a progressive tax rate system for individual income. Rates ranges from 10% to 30% depending on the salary bracket.
Micronesia does not have a universal or comprehensive national health insurance program that covers all residents. Instead, health services are typically paid for out-of-pocket or through private insurance.
Some basic health coverage might be available through the social security system, particularly for retirees or those with disability benefits, but this coverage is limited.
While public sector workers are protected by minimum wage laws, which guarantee payment of between $1.42 and $2.65 an hour, depending on the state of employment, private sector workers receive no such rights. The only exception is in Pohnpei, where the minimum wage for all employment is $1.75 per hour.
Micronesia has no legal mandate for a 13th-month salary bonus or any other guaranteed bonus payments.
Rather than pay a percentage of every worker’s salary, as is common in most territories, social security contributions in Micronesia are expected to made at 7.5% of twice the salary of the highest-paid employee every quarter. This payment is currently required to be based on a minimum quarterly salary of $300 and a maximum of $7,000. However, it is set to rise by $1,000 each year to reach a new upper limit of $10,000 from 2028.
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An EOR in Micronesia is an experienced local service that has a full understanding of local labor laws, both at a federal level and for each individual state. By maintaining this knowledge and staying abreast of all developments, it is excellently positioned to ensure compliance with local regulations. In addition, an EOR serves as the legal employer of workers on behalf of its foreign clients and so accepts liability for any compliance failures that do arise.
Working with an EOR for hiring in Micronesia allows a business direct access to the best local talent via an agency that knows the complexities of the region. An EOR also serves as a legal local entity, saving the time-consuming process of establishing this and allowing hiring to commence within days or weeks rather than after months or even years.
Holiday Schedule in Micronesia [2025]
