Employment
No unified labour code; public service rules and state regulation
There is no comprehensive national private-sector labour code. Public employment is regulated nationally and by each state, and private employment is largely contractual.
Key rules
- Jurisdiction — Public service rules are national for national employees and state-level for state employees. Private-sector standards, including minimum wages, are set by the states.
Governing law
- FSM Code, title 52public service system
- State labour and minimum wage legislation
- FSM Social Security Acttitle 53
- Foreign Investment Act 1997employment conditions
In practice
The absence of a general labour code is the defining feature. National law regulates the national public service through title 52, with grades, discipline and appeal rights, and each state does the same for its own workforce. Private-sector employment depends on contract, supplemented by whatever minimum wage and conditions legislation the relevant state has enacted, which means entitlements genuinely differ between Chuuk, Kosrae, Pohnpei and Yap. There is no general unfair dismissal remedy and no framework statute for collective bargaining, so a dismissed private employee usually pleads breach of contract. Social security contributions under title 53 are mandatory nationwide and fund pensions, disability and survivor benefits, and they are the one employment obligation that is uniform across the federation.