Locked In: How Cayman’s New Section 64 Redefines Work Permit Mobility

Section 64 of the Immigration (Transition) Act (2022 Revision) (“the Act”) and its earlier iterations has long governed the circumstances in which a work permit holder may change employment in the Cayman Islands.  Historically, the provision operated as a relatively flexible mechanism, allowing movement between employers where special circumstances existed. With the enactment of section 29 of the Immigration (Transition) (Amendment and Validation) Act, 2025 (“the Amendment Act”) Section 64 has been repealed and replaced with a markedly different framework.

At the current time, it is understood that the Amendment Act is to commence on 1 March 2026.

HSM Partner, Alastair David, explores how Cayman’s new section 64 redefines work permit mobility.

Past Issues

In the past, the laws governing the ability of expatriates to change their employers has been slightly “hit and miss”.  At HSM Chambers we have heard of employees “self releasing” and been granted a new work permit much to the chagrin of their former employer.  Equally, the Immigration Authorities have gone through periods where it rigorously enforces the law in regard to changing employers thus causing employees serious issues.

It is understood that one of the reasons for the change in the Law was to stop the misuse of the Immigration system.  Anecdotally, it is understood that unscrupulous employers have applied for and been granted work permits for positions that do not exist.  This has resulted in expatriates coming to the Cayman Islands and finding that there is no job awaiting them and they then must search for alternative employment.  These expatriates are provided with a “release letter” and are then free to obtain alternative employment.

This article compares the former Section 64 of the Act with the newly enacted Section 64, and considers in particular the likely scope and effect of the “prescribed circumstances” referenced in subsection (5) of the new provision.

Section 64 under the Immigration (Transition) Act (2022 Revision)

Under the Act, Section 64 was framed as a permissive provision.  In general terms, a work permit holder could change employer during the currency of the permit where the Director of WORC or the Board was satisfied that special circumstances existed.  The list of “special circumstances” was not exhaustive and therefore many different circumstances could qualify.

The emphasis of the former provision was therefore on discretion and flexibility. Although the default position was that a work permit was tied to a specific employer, the legislation contemplated that employment relationships might break down or that labour market realities might require movement, and it vested decision‑makers with broad discretion to authorise changes on a case‑by‑case basis.

Section 64 of the Act also applied to whole of the nine years that the expatriate was in the Cayman Islands working via a work permit.

The New Section 64 of the Amendment Act: Structure and Effect

The new Section 64 represents a clear policy shift. The starting point is now an express statutory prohibition on changing an employer within the first two years of the grant of a work permit.

General Prohibition

Subsection (1) provides that a work permit holder “shall not change the person’s employer within the first two years of the grant of the work permit.” This establishes a rigid baseline rule which at first blush is more generous than the former section which applied during the currency of the work permit, whether that was in the first year or the ninth year of residence.

Domestic Helper Exception

Subsection (2) carves out a limited exception for domestic helpers, who may change employer within the first two years provided they are seeking employment as a domestic helper with another employer. This exception appears to recognise the particular vulnerabilities and employment dynamics associated with domestic work but also limits future employment only to a domestic setting, so therefore an expatriate cannot come to the Cayman Islands as a domestic helper and then three months later become a Food and Beverage Server.

Mandatory Departure Requirement

Subsection (3) introduces a significant enforcement mechanism. Where a work permit holder ceases employment within the first two years (and the domestic helper exception does not apply), the person must leave the Islands for a period of not less than one year before another employer may apply for a work permit in respect of that person.

This requirement fundamentally alters the consequences of early termination of employment, converting what was previously a regulatory issue into a mandatory exclusionary outcome, subject only to limited exemptions.

Exemptions and the Role of Prescribed Circumstances

Subsection (4) introduces a narrow pathway for relief. A work permit holder who ceases employment within the first two years may apply to the Director of WORC to be exempted from the one‑year departure requirement.

What is not clear is whether this exemption will be as “generous” as the previous “special circumstances”. The exemption mechanism appears to be tightly structured and depends on the existence of “applicable prescribed circumstances” and also the grant, in advance of the submission of a Work Permit, by the Director of WORC.

Subsection (5) requires that any application for exemption be accompanied by:

• proof of the existence of the applicable prescribed circumstance; and
• any other particulars as may be prescribed.

This wording is significant. It signals that:

1. Exemptions are not grounded in general notions of fairness or special circumstances;
2. Relief is available only where circumstances have been formally defined in subsidiary legislation; and
3. The burden rests squarely on the work permit holder to prove that those circumstances exist.

Likely Scope of “Prescribed Circumstances” under Subsection (5)

Although the Act itself does not define the prescribed circumstances, the structure and policy intent of the new Section 64 allow some reasonable inferences to be drawn.

Because Section 64 is going to be changed, we believe that the prescribed circumstances are likely to be narrow, specific and objectively verifiable. They may include, for example:

• termination of employment for reasons wholly outside the control of the employee, such as redundancy or business closure;
• serious breach of employment obligations by the employer, including non‑payment of wages;
• substantiated cases of abuse, exploitation or unsafe working conditions;
• circumstances where continued employment is impossible or unlawful;
• other humanitarian or exceptional grounds expressly set out in regulations.

What is notable is what is unlikely to qualify. General dissatisfaction with employment, better career opportunities, or voluntary resignation without compelling justification are unlikely to fall within prescribed circumstances, given the clear policy objective of limiting labour mobility in the early years of a work permit.

Procedural and Practical Consequences

Subsection (6) further tightens the regime by providing that an applicant for exemption may not work while awaiting determination of the application. This creates a period of enforced unemployment and financial vulnerability, even where an application is ultimately successful.

The combined effect of subsections (3) to (6) is therefore to strongly discourage early termination of employment, except in clearly defined and provable circumstances.

Subsection (7) preserves a discrete exemption for government employees affected by administrative rearrangements, reflecting the different policy considerations applicable to the public sector.

Comparative Assessment: From Discretion to Prescription

The contrast between the 2022 and 2025 versions of Section 64 is stark.

• The former regime relied on administrative discretion and flexible assessment of individual circumstances.
• The new regime appears to rely on statutory prohibition, mandatory consequences, and what we believe will be narrowly defined prescribed exceptions.

The indications are that the shift from “special circumstances” to “prescribed circumstances” is more than semantic. It represents a deliberate move away from case‑by‑case judgment toward a rule‑based system designed to reduce mobility, increase certainty, and advance broader labour market policy objectives.

Benefits to employees

While employees may be concerned about this change, all is not lost for them.  Provided the employee has been employed for more than two years, they are free to change employer, absent any enforceable contractual provisions.  This is certainly an advantage under the Amendment Act which will more than likely require employers to review their post termination restrictive covenants to ensure that they are enforceable and offer sufficient protection.

Equally, it appears that the drafters of the Amendment Act have potentially left a rather large gap in the Act which employees could take advantage of but it would require them to leave their employment before the commencement date of the Amendment Act and ensure that their work permit is cancelled before then.

This gap arises where a work permit holder ceases employment before the commencement date of the Amendment Act, but applies for a new work permit after the repeal of the former Section 64 has taken effect. In such circumstances, the former Section 64 no longer exists in law and cannot apply, having been repealed in its entirety. At the same time, the new Section 64 does not apply retrospectively and is triggered only where a person “ceases to be employed”, i.e. post commencement date and while the new provision is in force.

The result is a narrow intertemporal gap: the old law has been extinguished, and the new law does not reach backwards to regulate past cessations of employment. In the absence of an express saving or transitional provision, there is no statutory basis upon which either version of Section 64 can properly apply.

While this outcome may appear anomalous from an administrative perspective, it is entirely consistent with orthodox principles of statutory interpretation. Repealed provisions do not survive unless expressly preserved, and new provisions do not operate retrospectively unless clearly stated. Administrative inconvenience cannot justify reading words into the legislation, which are not there.

In practical terms, individuals falling within this category would be subject only to the general work permit application framework and prevailing policy considerations, rather than any specific restriction under Section 64. Whether this was an intended consequence of the legislative drafting, or an unintended lacuna, remains to be seen.

Attempts have been made to reach out to the authorities to seek clarity on this issue have not been addressed.

Conclusion

The new Section 64 fundamentally reshapes the legal position of work permit holders in the Cayman Islands. By imposing a two‑year lock‑in period, mandatory departure requirements, and a tightly controlled exemption process dependent on prescribed circumstances, the legislature has signaled a clear intent to prioritise employment stability over labour mobility.

Much will ultimately depend on how the prescribed circumstances are defined in the regulations and how strictly they are applied in practice. Until then, subsection (5) stands as the critical gateway provision: the narrow hinge on which any relief from the new regime will turn.