Costa RicaCosta Rica

employer responsibilities
 - Costa Rica

Employer Responsibilities

Employer Responsibilities

Foreigners must be legal residents of Costa Rica in order to work in Costa Rica or have a work permit. People who carry a Costa Rican identification cards are eligible to work. Young adults under the age of eighteen must have a work permit issued by the National Childhood Institute (Patronato Nacional de la Infancia) in order to legally work.

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Working Hours in Costa Rica:

Working hours vary depending on previously arranged schedules between employer and employee.

Daytime working hours: Employees work eight hours a day, 48 hours per week. If the work performed is considered not to be unhealthy or detrimental to the employee's health by the Ministry of Labor in Costa Rica, employees may work up to 9 hours per day. For example, retail store's employees may work up to nine hours per day.

The private-sector labor week is 48 hours: Monday - Saturday, from 8 a.m. to 5 p.m.

There is usually one 45-minute lunch break and two 15-minute coffee breaks (one in the morning and the other in the afternoon.) Some private sector businesses do not operate on Saturdays and Sundays.

Mall business hours are Monday - Friday 8 a.m. to 9 p.m. and Sundays 11 a.m. to 6 p.m.   

Government employees work Monday - Friday 7:30 a.m. to 4 p.m. 

Most of the banks are open Monday - Friday 9 a.m. to 3 p.m.; banks located within malls open on Saturday from 9 a.m. to 12 noon.

Other banks open Monday - Saturday 9 a.m. to 9 p.m.

Evening Work Hours: Employees work 6 hours per night, 36 hours per week. Night shifts are from 6 p.m. to midnight or from midnight to 6 a.m.

Salaries:

The National Salary Council (Consejo Nacional de Salarios) - a group of government, labor, and worker chamber organizations - controls hourly wages and salary rates. Salaries increase twice a year based on the inflation index. The amount of salary increase varies between 4.5% and 5.5%.

Overtime Wages: Employer must pay overtime for all hours worked in excess of eight (8) hours per day. There are no restrictions on the number of overtime hours that an employee can work per day. The overtime must be paid in double time. 

Employee Benefits:

Companies must pay 23.5% of the total amount of the payroll in employee benefits, including Social Security, retirement and disability insurance, workman's compensation, and worker's required savings; employees pay 10% of their salary for these items.

  • Holidays are paid double time. 
  • Two weeks paid vacation per 50 weeks of work. 
  • A Christmas bonus (aguinaldo) paid in December to each employee. The amount of the bonus is calculated by adding the salaries paid to the employee between December 1st and November 30th (12 months) and divide that amount into 12. If your employee has not been working for you for a year, you will need to add the salaries that you have paid him/her since he/she has been working for you and divide the amount into 12. 
  • A four-month maternity leave; women are entitled to one month of maternity leave before the baby is due, and three months after the baby is born. 

    Termination Policy:

    Termination without Cause: when an employee is terminated without any reason, he or she must be compensated with:

    • A month's salary (Preaviso)
    • One-month salary per each year that the employee has been working at your company up to 8 years. (Cesantia) 
    • Two weeks paid vacation (if he or she has not taken it yet). 
    • A Christmas bonus equal to 12% of the employee annual salary.

      (*) If you give an advance termination notice to your employee, you do not have to pay the one-month salary. However, you must allow your employee one free day of the week so that he or she will have time to search for another job.

      Termination with Cause: when an employee is fired for factual reason, he or she must be compensated with:

      • Two-week paid vacation (if he or she has not taken it yet), 
      • A Christmas bonus equal to 12% of the employee annual salary.