Discovering Costa Rica

Summary of Labor Regulations in Costa Rica The Costa Rican Labor Code (Código de Trabajo) is the legal reference for all labor regulations. According to the Code, “an employer-employee relationship exists when there is an exchange of services for money and the employer exerts direction and control over the employee’s duties…”

The following are some of the main topics covered by law, some of which would be included in the Internal Work Regulations.

Wages/Payment Minimum wages are adjusted by the National Salary Council (made up of representatives from the labor force, of employers and the Government) twice a year based on the inflation index. Payment is by time period or unit/piece work. The company is free to determine method and timing of payment. Workers may be paid wages on a daily, weekly, bi-monthly, or monthly basis. Domestic workers generally receive a monthly salary, paid on a bi-monthly basis. Paid Vacations The worker is entitled to a minimum of two weeks of paid vacations for every 50 weeks of continuous activity under the same employer. If terminated before accumulating those 50 weeks of employment, the employee is entitled to pay for one vacation day per each month worked. If a worker has acquired a right to vacations and he ceases in his work for any cause before using them, he will be paid the corresponding amount. This is the only case in which vacations are allowed to be compensated with money. Thirteenth Month or “Christmas Bonus” It is mandatory to pay a Thirteenth Month or “Christmas Bonus” to all workers at the end of each year. This amount equals one twelfth of the ordinary and extraordinary salaries received from December 1st of the prior year to November 30th of the current year (or during the months worked). It has to be paid within the first 20 days of December. Termination of Work Relationship An employer may terminate an employment contract is at will, and may be with or without just cause (as established under the Labor Code). The employee will always be entitled to certain indemnity payments for voluntary or involuntary termination. If an employee’s termination is for just cause (as set forth in a specific list contained in the Labor Code) then the employer will only be liable for the payment of wages, proportional vacation time and Thirteenth Month/Christmas Bonus. There should be sufficient evidence of the just cause for termination (witnesses or written evidence) in case the employee should file a complaint. All disciplinary actions must be taken within 30 days of the action.

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