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1.
Social Security
All
salaried employees must be registered with Social
Security. The
employer must pay 25% of the total salary amount,
and an additional 9%, which is deducted from the
employee. This
covers the employee for medical care,
hospitalisation, other medical costs and 3% of
this amount is a contribution to a savings and
pension fund.
2.
Vacations
The
law requires one day of vacation for every month
of employment.
A two-week vacation is due after fifty
weeks of work.
The employer can choose the time the
vacations are taken and can require that half be
taken at two different times, but they must be
granted within 15 weeks of the time when they were
due. Vacations
cannot include weekends or paid holidays, they
must be regular working days.
3.
Holidays
Paid holidays are:
January 1
Thursday & Friday at Easter
April 11
May 1
July 25
August 15
September 15
December 25
Other
holidays for which pay is not required for hourly
employees are August 2 and October 12.
Salaried employees are paid for these days
whether they work on them or not.
Employees who work on statutory holidays or
Sundays are paid double time.
The standard working week is 48 hours.
Some holidays may be moved to the following Monday
when they fall on Tuesday, Wednesday or Thursday.
4.
Income tax - Personal
Income
tax must be withheld from the employee and
submitted to the government by the employer.
There are no personal income tax forms to
be submitted by employees.
For details on the percentage of tax on
various income amounts see “Personal Income Tax on Salary” in the Income Tax section.
There is also an income tax table for self-employed
individuals.
5.
Insurance (Riesgos de Trabajo)
Personal
injury insurance (similar to workers’
compensation) must cover all employees including
domestic or temporary construction employees.
This policy must be purchased from INS, the
Costa Rica government owned insurance institute.
It works out to 2-3% of wages depending on
the type of work. The insurance division of
Casa Canada & ARCR can provide this insurance.
6.
Termination
If
an employee is dismissed without cause or laid off
temporarily aguinaldo, vacation pay, notice and
termination pay must be paid to them.
If an employee is dismissed with cause, has
worked for less than 3 months or quits, aguinaldo
and vacation pay must be paid by the employer, but
not advance notice or separation pay.
Preaviso
(Advance Notice) The law requires 30 days advance
notice to be given of impending termination.
If no advance notice is given 30 days pay
is due to the employee plus other benefits.
If the required number of days of advance
notice is given regular pay continues for 30 days,
but the employee has the right of one paid day per
week to look for another job.
Exact calculation is according to the scale
below.
Cesantia
is severance pay.
Maximum cesantia is 8 months.
Months Worked
0-3 3-6
6-12
More than 1 year
-----------------------------------------------------------------
Preaviso
(Days)
0
7
15
1
Month
------------------------------------------------------------------
Cesantia
(Days)
0
7
14
{table}
Years Worked
|
Days Paid
|
|
1
|
19.50
|
|
2
|
20.00
|
|
3
|
20.50
|
|
4
|
21.00
|
|
5
|
21.24
|
|
6
|
21.50
|
|
7
|
22.00
|
Add
the appropriate number of days for each year. - ie
4 years severance
pay would be 19.5 + 20 + 20.5 + 21 for a
total of 81 days pay.
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When
an employee quits or is fired with cause, preaviso
and cesantia do not need to be paid.
When
a company is sold, and the new owner keeps the
staff, all benefits are paid to the new owner as
if the staff had been laid off.
The benefits are not paid to the employees
at this time, as the new employer will have the
responsibility of paying them in the future, so
the amount is paid to the company or person
selling the business.
7.
Minimum Wage
Effective July 1, 2011, monthly minimums
(colons):
Unskilled
workers
228,058
Semi-skilled workers
245,660
Skilled workers
258,465
Technicians
275,220
University Graduates
366,325
Employees with university degree
498,616
The
government publishes new minimum wage schedules
every 6 months, on January 1 and July 1,.
The full list is more comprehensive,
including most occupational groupings.
8.
Trial Period
There
is an automatic trial period of three months,
during which an employee can be released without
the payment of notice and termination pay.
After 3 months the full separation
settlement applies.
The trial period for domestic help is one
month.
9.
Domestic Employees
There
are some special provisions governing live in
domestic employees.
If an employer has a signed contract with a
domestic employee offering less than the minimums
proscribed by law, the contract is not valid.
A
domestic employee’s workday is 12 hours.
Up to 16 hours is permitted, but
double-time must be paid for the extra hours over
12 per day. One
paid hour of rest, to coincide with a mealtime, is
required. It
is required that the employee be enrolled in the
CCSS medical and pension system.
The
employee has the right to half a day off per week
and half a day off on official holidays.
If they work pay must be at double time.
15 days of paid vacation each year is
compulsory, and payment in lieu of vacation is not
permitted. When
the December aguinaldo payment is calculated the
wage cost upon which aguinaldo is based must
include the value of the food and lodging supplied
as well as cash wages.
To
dismiss a domestic employee, no notice is
necessary if they worked for less than 30 days.
Over 30 days requires 15 days notice.
The cash equivalent of the notice period
can be paid. For
each week’s notice half a day of paid time must
be given to look for another job.
A
female domestic employee who becomes pregnant is
entitled to 1 month of paid leave before birth and
3 months afterwards.
If an employee is dismissed because they
are pregnant it is required that their wages be
paid from the day of dismissal until the 8th
month of pregnancy, then maternity benefits and
damages for wrongful dismissal.
10.
Benefits summary:
Approximations on an annual basis.
Caja Costarricense de Seguro Social
22.00%
Fondos de Capitalización & Pensiones
3.00%
Aguinaldo (Xmas bonus Dec 1 to Nov 30)
8.33%
Vacation pay (See paragraph 2)
4.61%
Dias Feriados (Long weekends with pay)
1.92%
Preaviso y Cesantia (Termination pay)
13.80%
Workman’s Compensation insurance
2.00%
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Cost of Benefits
55.66%
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In
addition to the above, the employee must pay 9% of
their salary for Seguro Social.
The other items are paid entirely by the
employer.
11.
Pay reductions
If an agreement is made
with an employee to work for less than their
current salary, or to change the number of hours
worked for a salaried employee for a responding
reduction in salary, it is necessary to pay the
employee the full termination settlement and then
rehire them.
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