Costa Rica

Labor Compliance Guide

Labor Requirements

The Labour Law in Costa Rica is regulated mainly by the Labour Code of 1943. The Labour Code governs the terms and conditions of employment such as working hours, holidays and rest periods, wages, overtime, employment relationships. The Labor relationship is also governed by the Constitution of Costa Rica. 

Hours & Pay Regulations

Normal Working Hours

The regular weekly working hours are 48 hours exclusive of overtime and daily working hours shall not exceed 8 hours per day. Daytime work is work done between 5:00 am and 7:00 pm. A normal workweek generally consists of 6 days.

 

This however does not apply to certain employees in managerial roles etc, in which the daily work time can be extended up to a maximum of 12 hours a day and 72 hours per week. An employee can extend his day shift up to only 10 hours in case of jobs that are not unhealthy or dangerous, provided that the weekly work does not exceed 48 hours.

 

Daily working hours shall in no case exceed 12 hours including overtime unless an emergency situation exists, or when there is a danger or imminent risk to people, machinery, etc.

 

For a mixed shift, the daily limit is 7 hours with a weekly limit of 42 hours. The mixed shift in no case will exceed 7 hours, but it will be considered as a night shift when 3.5 hours or more are worked between 7 pm and 5 am. Art. 135 – 138 and 143 of Labour Code (amended as of 2016). 

 

Recording Requirement

Employers shall maintain a record of the employee’s extraordinary work in salary books or payroll separately from the books which consist of information on the ordinary work of the employees. Art. 144 of Labour Code (amended as of 2016).

Overtime

Any work performed exceeding the working time limits as having been agreed between is known as overtime. Employees are not allowed to work for more than 12 hours a day including overtime. Overtime is not allowed in jobs that are unhealthy or dangerous.

 

Pay – If an employee works beyond the working hours, i.e. 8 hours a day and 48 hours a week, he/she is entitled to overtime pay of 50% over and above the rate of his ordinary pay (150% of the normal wage rate for overtime hours). Art. 139 – 141 of Labour Code (amended as of 2016). 

Night Work

Night work is defined as work between 7 p.m. and 5 a.m. It may not exceed 36 hours per week or 6 hours per day. The mixed shift in no case will exceed 7 hours, but it will be considered as a night shift when 3.5 hours or more are worked between 7 pm and 5 am. Art. 135 of Labour Code (amended as of 2016).

Breaks

An employee is entitled to break for a minimum duration of 30 minutes, provided that it shall be continuous in which case, the duration of break shall be considered as working time. Employees occupying managerial posts are entitled to a minimum rest of 1.5 hours in a day. Art. 137 and 143 of Labour Code (amended as of 2016). 

 

Weekly Rest

An employee is entitled to 24 consecutive hours of rest after 6 days of work. Generally, work is not allowed on the weekly rest day, except where the nature of the work does not involve heavy, unhealthy, or dangerous tasks, or an agreement exists between the employee and the employer for work to be performed on the rest days.

 

Exceptions to Weekly Offs

Employers cannot make employees work on weekly holidays except for the instances within the framework of the legal stipulations such as restaurants, establishments selling items of general utility like vegetables, milk, work necessary or urgent for the establishment to function, etc. Art. 152 of Labour Code (amended as of 2016). 

Work On Rest Days

An employee who works on a rest day is entitled to double the regular rate of pay.

 

In cases where the requirement justifies the need to work on a weekly rest day and the employee does not agree to work on his rest day, the employer may request the government authority permission to provide such employees with accumulated compensatory rest as a form of remuneration. Such an accumulated compensatory rest day shall not be less than 3 days for each case of work on a rest day. It is up to the discretion of the ministry to grant or deny such authorization. Art. 152 of Labour Code (amended as of 2016). 

Sunday Work

An employee may not be required to work on Sundays. But employees may be allowed to work until midnight on Sundays and holidays, except on Holy Thursday and Friday, during which the closure will be total via an agreement entered between the employer and employee. 

 

Pay for Work on Sunday – In case an employee works on a Sunday, he/she shall be entitled to double the rate of ordinary wages. Art. 150 of Labour Code (amended as of 2016).

Public Holidays

Employees are generally entitled to 9 paid public holidays:

  • Jan. 1: New Year’s Day
  • April 11: Juan Santamaria Day
  • Maundy Thursday
  • Good Friday
  • May 1: Labor Day
  • July 25: Anexion del Partido de Nicoya
  • Aug. 15: Mother’s Day and Assumption
  • Sept. 15: Independence Day
  • Dec. 25: Christmas Day

In addition, Aug. 2 (Day of Our Lady of the Angels) and Oct. 12 (Cultural Day) are holidays for which payment is not mandatory. When Juan Santamaria Day, Anexion del Partido de Nicoya, or Mother’s Day and Assumption falls on a Tuesday, Wednesday, Thursday, or Friday, the holiday is observed the following Monday. If the employer cannot afford a work stoppage on those Mondays, it may require employees to work but must give them another day off within 15 days of the holiday.

 

Employees who practice non-catholic religions may request their employer to grant holidays for religious celebrations important to their belief as days off and the employer will be obliged to grant it. When this occurs, the employer and the employee shall agree to a replacement day of work, which may be deducted from annual leave.

 

In light of Executive Decree No. 25570 passed in July 2020, given below are one time amendments for upcoming years – 

      • The enjoyment of the holiday corresponding to the dates of May 1 and July 25, 2021, will be moved to Monday immediately after and, corresponding to the dates September 15 and December 1, 2021, to Monday immediately preceding.
      • The enjoyment of the holiday corresponding to the dates September 15 and December 1, 2022, will be transferred to Monday immediately after.
      • The enjoyment of the holidays April 11, July 25, and August 15, 2023, will be moved to the immediate Monday preceding.
      • Finally, the enjoyment of the holiday corresponding to the dates April 11, July 25, and August 15, 2024, will carry over to the Monday immediately following.

Pay for Work on Public Holiday – An employee who works on a public holiday is entitled to double the normal salary. Art. 148 – 152 of Labour Code (amended as of 2016) and Law No. 9875 of July 13, 2020.

Annual Leave

Employees are entitled to at least 2 weeks of paid annual leave for every 50 continuous weeks of work for the same employer.

 

Vacation Pay – During the annual leave, employees receive vacation pay as an amount equivalent to the average salary earned by the employee in the last 50 weeks. To calculate the salary that the employee must receive during his vacations, the employer will take the average of the ordinary and extraordinary remunerations accrued by the employee during the previous 50 continuous weeks of employment.

 

Carry Over and Accrual – Generally, the employee must be permitted to take the entire vacation at one time. If the employee performs work of a special nature that does not permit a long absence, and the employee and employer agree, annual leave may be split into no more than two segments. Unused vacation cannot generally be carried over to the following year unless the employee’s work responsibilities prevent the taking of vacation in the year earned.

 

Holiday accrual is generally not allowed unless the employee is engaged in technical, managerial, or similar work, in which the employee cannot be replaced by another employee or when the residence of the employee’s family is in another province.

 

Timing of Vacation 

The employer shall inform the time in which the employee can take his annual vacation, and shall do so within 15 weeks after the day on which 50 weeks of continuous employment with the same employer is completed.

 

Termination of Employment

If the employment is terminated before the 50-week period is completed, the employee is entitled to at least one day of vacation for each month and such accrued vacation will be compensated at the time of termination. Art. 153 – 161 of Labour Code (amended as of 2016). 

Minimum Wage

Costa Rica’s minimum wage ranges from CRC 9,598.73 per 8 hours workday for unskilled employees to CRC 12,537.91 per day for specialized employees.

 

Christmas Bonus

All employees who have worked for the employer for more than a month are entitled to a Christmas bonus, known as Aguinaldo, equal to one month’s salary and paid within the first 20 days of December. The Christmas Bonus is not affected by the payment of Cesantia or the Preaviso. The Christmas Bonus has to be paid if the services of an employee are terminated before December. 

Special Leave

Sick Leave

Employees who have made a contribution to social security [CCSS – Caja Costarricense de Seguro Social] in the month before becoming ill are entitled to paid sick leave. Employers must pay at least 50 percent of the employee’s salary for the first 3 days of sick leave. The other half is paid by the Social Security Fund. From the fourth day of sick leave onward, the employee receives 60 percent of his or her average earnings from Social Security and no pay from the employer.

 

However, the CCSS compensates employees on sick leave only if the employee submits a medical certificate obtained from an accredited CCSS doctor. For a proven illness that incapacitates the employee from the normal performance of his work for over a period of time, the employer shall ensure to provide the following to a sick employee:

      • Half (50%) of salary for one month after continuous work of more than three months but less than six months;
      • Half (50%) of the salary for two months after continuous work of more than six months but less than nine months;
      • Half (50%) of salary for three months after continuous work of more than nine months.

Art.79 of Labour Code (amended as of 2016). 

Maternity Leave

A pregnant woman is entitled to a mandatory period of paid leave of 4 months including one month before birth and three months after birth. To obtain paid maternity leave, the employee must provide the employer with a doctor’s certificate five weeks prior to the due date.

 

In the case of unintentional abortion or non-viable preterm birth, an employee will be entitled to half of the maternity leave. In the event that the interested party remains absent from work for a longer time than that granted, because of an illness that makes her unable to work, she will also be entitled to the benefits mentioned above during the entire period that its restoration requires, provided that it does not exceed 3 months.

 

Pay During Maternity Leave

The employer has to pay 50 percent of the salary for all four months of leave. The Social Security Administration pays the other 50 percent of the salary for the four months of maternity leave. The employer and the employee must contribute to the Costa Rican Social Security Fund, the respective social contributions on the entire salary earned during the leave, so as not to interrupt the contribution during that period.

 

Breastfeeding Break

Women who are breastfeeding are entitled to a 15-minute paid break every three hours. An employer can also provide a 30-minute paid break twice a day except in the case that a medical certificate proves that an employee only needs a shorter interval. Art. 94 – 97 of Labour Code (amended as of 2016).

Voting Leave

An employee is entitled to leave for voting purposes with pay, in cases where the voting hours are within the working hours of the employee. Art. 381(2) of Labour Code (amended as of 2016),

Adoption Leave

An employee who adopts a child is entitled to 3 months’ paid leave beginning on the date the child arrives. To obtain adoption leave, the employee must submit a certificate to the employer from the National Foundation for Children or a family court confirming the adoption. Art 95 of Labour Code. 

Last updated on: June 29th, 2021