Last updated on: February 8th, 2022
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
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).
Effective January 1, 2022, Costa Rica’s minimum wage ranges from CRC 10,875.11 per 8 hours workday for unskilled employees to CRC 14,205.12 per day for specialized employees.
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.
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).
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.
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).
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),
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.