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Costa Rica has a large educated population, the vast majority of whom can read and write. Many have post high school (colegio) education at the numerous universities here, and many have advanced degrees. This provides employers with a large pool from which to draw. The percentage of persons who speak, read, and write English increases directly with their education.
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's salary. This covers the employee for medical care, hospitalization, other medical costs and 3% of this amount is a contribution to a savings and pension fund.
Potential Benefits summary. Approximations on an annual basis.
*Required by law, not a benefit. You would be personally liable, and it could be very very expensive if there is an injury
This changes every six months, and the one here is for 2014, but remember to get the current version. I will not be updating this regularly. If you are an employer, do not think you can pay less than what is the current minimum wage for that position. You will get caught and the fines and penalties are nasty. Remember also that one additional month is paid each December and that extra month is paid at the minimum wage or current wage if higher. It is NOT used to average out to the minimum wage. See Aguinaldo below.
5. Holidays (also see Public Holidays)
Paid holidays are:
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.
There is a deduction of 10% on income from 296,000 to 445,000 per month. There is a deduction of 15% on income of over 445,000 colones per month.
Personal injury insurance (similar to workman's compensation) must be carried to cover all employees. This policy must be purchased from INS, the Costa Rica government owned insurance institute. (Private insurance is not permitted in Costa Rica.) For office employees it works out to 0.57% of wages.
Firing an employee carries risk. If an employee is dismissed (fired) without cause aguinaldo, vacation pay, notice and termination pay must be paid to them. If an employee is dismissed with cause or quits, aguinaldo and vacation pay must still be paid by the employer.
When an employee quits or is fired with cause, preaviso and cesantia do not need to be paid.
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. Also, the minimum wage for a live-in domestic employee is much less than for day workers.
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 weeks notice half a day of paid time must be given to look for another job.
You are also responsible for paying INS workman's compensation. If an employee is injured and you do not have this insurance, you must pay all medical costs and are personally liable.
Many people are under the impression that if they employ an 'illegal', a person without legal residency or citizenship in Costa Rica, that they many ignore these laws. They cannot. While an illegal may be less likely to file a complaint, it happens often enough that you should exercise good judgment here.
Aguinaldo is the Christmas bonus. Bonus though, is not a good word as this bonus is really a salary. It is not optional and all employers must pay it. This means that as an employer, you are really paying 13 months of salary. Aguinaldo is based one one one months salary (averaged) and that salary must comply with the minimum wage laws based on occupation. It is pro-rated if the if the employee is not employed a full year.
The minimum wage list can be found HERE.
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