Author: Noelia Cisneros
The end of the year 2019 is approaching and the employers have a series of labor obligations to fulfill. Here are some relevant legal recommendations for your company:
- Christmas Bonus.
Paying Christmas bonus is an employer obligation that is regulated in Costa Rican legislation. Based on these regulations, the following should be taken into account:
- The maximum payment date is December 20 of each year.
- It is calculated by adding all the salaries received by the worker, from December 1st to November 30th of each year and dividing the total amount by twelve (12).
- By salary, we mean all salary income received by the employee, for example, overtime, commissions and salary bonuses must be added, as well as salary in kind.
- Employees who have not worked the full year period are also entitled to receive their proportional bonus, following the same formula indicated in section b) above.
- It is recommended that each employee sign a bonus receipt, and taking advantage of this opportunity in which the joy of Christmas air surrounds us, you can break down all the amounts that have been paid to the employee during the year, then making a record of the total amounts paid throughout the period.
- Mandatory payment of holidays.
In accordance with the provisions of article 148 of the Labor Code, December 25th and January 1st are mandatory holidays, which has the following implications:
- Those workers who receive payment of their salary on a biweekly or monthly basis, are entitled to receive double payment from the holiday if they work. However, since the ordinary salary of these employees already contains the payment for all the days of the calendar month, if they actually work on these holidays, the company would pay only the “single” day that must be added to cover the “double” payment to which they are entitled.
- On the contrary, those employees who receive their salary on a weekly basis, receive payment only on the days they work. If the regular working hours include working on Wednesdays, and they will enjoy the holiday without working, the employer should pay the regular amount of a “single” day. However, if they work during the holiday, the corresponding double payment must be done for the ordinary hours worked.
- In all cases, if the company asked the employee to work overtime on a compulsory payment holiday, those hours would be paid triple, since the overtime is calculated at a time and a half (1.5) from the ordinary value of the hour worked, and on a holiday such hours must be multiplied by two (2).
- Vacation.
Article 153 of the Labor Code states that all workers are entitled to a minimum of two (2) weeks of vacation for every fifty (50) weeks of continuous work.
A large number of companies operate with a total closure in the last week of December and / or the first week of January. We suggest the following:
- Grant vacation periods of at least one (1) continuous week. Although it is a common practice to break up vacations on business days, (even generally at the request of the worker himself who requires time for personal activities during the working week), it should be understood that the “nature” of vacations is to function as a prolonged rest. Therefore, the legislation establishes that vacations should not be divided into more than two (2) periods, of one week each.
- To calculate the vacation payment, the salaries (ordinary and extraordinary) received by the workers must be taken into consideration. If it is an agricultural or livestock company, the average of the last week worked is taken, and in other cases, the average salary of the last fifty (50) weeks of work.
- Companies that pay the salary biweekly or monthly, and those engaged in a commercial activity (even if they pay weekly), must pay seven days a week (7), so the two (2) weeks of annual vacation correspond to fourteen (14) days of salary.
- On the contrary, companies that pay weekly salary, (except commercial activity), pay six (6) days of each week, for a total of twelve (12) annual days for vacation.
We remain at your disposal in case you require collaboration with additional consultations. Happy Holidays!