Costa Rica Labor Code: Complete Guide for Employers and Employees – Technologist

The Labor Code is organized into various Titles (Títulos), each addressing a specific area of labor law.

Title I – General Provisions

This section establishes the basic principles of labor law in Costa Rica, including:

• Scope of labor law
• Definitions of employer and employee
• Employment relationships
• Public policy nature of labor rights

A fundamental concept introduced in this section is that labor rights are generally considered mandatory and cannot be waived by employees

Title II – Individual Employment Contracts

This section regulates:

• Employment contracts
• Verbal contracts
• Written contracts
• Fixed-term contracts
• Indefinite contracts
• Probationary periods
• Employer obligations
• Employee obligations

Title III – Working Conditions

This section governs:

• Working hours
• Overtime
• Rest periods
• Weekly days off
• Holidays
• Night shifts
• Mixed shifts

Typical Maximum Working Hours

Day Shift

• 8 hours per day
• 48 hours per week

Night Shift

• 6 hours per day
• 36 hours per week

Mixed Shift

• 7 hours per day
• 42 hours per week

Overtime generally must be compensated at 150% of the regular hourly wage.

Title IV – Wages and Compensation

This section regulates:

• Salary payments
• Minimum wage requirements
• Methods of payment
• Deductions
• Wage protection

Costa Rica establishes minimum wages through periodic decrees issued by the government.

Employers should ensure that all employees receive at least the applicable minimum wage for their occupation.

Title V – Employee Benefits

Among the most important employee benefits are:

Vacation Pay

Employees generally earn:

• Two weeks of paid vacation
• After every fifty weeks of continuous service

Aguinaldo (Christmas Bonus)

The Aguinaldo is a mandatory annual bonus generally paid in December.

The bonus is calculated based upon the employee’s earnings during the applicable period established by law.

Paid Holidays

Costa Rican law recognizes several mandatory holidays that may require premium pay when worked.

Title VI – Occupational Health and Safety

Employers have a legal obligation to provide a safe workplace.

Requirements include:

• Workplace safety measures
• Risk prevention
• Occupational accident reporting
• Compliance with labor safety regulations

Employers must also maintain Workers’ Compensation coverage through the National Insurance Institute (INS).

Title VII – Labor Unions and Collective Rights

This section regulates:

• Labor unions
• Collective bargaining agreements
• Workers’ associations
• Collective labor rights

Employees generally have the right to organize and participate in labor organizations.

Title VIII – Special Employment Relationships

The Labor Code contains special provisions applicable to:

• Domestic workers
• Agricultural workers
• Apprentices
• Certain categories of specialized workers

Foreign employers frequently encounter these provisions when employing domestic staff such as housekeepers, caretakers, gardeners, drivers, and cooks.

Title IX – Labor Disputes

This section establishes procedures for resolving labor disputes through:

• Administrative proceedings
• Labor courts
• Judicial claims

Employees may file claims for:

• Unpaid wages
• Overtime
• Vacation pay
• Aguinaldo
• Severance benefits
• Wrongful termination

Title X – Labor Court Procedures

Costa Rica has specialized labor courts that handle employment-related disputes.

Labor judges have broad authority to:

• Order reinstatement
• Award unpaid compensation
• Impose penalties
• Enforce employee rights

Recent procedural reforms have significantly modernized labor litigation procedures.

Title XI – Final and Transitional Provisions

This section addresses:

• Implementation rules
• Regulatory authority
• Transitional provisions
• Related legal matters