Finally, if you are going to be hiring a housekeeper, a gardener, or any other kind of regular employ, you must know something about Costa Rican labor law. Labor law in Costa Rica is quite strict in protecting the rights of workers, something that might annoy employers but that is, on balance, a social good. As an employer, it’s your responsibility to make sure you are compensating your employees according to the law, as well as that you provide them with the appropriate notice and severance pay upon termination. Labor law is complicated, so if you do hire someone, be sure to consult with your attorney and draw up a clear compensation agreement with the employee before he or she starts working.

Compensation

As an employer, you will owe your employee several different kinds of compensation.

Salary: The cash payment you give on a weekly, bi-weekly, or monthly basis. Minimum salaries for jobs like housekeeper (servidora doméstica) are listed on the Web site of the Labor Ministry. (Go to www.ministrabajo.go.cr and click on Lista de salarios). Minimum salaries are adjusted twice a year. To give one example, after a 7% increase at the beginning of 2009, housekeepers made a minimum of roughly $220 a month (though most housekeepers make quite a bit more than that).

Aguinaldo: The 13th-month Christmas bonus, paid out every December. To figure aguinaldo, just add up what you pay your employee every month, and give that.

Caja: The Caja Costarricense de Seguro Social, known colloquially as simply the Caja, is Costa Rica’s social security system. You must register your employee with the Caja and pay 22 percent of the monthly wages into the employee’s Caja account.

Insurance: You are required by law to have an insurance policy that covers the work-related injuries of your employee and pays disability.

Vacation time: Under Costa Rican law, workers receive at least two work weeks of vacation for every 50 weeks of work, working out to roughly two weeks of vacation a year. If your employee does not take the time off, you must compensate him or her monetarily.

Maternity leave: Pregnant women have a right to a total of four months of paid maternity leave, one month before giving birth and three months afterwards.

Terminating an employee

Firing an employee can be a delicate matter and could, if done improperly, cost you a lot of money and pitch you into a lengthy legal battle. There are two ways to fire an employee: with cause and without. In the former case, you must present the employee with a letter detailing your reasons for the firing. Some examples of just cause would be stealing, damaging property, or disruption of the workplace. Even if the employee is fired with just cause, you must pay the employee any salary owed, as well as prorated aguinaldo.

Employees fired without just cause – say, to cut staff or close a retail branch – must be given severance pay, in addition to any remaining salary owed and the proratedaguinaldo for the year. Severance is figured according to a formula found in Labor Code. Roughly speaking, employees are compensated for between 18 and 21 days of wages for every year employed, for a maximum of eight years. The exact amount of per-year compensation is lower the more years an employee has worked. In addition, severance pay for live-in maids is 50% more, to compensate for the value of room and board provided during the period of employment.

As a final note, firing a woman you know is pregnant is illegal. If you do so and she brings it to labor court, you could be ordered to compensate her by paying her salary for the duration of pregnancy, plus four months salary to cover maternity leave, plus six months salary as a reparation, plus any other fine the Labor Ministry decides to levy. It will not be fun.

Especially when it comes to housekeepers and gardeners, many people try to get around the rules by hiring illegal aliens from Nicaragua. They work for cheaper, and are less likely to go to the authorities in the case of mistreatment at the hands of employers. For the good of the country, we strongly recommend against doing this as a way to circumvent the rules, and if you do have to hire an illegal immigrant, be sure the pay him or her at least what the Costa Rican equivalent would merit. It’s not a lot of money to you, and for them, it’s only fair.