Affordable Hired Help

Affordable Hired Help

As you know, full or part-time domestic help is hard to find and prohibitively
expensive for the average person, not to mention a retiree, in the United
States. This is not the case in Costa Rica. A live-in maid or other full-time help
usually costs about $200 per month. Often you can hire a couple for a bargain
price, with the woman working as a maid and the man working as a full-time
gardener and watchman. Before hiring any employee, be aware of all your
requirements as an employer. Contact the ARCR for up to date information.

In Costa Rica, a maid usually does everything from washing clothes to
taking care of small children. You can also use your maid to stand in line
for you or run errands and bargain for you in stores, since foreigners often
pay more for some items because of their naiveté and poor language skills.

After you have had an employee for a number of years, they can begin to
think of you as a parental figure. As a result, it is not unusual for an employee
to ask for loans, advances, help with money for family members who wish to
build a home, furnish their house, provide school clothes for their children,
or provide medical care and medications for family members.

General handymen and carpenters are also inexpensive. If you are infirm,
one of the above people can assist you with many daily tasks. To find quality
help, check with other retirees for references or look in local newspapers
(Tico Times, La República or La Nación).

Gardeners, maintenance, construction and other workers should be
asked if they are registered with the Caja as a trabajador independiente and
if they have individual coverage for workers compensation. If they are,
doing business with them is probably safe as long as they do business with
others as well. However, if they are not legal and do not have insurance,
one either needs to add them to a payroll or not work with them and look
for someone else.

Unless your business is going to be a one-person operation, you will
need to hire employees. Be very careful, because the labor laws are stringent
and there are minimum salaries depending on the type of work. Ignoring
these regulations can be very expensive for you if you get caught breaking
the labor law.

Costa Rica’s labor laws for domestic workers are even stricter, and
difficult to interpret. All full time domestic employees have the right to Social
Security benefits from the Caja Costarricense de Seguro Social (roughly the
equivalent of the U.S. Social Security System). This important institution
pays for sick leave, general health care, pension funds, disability pensions
and maternity care.

Costa Rican labor law states all workers must be signed up with the Caja
Costarricense de Seguro Social and be protected by workers compensation
insurance for work related accidents. Employees and owners both have to
be signed up. All workers, whether they are hourly, salaried or independent,
must be covered.

Workers should be put on a payroll and the corresponding amount
paid into the social security system. If the employees are temporary, they
too should be signed up because the law states so even though the system
seems to be unfair.

It is the employer’s responsibility to pay monthly Social Security payments
for each employee. The employer must make monthly payments of about
22 percent of the worker’s monthly wage, and an additional nine percent is
deducted from the employee’s earnings. In return, the worker is entitled to
the Social Security services mentioned above.

New employees must be registered with Social Security within a week
of being hired. All new employees must register in an office in downtown
San José (2223-9890). There is an automatic trial period of one month for
domestic help, during which time an employee may be released without
notice or termination pay.

One huge mistake is giving the employee too many ”in-kind” benefits.
These include anything not in the form of money. For example, meals,
clothes, education, lodging and transportation. In Costa Rica, these “inkind”
perks which an employee receives can become part of their payment
for work performed.

As alluded to above, it is also mandatory to insure employees against work related
accidents (seguro contra riesgos de trabajo). A workers’ compensation
policy should be purchased from the Instituto Nacional de Seguros de Costa
Rica, the national insurance company, to cover work accidents. This coverage
can be included in a homeowner’s policy if only a few workers are involved.
This type of worker’s compensation costs 8,000 colones monthly for domestic
employees and must be reapplied for annually. By not covering an employee
with workers compensation you are setting yourself up for possible problems
that will have to be settled in court.

Employers must also pay at least minimum wage to employees. This wage
is set by the Ministry of Labor and depends on the job and skills required.
Average wages for unskilled workers start at about $120 per month. Live-in
help can receive an additional 50 percent more that is not actually paid to
them but is used when computing certain benefits and bonuses.

Live-in domestic help cannot be required to work more than 12 hours
a day, although few expect this. Live-in workers usually work-eight hours
a day like other workers. Most regular employees work an eight-hour day,
five days per week. Live-in employees can work more than this but have to
be given some time off.

Domestic help is affordable in Costa Rica
Furthermore, employees are entitled to a paid vacation depending on
their length of employment and whether they are full-or part-time. The law
requires one day of vacation for every month of employment. A two-week
vacation is due after 50 weeks of work. The employer can choose the time
the vacation is taken and can require that half be taken at two different times,
but they must be granted within 15 weeks of the time when they were due.
Upon termination of the employment contract, unused vacation time should
be paid using as a base the average of salary earned during the last six months.

Employers must also pay aguinaldo (end-of-year bonus) if an employee has
worked from December 1 through November 30, or an amount proportionate
to the time worked, if less than a year. The amount is the equivalent of one
month’s salary. This bonus should be paid in early December. Do not forget
that live-in employees receive an additional 50 percent year-end bonus.
Employees must also be paid for eight official holidays: January 1, Easter
Thursday and Friday, April 11, May 1, July 25, August 15, September 15
and December 25.

A maternity leave of one month before a baby’s birth is required; the
employee receives 50 percent of her normal salary. Dismissal of a pregnant
employee is also a bad idea, as it is frowned upon and could be very costly
to the employer.

Maternity leave is a total of four months, one month before birth and
three after. I believe it is at 60 percent pay, but am not sure about that.
New mothers are entitled to up to a year of lactancia—an hour for breastfeeding.
In practice, I’ve seen most people leave an hour early— I don’t recall
anyone taking it at lunchtime. I believe this is granted by the doctor for three
months intervals (although I’ve never asked anyone how they decide if you
are entitled to three more months). I don’t believe there are any restrictions
as to, length of time at work, etc.

In some cases, when a worker is terminated, it is the employer’s
responsibility to pay severance pay, all unused vacation time, the proportionate
aguinaldo, and any wages due.

An employee must be given notice prior to being laid off. Severance
pay, or cesantía, is usually one month’s salary for each year worked. If an
employee resigns voluntarily, the employer does not owe severance pay.
After three months of employment, an employee has the right to receive
notice in the event of termination of employment without just cause by the
employer (if notice is not given, he must be paid one month’s salary, or a
fraction if he has been employed for less than one year).

If the worker is fired without justification after at least three months of
service, the employer has to pay a severance payment, the amount of which
increases in accordance with the time worked and could be up to 22 days
per year worked, with a maximum calculated on the basis of eight years, all
according to a specific calculation table indicated by the Labor Code.

While countries such as the United States and Canada have standard
minimum wages, Costa Rica has a separate minimum wage for nearly every
type of job. Monthly minimum salaries are reviewed by the government
every six months (January 1 and June 1).

Every six months, the government negotiates salary increases with various
employee unions. If the negotiations fail, as they do from time to time, the
president may issue a decree setting the new salaries in conjunction with the
Consejo Nacional de Salarios.

Unskilled workers earn about $230, semi-skilled workers $260, skilled
workers $285, technicians $290, technicians with higher education $450 and
employees with a university degree $530. To give you a more precise idea of
what salaries are like in Costa Rica, here are some samples of the approximate
starting minimum monthly wages as established by the Labor Ministry or
Ministerio de Trabajo y Seguridad Social:
accountant $400, bartender $240,
bus driver $250, carpenter $240, chauffeur $175, clerk $175, computer
operator $300, dentist or doctor $1000, other professionals $430, farm hand
$125, domestic worker (maid) $146 plus food, executive bilingual secretary
$375, guard $180.00, journalist $550.00, messenger $175, nurse $375, plant
supervisor $400, phone operator $170, secretary $295, tour guide $250 and
unskilled laborer $120.

Only inexperienced workers receive these starting salaries. Experienced
workers command higher wages. Keep in mind that these figures vary and
are subject to change at any time. Such factors as bonuses and other perks
also increase actual salaries. A list of minimum salaries is available at legal
bookstores and some newsstands.

Many professionals work for salaries established by their colegios or trade
organizations. For instance, a lawyer is supposed to get 10 percent of the
value of any contract he or she prepares.

Companies try to pay about the legal minimum, although more
enlightened ones reward good employees with higher salaries. Although the
salaries appear low by North American standards, they are good for Latin
America, and employees here have perks such as pensions, free medical care
and other benefits in additional to their salaries.

This site provides you a list of all of the basic salaries http://www.mtss.
go.cr/Macros/Salario/Salarios%20Minimos.htm

We have touched only briefly on the main points of Costa Rican labor
law because it is very complex. If you have any questions, we advise you
to contact the Ministry of Labor (2223-7166) or better yet your attorney.
Have your lawyer help with any labor related matters to avoid unnecessary
problems arising between you and your hired help. Information about Costa
Rica’s labor law in Spanish is at www.leylaboral.com.

Two new books can help you communicate better with your hired help:
Crown Publishers’ Home Maid Spanish and Barron’s Household Spanish.
Both books enable you to converse with your Spanish-speaking help without
being fluent in the language. They are filled with all of the essential words
and phrases you need to know.

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