Costa Rica (CR)
Costa Rica is Central America's most stable democracy — a small, lush republic that abolished its army in 1948 and instead invested in education, healthcare, and the environment.
Employment Rights
Sick leave, dismissal protection and red flags in Costa Rica.
Costa Rica's employment law is governed primarily by the Código de Trabajo (Labour Code) and is highly protective of employees. Workers have extensive statutory rights including a mandatory 13th-month bonus (aguinaldo), a severance fund (Fondo de Capitalización Laboral), paid vacation from day 1 (after 50 weeks), and strict rules on dismissal. The MTSS (Ministerio de Trabajo y Seguridad Social) enforces labour law through labour inspectors. Disputes are heard before Juzgados de Trabajo (labour courts). In practice, many small employers in Costa Rica operate informally — expats who employ domestic workers or contractors should understand their obligations carefully to avoid retroactive liability.
Sick leave
Rules: Employees are entitled to paid sick leave from their first day of employment provided they present a valid medical certificate (orden de incapacidad) from a CCSS doctor or a licensed private doctor recognised by the CCSS. Days 1–3: employer pays 50% of salary. From day 4 onwards: CCSS pays 60% of the average salary of the last 6 months (from the Seguro de Enfermedad fund). Most professional employers voluntarily pay 100% during short sick leave as a benefit. The medical certificate must be submitted to the employer within 24 hours of issuance.
Doctor note: Day 1 — a medical certificate is required for any paid sick absence. The CCSS electronic sick note system (incapacidad electrónica) means employers can verify certificates directly.
Employer pay: Days 1–3: employer pays 50% of regular salary. Day 4+: CCSS Seguro de Enfermedad y Maternidad pays 60% of the 6-month average salary for up to 52 weeks (366 days). For long-term illness beyond 52 weeks: CCSS Invalidez pension may apply if permanent disability is established.
Long-term: After 52 weeks of paid sick leave through CCSS, if the employee remains unable to work due to disability, the IVM (Invalidez, Vejez y Muerte) disability pension (pensión por invalidez) can be applied for. The amount depends on years of contribution and degree of disability. Process through CCSS regional offices.
Dismissal protection
Law: After the probation period, dismissal without just cause (despido sin justa causa) requires payment of preaviso (notice pay) and cesantía (severance pay). The Código de Trabajo lists specific justifications for dismissal with cause (despido con justa causa), including dishonesty, serious misconduct, repeated absence, and physical violence against the employer. Dismissal with cause requires documented evidence — a single incident is rarely sufficient except in egregious cases. The employer must follow a fair process including informing the employee of the cause in writing at the time of dismissal.
Deadline to sue: 1 year from the date of dismissal — employees must file a labour court claim (demanda laboral) within 1 year if disputing unfair dismissal or unpaid benefits. Labour courts: no filing fee for workers. The Juzgados de Trabajo in each province hear employment disputes. MTSS mediation is available before court proceedings as a free alternative.
Probation
Probation period (período de prueba) maximum 3 months — any agreed period longer than 3 months is unenforceable. Both employer and employee may terminate during probation without cause and without payment of severance or preaviso (notice pay). Probation must be stated in writing in the employment contract. After probation: full Código de Trabajo protections apply. Key tip: do not sign contracts with probation periods >3 months — they are illegal and unenforceable under CR law.
Notice periods
Preaviso (notice pay in lieu of working notice): less than 3 months service = 1 week; 3–6 months = 2 weeks; 6 months–1 year = 1 month; 1+ year = 2 months. Employer can pay the preaviso amount instead of requiring the employee to work the notice period. Employee resignation: same preaviso rules apply if the employee gives written notice — failure to give notice means the employer can deduct the equivalent amount from the final settlement. Cesantía: 50% of preaviso pay per year of service for dismissal without just cause (capped at 8 years = maximum 2 months cesantía for pure severance; FCL fund covers additional years).
Working time
Max hours: 8 hours per day; 48 hours per week for daytime work (between 5am and 7pm). Night shifts (7pm–5am): maximum 6 hours/day, 36 hours/week. Mixed shifts: 7 hours/day, 42 hours/week. For 2026 planning, standard Costa Rican employment contracts still usually use these daytime/night/mixed-shift limits; any compressed-week arrangement should be checked against the current MTSS rules and sector eligibility before signing. Maximum overtime: 4 additional hours beyond normal shift in a day.
Min rest: 12 hours minimum rest between shifts. At least 1 day off per week (typically Sunday, though this can be varied by mutual agreement in hospitality and retail). All employees are entitled to a 30-minute paid break for shifts over 6 consecutive hours. National public holidays are additional days off on top of contracted working days — employees who work on public holidays receive double pay plus a compensatory day off.
Overtime: Overtime (tiempo extraordinario) is paid at 150% of the regular hourly rate for the first 4 hours per day above the normal shift limit, and 200% for hours beyond that. Night shift work (7pm–5am) pays a mandatory premium of 33% above the daytime rate — this is built into night shift minimum wages, not added on top. Overtime must be voluntary and agreed in writing — employers cannot compel overtime without consent.
Vacation
Minimum 2 weeks (14 calendar days) paid vacation per year, earned after 50 weeks of continuous service with the same employer. Days accrue at 1 day per 26 days worked during the first year. Vacation must be taken — it cannot be commuted to cash payment except on termination of employment (when all accrued but untaken vacation is paid). Both employer and employee must agree on vacation dates — employers cannot refuse vacation indefinitely. Vacation pay is calculated on the average salary of the prior 50 weeks.
Anti-discrimination
The Código de Trabajo and Ley de Igualdad de Oportunidades (Law 7476, against discrimination in employment) prohibit discrimination based on race, sex, religion, nationality, political opinion, family situation, disability, age, or sexual orientation. The INAMU (Instituto Nacional de la Mujer) handles gender-based employment discrimination. The MTSS labour inspectors investigate discrimination complaints. Employees who face retaliation for discrimination complaints are protected under anti-victimisation provisions. LGBTQ+ workers have explicit protection after the 2020 equal marriage law extended non-discrimination provisions.
Contract red flags
- !Probation period longer than 3 months — illegal; sign nothing with >3-month probation.
- !No CCSS registration mentioned — any employer who does not enrol you with CCSS from day 1 is violating the law; you may be left without health coverage and the employer faces severe penalties.
- !Salary below the MTSS minimum wage for your skill category — from January 2026 the unskilled worker floor is CRC 373,092/month; professional and technical categories are higher; check the Decreto Ejecutivo at mtss.go.cr before signing.
- !No aguinaldo (13th month) mentioned — it is mandatory by law; if a contract says you waive it, that waiver is unenforceable.
- !Independent contractor agreement (contrato por servicios profesionales) when the role has the characteristics of employment (fixed hours, supervision, equipment provided) — this is a sham contract exposing you to risk of being legally reclassified as an employee with all benefits backdated, but the employer may resist paying retroactive CCSS and severance.
- !Non-compete clauses — generally unenforceable in Costa Rica under the Código de Trabajo unless extremely narrow in scope; don't be deterred from leaving a job by a broadly worded non-compete.
- !Contract without mention of Fondo de Capitalización Laboral (FCL) contributions — employers must contribute 3% of your monthly salary to your FCL account; this fund belongs to you and is available on termination regardless of cause.
Employment Rights
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