Legal

Employer, Employee and Intermediary in Costa Rica. How Does the Labor Law in Costa Rica Really Define Who They Are and What They Do?

trabajadorCosta Rica is known as a relaxed and laid back country, no wonder our motto is Pura Vida, which literally means Pure Life, which could be summed up in a take it easy and chill. This motto is intrinsically woven in every Tico you meet along the way. Sadly, doing business in Costa Rica is not Pura Vida. As matter of fact, it is totally the opposite, but the Ticos still face it with a Pura Vida attitude, most of the time.

Doing business could be complicated, as well as keeping up with the labor law. Why? Well, number one, the labor code (Ley N°2) is written in Spanish and there is no English version of it. Number two, there are a lot of practices in the business world that are not according to the law, but is what everyone does (or most people do) so, it kind of becomes common practice and could eventually get your business in trouble.

Our goal at Today In Costa Rica, is to explain out to you the most important articles of the Costa Rican Labor Code. Also, we want to let you know how to apply them, and what the correct practices are, despite of what most people will tell you out there on the street (sometimes even your lawyers will get this one wrong!).

We want to start off by explaining who, in Costa Rica, is considered and employer, an employee and an intermediary. Our goal is that by fully understanding what those are, you will be off to a good start when setting up your Costa Rican business, or hiring someone to work at your vacation home.

The first term defined in the Costa Rican Labor Code is Employer (Patrono in Spanish). According to the Costa Rican legislation, an employer could be an individual, or a corporation – legal entity, it could also be a private or a public entity, who employs the services of a single person or a group of people, under a labor contract, which, in turn could be, expressed or implicit, verbal or written, individual or collective. By the way, yes, there could be a labor relationship even if a written contract has never been signed between the parties, but we will give you another article on this later.

It is also important to make sure that any company director, managers, administrators, boat captains, or anyone who has director or managing authority on behalf of an employer, is considered an employer’s representative. So, any wrongdoing by any of this individuals against any employee could get the employer liable to the Costa Rican law.

Then, the Labor Code defines what an Intermediary is, and you better pay attention to this one. And Intermediary is a person who contracts the services of an individual or a group of people to perform a job benefiting an employer. It is important to understand that, in this type of relationship, both the employer and the intermediary are equally responsibly, under the solidarity principle, to the employee and to the Costa Rican legislation. But, how does this work?

For example, you are going to build a house. You hire an individual builder, who will then hire a team to work at your house. The builder you hire is responsible to guarantee that all labor rights are given to the employee (we will talk later about this). However, if the builder, which in this case is the Intermediary, fails to comply with the labor code, you, as the owner of the house could be legally responsible to those employees. The same applies in a business, in case you have another entity staffing your business. That is why it is so important to make sure your intermediaries are complying with the labor law and that are giving their employees all the rights commanded by law.

The last term we will look at in this article is the employee. Article 4 of the Labor Code says that an employee is any individual (not a corporation, so no, you cannot hire a corporation as an employee) who renders its material or intellectual services, or both, on behalf of another person, under a labor contract, which could be express or implicit, written or verbal, individual or collective. It is important to note that collectors, commercial agents, salesmen, and anyone who only receives a commission as payment, used to be under this definition of employee. However, in 1990, under vote 1336-1990, the Constitutional Court of Costa Rica declared that last part to be unconstitutional.

In summary, in Costa Rica, an employer is anyone (individual or legal entity) who hires and individual (employee) to work for a salary. An intermediary is anyone who staff a business or hires individuals to work for another employer.

In the next article on this series, we will take a closer look at issues regarding language, negotiations between employee and employer, and the employee right to seek for advice with the Costa Rican labor authorities.

For a copy of the Costa Rican Labor Code in Spanish, Click Here

Reforma Procesal Laboral Has Been Finally Approved

solisThe government of President Luis Guillermo Solís had as one of their main goals for this term to have the Reforma Procesal Laboral Project back in Congress and get it approved. This plan to produce a major reformation on the process of how labor lawsuits are currently handled at the Costa Rican court houses. However, it had an article that legalized strikes and vital services such as health, police and other similar services. It had been vetoed by President Laura Chinchilla during her government.

Sure enough, as soon as President Solis came to power, he cancelled the veto imposed by President Chinchilla and the project was back on the legislative house. After a long road of approving it, and later having it banned by a Court house, the project finally came back to Congress in December of 2015 and in only six days, a record time for Costa Rican Congress, the project was approved.

On December 14th, 2015 the Reforma Procesal Laboral was approved with 41 favorable votes. One major change on the approved project is that the articles relating to strikes on vital services were left out and not approved. Some of the innovations which will come as a result of the new reformation is that labor lawsuits will be resolved quicker and employees will be able to get their unpaid benefits established by law faster than what they can today, which will save up resources for both the employers and the government by avoiding long processes which are rather simple. Also, employees who cannot afford a lawyer will now have the possibility to get a public defendant in case they needed.

This law will go into effect around mid-2016 so there is a lot to be learned by employers and government institutions. We will do our best to keep you informed about the upcoming and new learnings we discover along the way.

What Residency Category Can I Apply for In Costa Rica?

dimexAccording to Immigration Experts, there are three main residency categories to apply for in Costa Rica. You can apply as an investor, a renter, or as retired. In this article we present a quick summary of each one of the categories, this will give you a better idea of which one you can apply for.

In Costa Rica, an investor is a person, and his immediate family including spouse, parents and children), who has investments in the country of at least $200,000. Such investments can be in tourism, reforestation businesses, shares in Costa Rican corporation, real estate or any other activity supported by the Costa Rican government.

As mentioned before, another residency category is as a renter. This category also applies to an individual and his immediate family as mentioned in the previous paragraph. There are two ways to become a renter resident, 1) the individual will receive a monthly income of at least $2.500 USD and that income will continue to come in for the following 2 years after applying for residency, or 2) the individual has bank investments in Costa Rica (most likely a deposit with a Costa Rican bank) of $60,000 USD.

As proof of availability of funds, the individual will have to present a letter from a Costa Rican bank, a financial institution, a foreign bank. It is important to know that in case the letter comes from an institution outside of Costa Rica, it will have to be authenticated by the Costa Rican Consulate or through the “Apostille” Process. Click here to find the closest Costa Rican consulate to your city.

The third most common residency category foreigners apply for in Costa Rica is as a retiree. This type of residency also covers, besides the individual, the spouse, parents, single siblings and children. To become a retired resident, the individual must prove through a certified letter by the Costa Rican Consulate or the “Apostille” Process, that he is entitled to a lifetime pension of at least $1,000 in his country of origin. Suddenly Costa Rica sounds as a great retirement option, don’t you think?

It is important to know that in all this three categories, you will be given a temporary residency, which will allow you to work in the country only if you have your own Costa Rican business or corporation. Once your temporary residency is approved, you don´t have to necessarily live in Costa Rica, you can maintain your residency status just by visiting Costa Rica one day a year, that is amazing! After a period of three years as a temporary resident, you will be able to apply for permanent residency without any restrictions.

Finding a good and trusted lawyer in Costa Rica is very important, especially when it comes to your residency process. Luckily, you can count on Immigration Experts to guide you through getting your residency in Costa Rica.

You can read more about Immigration Experts here.

What Are the Main Requirements to Become a Costa Rican Resident?

mapa banderaThere is some paperwork to get ready before applying for your residency in Costa Rica. To avoid last minute issues it is better to be prepared ahead of time. At Today in Costa Rica, along with our friends from Immigration Experts, we want to simplify things for you, so we present this guide to help you prepare you residency documents.

As a first step you need an Application Letter. This letter must have the following information: full name of the applicant, nationality, marital status, occupation, passport number and the city and date where and when the passport was issued. In case that the spouse and/or children of the applicant are also applying for residency, their names must be included in this application letter. The letter should also include the date when you entered Costa Rica, a formal request expressing your desire to become a Costa Rican resident. You must also specify the type of residency you are applying for (for more information you can read What Residency Category Can I Apply for In Costa Rica?). Finally, the letter must indicate the temporary address where you are living in Costa Rica, if so; or your permanent address in your country of origin. You have to also include either a fax number or a physical address where to receive notifications (this could also be your lawyers´ contact information since they are the ones most likely dealing with your immigration process).

The second document will be your Birth Certificate. It must be authenticated by the Costa Rican Consulate corresponding to the country or region where the Birth Certificate was issued, or through the “Apostille” Process. It is important to note that for the residency process, the Birth Certificate will expire after 6 months of being issued.

In case the applicant is married, you must submit a Marriage Certificate. It must be authenticated by the Costa Rican Consulate corresponding to the country or region where the document was issued, or through the “Apostille” Process, as well. Just as Birth Certificate, the Marriage Certificate will also expire after 6 months of being issued.

Another necessary document is a Police Record from the country of origin of the applicant. The same process applies to this document as mentioned in the previous paragraphs for authentication and expiring date.

It is true that you do not need to be present in Costa Rica to complete your application process, but luckily for you, you must have to take at least one trip to Costa Rica for your finger prints. Sounds like a good excuse for a good Costa Rican get away! As an applicant you must go to the Ministerio de Seguridad Pública (Public Security Ministry) in San José to get your finger prints taken. Make sure you bring your passport – the original document, not a photocopy of it – and three passport size recent photographs.

You need to submit a certified copy of all the pages on your passport including any blank pages. Your lawyer will need you to sign a Special Power of Attorney, granting whoever is representing you through your application process, all the rights to fully represent you with any necessary dealings. Do you like photographs? Lucky you, besides the three already mentioned, you need five more to go along with your application, same size as the ones mentioned before.

Along with all the paper work you need to pay up some cash in advance. You must pay a $250 application fee deposited to the Immigration Department´s bank account number 242280-0 at Banco de Costa Rica.

Finally, you must do a consular registration with the embassy of your country of origin located in Costa Rica.

Applying for Costa Rican Residency? Let the Experts Do the Job!

immigration expertsImmigration Experts is the only law firm in Costa Rica, which is fully dedicated to immigration matters. The firm was founded by Marcela Gurdián, who is a lawyer, registered notary and a real expert in immigration matters with more than 20 years of experience in that area. She is currently President and Lawyer at Immigration Experts law firm.

Their team of professionals is fully prepared to help you obtain your residency in Costa Rica, and they guarantee it 100%. To better server your immigration needs and provide you with the best service possible Immigration Experts has offices located in San Jose – the capital city; Playas del Coco and Playa Tamarindo, both in the northern province of Guanacaste. If you happen to be in any of those areas, make sure you stop by their offices and they will gladly help you start your residency process.

It is very important to know a few details about obtaining your residency, one of them is the fact that you do not need to be physically present in Costa Rica to complete your residency process. That is where a good and trusted law firm, like Immigration Experts, comes in handy.

Once your Temporary Residency is approved, you don´t have to necessarily live in Costa Rica, you can keep your residency status by visiting Costa Rica just one day a year. How amazing is that? After residency approval, you will need to renovate your ID card two years later. You will be able to apply for a Permanent Residency Status after 3 years of holding a Temporary Resident Status.

If you are interested in knowing more about Immigration Experts or the immigration and residency process in Costa Rica, and would like to arrange and informational meeting during your next visit to the country, you can contact their law firm by e-mail at: infococo@immigrationexpertscr.com or infotama@immigrationexpertscr.com. They can also do a skype or phone conference call if you prefer it that way. If you prefer to contact them by phone, you can do so by calling the Playas del Coco office at +011 (506) 2670-2021, the Tamarindo office at +011 (506) 2653-0050 or the San José office at +011 (506) 2290-8050.

For more information on immigration check out www.immigrationexpertscr.com. If you want to come and live in paradise, let Immigration Expert be your guide!

Other articles by Immigration Experts: What Residency Category Can I Apply for In Costa Rica? and What Are the Main Requirements to Become a Costa Rican Resident?

 

 

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