5 Things Every Entrepreneur Should Know About Employment Law in Costa Rica

1. Labor contracts are mandatory: Costa Rican law requires that every employee have a formal written contract outlining terms of employment.
2. Severance pay (Aguinaldo): Upon termination, employers are required to pay severance based on the employee’s length of service and reasons for termination.
3. Paid leave requirements: Employees are entitled to annual paid vacation, maternity leave, and public holidays. Failing to provide these could lead to legal disputes.
4. Minimum wage is regulated: The government sets minimum wage standards, which vary by profession. Ensure compliance to avoid penalties.
5. Social security contributions are mandatory: Employers must contribute to the Caja Costarricense de Seguro Social (CCSS) for each employee. Non-compliance can lead to legal issues.