Background Checks

Background checks are legal in Costa Rica but must comply with data privacy laws, particularly the Law No. 8968 (Ley de Protección de la Persona Frente al Tratamiento de sus Datos Personales). Employers must obtain informed written consent from the candidate before conducting any checks.

Permissible Checks:

• Criminal records (limited to serious crimes and only for the past 10 years)
• Employment and education verification
• Professional references

Employers cannot collect or process personal data beyond what is necessary for the job role and must respect the candidate’s right to privacy.

Verification and New Hire Reporting

• Employers must verify that the employee is legally authorized to work in Costa Rica. Foreign workers must have a valid residence and work permit.
• New hires must be registered with the CCSS for health and pension coverage.
• Employers must also register employees for occupational risk insurance.
• Employers must notify the Ministry of Labor and CCSS of new hires, typically through electronic systems.

Onboarding Process & Documentation

Collecting Required Documentation

Employers must gather the following from new hires:

• Valid identification (national ID or passport)
• Work permit (if the employee is not a Costa Rican citizen or permanent resident)
• Social Security registration (Caja Costarricense de Seguro Social – CCSS)
• Bank account details (for salary payments)
• Signed employment contract (including all mandatory clauses)

Providing Employee Rights and Obligations

Employers are legally required to inform employees of their rights and duties, including:

• Working hours and rest periods
• Wages and payment frequency
• Leave entitlements (vacation, sick leave, maternity/paternity leave)
• Social security and health coverage
• Termination conditions and severance rights

This information is typically included in the employment contract and/or an employee handbook.

Healthcare

Costa Rica’s public healthcare system is managed by the Caja Costarricense de Seguro Social (CCSS). It is mandatory for all employers and employees to contribute to this system.

Employers contribute a significant percentage of each employee’s salary to fund:

• Health insurance (SEM) covers medical care, maternity, and illness.
• Pension (IVM – Invalidez, Vejez y Muerte) supports retirement, disability, and survivor benefits.

These contributions entitle employees and their registered dependents to public healthcare services, including:

• Medical consultations
• Hospitalization and surgeries
• Prescription medications

Private Health Insurance

While public healthcare is comprehensive, many employers offer private health insurance as a benefit to:

• Reduce wait times
• Provide access to private clinics and specialists
• Offer broader treatment options

This is especially common for mid- and senior-level roles and is often used to attract and retain talent.

Retirement

Pension (IVM – Invalidez, Vejez y Muerte) supports retirement, disability, and survivor benefits.

Social Security

Employers contribute a significant percentage of each employee’s salary to fund:

• Health insurance (SEM) – covers medical care, maternity, and illness.
• Pension (IVM – Invalidez, Vejez y Muerte) – supports retirement, disability, and survivor benefits.

Employment Contract Details

Costa Rican labor law recognizes two main types of employment contracts based on their duration:

• Indefinite-Term Contracts: These are the standard form of employment agreements with no specified end date. They remain in effect until terminated by either party, following legal procedures or mutual agreement. This type is typically used for permanent positions and ongoing roles within a company.
• Fixed-Term Contracts: These contracts have a clearly defined start and end date and are only allowed under specific legal circumstances. They are commonly used for seasonal work, project-based roles, or to temporarily replace an employee on leave. If a fixed-term contract is used improperly or extended beyond legal limits without proper justification, it may be reclassified as an indefinite-term contract by labor authorities.

Although verbal agreements are legally valid in Costa Rica, written contracts are strongly recommended for clarity and legal protection. Every written employment contract must include the following:

• Identification of the Parties: Full legal names and identification details of both the employer and the employee.
• Start Date: The date when the employment relationship begins.
• Job Description: A clear outline of the employee’s role, responsibilities, and tasks.
• Workplace: The location where the work will be performed.
• Working Hours: The daily and weekly schedule, including start and end times and rest periods, in accordance with legal limits.
• Compensation: The agreed salary or wage, how it is calculated (e.g., hourly, monthly), and how often it will be paid.
• Contract Duration: Whether the contract is indefinite or fixed-term. If fixed-term, the end date or event that concludes the contract must be specified.
• Additional Benefits: Any extra benefits offered by the employer beyond the legal minimums, such as bonuses, health insurance, or transportation allowances.
• Signatures: Both the employer (or their representative) and the employee must sign the contract.

Probation Period

The probation period is the maximum legal duration of three months.

Visas

Visa Types

• Tourist Visa: Short stays, light business activities.
• Business Visa: For extended engagements.
• Work Visa: Requires government authorization.
• Provisional & Specific Purpose Visas: For entrepreneurs, trainers, or paid engagements.

Application Process:

• Determine eligibility.
• Gather documents (passport, financials, invitation, etc.).
• Submit to consulate.
• Attend interview (if needed).
• Await approval.

Extensions: Apply before expiration.

Independent Contractors

Independent contractors (also known as freelancers or service providers) are not considered employees under Costa Rican labor law. Key distinctions include:

• Contractors operate under civil or commercial contracts, not labor contracts.
• They are not entitled to labor benefits such as:
  • Severance pay
  • Paid vacation
  • Social security contributions (unless self-enrolled)
  • Christmas bonus (aguinaldo)

If a contractor performs work under conditions similar to an employee (e.g., fixed schedule, subordination, exclusive service), authorities may reclassify the relationship as an employment contract. This can result in penalties and retroactive benefit payments for the employer.

Paid Time Off

Employees are entitled to 14 days (2 weeks) of paid vacation after completing 50 weeks of continuous service with the same employer.

• If an employee has worked less than 50 weeks, they earn 1 day of paid leave per month of service.
• Unused vacation cannot be carried over unless agreed upon in writing between the employer and employee.

Public Holidays

• New Year’s Day
• Juan Santamaria’s Day
• Holy Thursday
• Holy Friday
• Labor Day
• Anexion del Partido de Nicoya
• Our Lady of Angels Day
• Mary’s Assumption and Mother’s Day
• Afro-Costa Rican Culture Day
• Independence Day
• Abolition of the Army Day
• Christmas

Bereavement

Employees are entitled to 3 days of paid leave in the event of the death of an immediate family member.

Maternity Leave

Pregnant employees are entitled to 4 months of paid maternity leave:

• 1 month before the due date.
• 3 months after childbirth.

The cost is shared equally between the employer and the CCSS.

Paternity Leave

• Private sector employees currently do not have a legal right to paternity leave.
• Public sector employees are entitled to 8 days of paid paternity leave, which can be taken in two-day increments during the first month after the child’s birth.

Parental Leave

Costa Rica has no additional statutory law for Parental Leave.

Sick Leave

For the first 3 days of illness:

• The employer pays 50% of the employee’s salary.
• The CCSS (Social Security) pays the remaining 50%.

From the 4th day onward, the CCSS pays 60% of the employee’s regular wage. A medical certificate must be submitted to the CCSS within 48 hours of the start of the sick leave.

Termination Requirements

At this time, Vensure does not have termination requirement details available. For related information, see Notice Period section below.

Notice Period

The required notice period for terminating an employment contract depends on the employee’s length of service:

• 0–3 months: No notice required
• 3–6 months: 1 week
• 6 months–1 year: 2 weeks
• 1 year or more: 1 month

If the employer does not provide the required notice, they must pay the employee the equivalent of the salary for that period.

Severance Pay

Severance pay, known as “cesantía,” is a mandatory benefit for employees who are terminated without just cause. It serves as compensation for the employee’s years of service.

How It’s Calculated:

• Based on the average monthly salary from the last six months, or the last month’s salary if it’s higher
• Multiplied by the number of years of service, up to a maximum of 8 years

Formula:

• Severance Pay = (Higher of last month or 6-month average salary) × (Years of service, capped at 8)

Unemployment Insurance

Costa Rica has no statutory law for unemployment insurance.

Anti-Discrimination Practices

Costa Rican labor law strictly prohibits discrimination in all aspects of employment. Employers are legally required to ensure equal treatment and opportunities in hiring, promotions, training, compensation, and termination.

Discrimination is forbidden on the basis of:

• Race or ethnic origin
• Religion
• Gender
• Sexual orientation
• Marital status
• Age
• Political opinion
• Disability
• National origin

This list is not exhaustive. Any form of unjustified unequal treatment that undermines human dignity may be considered discriminatory.

Workplace Safety Standards

Employers must make reasonable adjustments to support employees with disabilities. This includes:

• Accessible workspaces (e.g., ramps, elevators, ergonomic furniture)
• Adaptive technologies (e.g., screen readers, specialized software)
• Modified work schedules or duties when necessary
• Support services to facilitate communication or mobility
• These accommodations aim to foster an inclusive and non-discriminatory work environment

Employers are encouraged to ensure that their facilities are accessible to all employees and job applicants, including:

• Barrier-free entrances and restrooms
• Clear signage and emergency procedures
• Inclusive design in common areas

Workers’ Compensation

All employers are legally required to insure their employees against workplace accidents and occupational illnesses through the INS. This insurance must be in place from the first day of employment.

Insurance covers:

• Medical care for work-related injuries or illnesses.
• Temporary disability payments (a percentage of the worker’s salary).
• Permanent disability compensation.
• Rehabilitation services.
• Survivor benefits in case of a fatal accident.

Employer Obligations

• Register all employees with the INS.
• Pay the required insurance premiums.
• Report any workplace accidents or illnesses immediately.
• Cooperate with INS investigations and provide necessary documentation.

Labor Law Sanctions

Labor Code (Código de Trabajo): This is the primary legislation governing labor relations in Costa Rica. It includes provisions on working hours, wages, overtime, holidays, and termination of employment.

Minimum Wage Law: Costa Rica has established minimum wage rates for different types of work. Employers must comply with these rates to avoid penalties.

Social Security Contributions: Employers are required to contribute to the Costa Rican Social Security Fund (Caja Costarricense de Seguro Social – CCSS) for their employees. This includes contributions for health insurance, pensions, and other social benefits.

Occupational Health and Safety: Businesses must adhere to regulations set by the Ministry of Labor and Social Security (Ministerio de Trabajo y Seguridad Social – MTSS) to ensure a safe working environment.

Non-Discrimination and Equal Opportunity: Costa Rican law prohibits discrimination based on gender, race, religion, and other factors. Employers must ensure equal opportunities for all employees.

Collective Bargaining (Article 49 of Law No. 2): Employees have the right to form unions and engage in collective bargaining. Employers must respect these rights and negotiate in good faith.