The bonus, as well as vacations, are an indisputable and inalienable right for workers in Costa Rica, and this is how the Act of Payment of the End of the Year Bonus to Workers of the Private Sector Companies, Law No. 2412, establishes and regulates everything regarding this “additional salary” that every employer must pay to his collaborators, whatever the activity, within the first twenty days of December of each year.

Said benefit must be calculated based on the average of ordinary and extraordinary salaries (overtime and any other wage payment that has been made in the period) accrued by the same person must be taken into account, during the previous twelve months, calculated from the first of December of each year, and until November thirtieth of the following year, to be subsequently divided by 12 (months of the year).

The foregoing should not include what concerns the periods of disability (only what was paid by the employer during that period), nor the leave without pay, but does include what was received during the four months of maternity leave, if any. The bonus must be paid in full, that is, no deductions should be applied (tax or social charges), except for the amount of child support, if any. In case the employee has not completed a full year of work, the accrued must be added during the time worked and divided by twelve.

In the event that the employer does not pay the bonus, is delayed or paid incompletely, there will be an undue withholding of the salary and a serious fault to the obligations of the contract, empowering the worker to terminate the employment relationship with employer liability; and additionally, the employer may be liable for a fine ranging from a base salary to twenty-three base salaries, as established in the Labor Procedural Reform, and determined by the Judge according to the damages caused to the employee.

In case that, as an employer or an employee, you require legal advice on labor matters, ERP Lawyers offers a professional team with extensive experience in this area. Contact us and it will be our pleasure to offer our services.

NOTE: This article, which is based on regulations in Costa Rica, is issued for informational purposes, not for advice. It is published by: ERP LAWYERS & ASSOCIATES.