Costa Rica Labor Law

Costa Rica Labor Law Melendez & Bonilla Law Firm Costa Rica Labor Code extremely comprehensive CAFTA Treaty Labor Unions

Christmas Bonus

Costa Rica Labor Code on Christmas Bonus

Christmas Bonus

The Costa Rica Labor Code has a very special provision for payment of Christmas Bonus to employees. The Christmas bonus is viewed as an extra month's salary paid in December. The bonus has to be paid in December even if the employee has not completed one full year in service.

  • How is the Christmas Bonus Calculated?

    The Costa Rica Labor Code views a full year's employment as beginning on December 1 of a year and ended on November 30 of the following year.

    The calculation of the Christmas Bonus depends upon:

    The sum of the total wages paid to an employee for the past year (including overtime payments) divided by 12. The amount thus calculated is the amount to be paid as Christmas Bonus. It must be given to the employee on or before December 20 of the year it is applicable.

    Even if the employee has not completed a full year's work, the Christmas Bonus has to be calculated according to a similar formula. The total amount of salary that has been paid to the employee – whether it is for two months, ten months, or three months – is to be divided by 12 and the amount thus got is to be paid as Christmas Bonus. The formula is meant to calculate the average monthly salary that has been paid to an employee for any given year.

    The formula for dividing total salary paid by 12 remains even if, for example, an employee has worked for only three months before Christmas Bonus becomes due.

    Any delay by the employee in paying out the Christmas Bonus is considered a labor offense against the employee.

    A Labor Court would impose a fine on an employer if the latter fails to pay or delays payment of Christmas Bonus.

    An employee is considered to have been fired without legal procedures if a Christmas Bonus is denied. In such cases, the employer has to pay the legal compensations that would be applicable to any employee fired illegally. The employer would have to pay a fine plus preaviso, auxilio de cesantia etc. which are paid to employees fired illegally.

  • What Is Pro-Rated Christmas Bonus?

    Two weeks for every 50 weeks of work is the annual paid leave for all employees. An employee is entitled to one day's wages or earned leave which shall be compensated thus if the services of an employee are terminated before the completion of a year's work. There are detailed rules for medical leave, etc. also. In some cases, where private companies have drawn up their own specific employment contracts with their employees, some conditions for vacations might be different. However, in no case can employee contracts be completely beyond the scope and spirit of the Costa Rica Labor Code that upholds the rights of employees. Regular public holidays, weekly off, and other types of leave cannot be counted as part of the earned vacation time of an employee.

  • Paid Public Holidays

    An employee has to pay the pro-rated Christmas Bonus if an employee is fired from the job before December. The Christmas Bonus, in such cases, is calculated based on the regular formula. The total amount of wages for the period December 1 through November 30 are added and then divided by 12.

  • Is The Christmas Bonus Different For Domestic Helps?

    The Costa Rica Labor Code has been carefully drafted to protect the rights of employees. The law for Christmas Bonus applicable to domestic helps is an example of this aspect. An additional 50 percent of regular wages paid to domestic helps who live with the family is to be added to the amount of total wages for calculating the Christmas Bonus. The total wages are taken to include both cash and kind payments made to a domestic servant who lives with the employer.