On March 23, 2020, the Ley de Autorización de reducción de Jornadas de Trabajo ante la Declaratoria de Emergencia Nacional” (Temporary Reduction of Working Days in light of the Declaration of National Emergency Authorization Law) was published, and therefore came into force. It establishes the possibility for the employer to apply a temporary reduction of working days in order to combat the massive loss of employment. It requires that the gross income of the employer is reduced as a result of the National Emergency Declaration according to Article 1 of such bill.

The employer may unilaterally modify the employment contracts to temporarily reduce by up to 50% the number of hours of the ordinary working day agreed between the parties.  Then,within 3 business days after the reduction of the working day, it must begin the respective authorization procedure before the Labor Inspectorate of the Ministry of Labor and Social Security,

In said procedure, the employer must verify before the Labor Inspectorate of the Ministry of Labor and Social Security, the decrease of at least 20% in the company’s gross income. Also that such impact is attributable to the provocative event that originated the Declaration of Emergency. It is to be demonstrated by an affidavit signed by the legal representative of the company, and authenticated by a lawyer, or a certification provided by an authorized public accountant, which may be sent digitally. This information may be subject to verification by the Labor Inspection. The decrease in income will be determined in relation to the same month of the previous year. In those cases in which the employer has less than one year of laboring, the affectation in the gross income must be demonstrated from the average of the last three months prior to the declaration of emergency.

The reduction of the ordinary working day will affect the salary of the worker in the same proportion in which its working day is decreased.

In the case of companies where the decrease in their gross income reaches or exceeds 60% in relation to the same month of the previous year and as an unequivocal consequence of the provocative event that originates the Declaration of National Emergency, the temporary reduction of up to 75% of the weekly working day agreed between the parties according to the procedure established in the previous paragraph may be authorized.

If because of the Declaration of National Emergency, the competent authority orders the closure of a company, the reduction of its operations or its occupation, such order is enough prove before the work inspection, to authorize the reduction of the working day.

It is important to indicate that the project in its Article 6 establishes specific rules on privileges of protection and measures of gender parity. The reduction does not apply to pregnant or lactating workers.

To proceed, you must send a formal request to the to the Department of Labor Inspection, from the Ministry of Labor and Social Security, which must include the following information:

  • Work center information: name, exact physical address, activity developed.
  • Details of the employer or his representative: name and surname of the employer or legal representative of the company, identity card or passport, landline and / or contact phone number and e-mail address.
  • Channel for receiving notifications.

In the case of a company, the name of the company and legal ID number must be demonstrated with a current legal status (or personería). If the request is made by a person other than the legal representative, a special administrative power must be provided.

Additionally, the request must include the agreement or modification of the employment contract in a written manner, signed by both parties and containing the following employment information of the affected workers:

  1. Name and surname
  2. ID card
  3. Exact home address, or place to be found
  4. Landline or mobile phone number
  5. Position or function
  6. Start date of the employment relationship.
  7. Existing salary, and salary proposed and accepted by the worker
  8. Proof of affectation and decrease of income (Sworn statement or certification from authorized accountant)

All requests must be justified, indicating the facts substantiating the petition, presented in a concrete, concise, clear and accurate manner.

Other important aspects:

  • Sanctions apply if the processes established in the Law are not followed.
  • The employer must submit this request within 3 days after the reduction of working hours begins.
  • In case the Department of Labor Inspection DOES NOT accept the proposal or consider that there is no justification for it in the aforementioned assumptions, the employer must pay the entire salary to the worker within a maximum period of 8 days.
  • The Ministry of Labor will establish specific requirements within within 2 days after the Law comes into effect.

In case your company requires us to help you write the letter of application and to prepare supporting documents, please contact us at info@corderoabogados.com

Note: the purpose of this publication is to provide general information on the new regulations that govern companies in Costa Rica and is intended to be legal advice as such. Should you require more specific information regarding these issues, please do not hesitate to contact any of our attorneys.

Please contact us.