Higher minimum wages are enforced for employees

Wondering how much to pay the gardener? How about the maid? Or the company receptionist?

What they are really paid is up to the employer, but Costa Rica has established a minimum wage for all sorts of job categories. Employers must at least pay the minimum.

And each six months, the Consejo Nacional de Salaries raises the minimum. As of Jan. 1, the increase is 3.65 percent.

Although some persons in certain job categories work by the day, Tuesday is the first two-week pay day under the new salaries.

Some employees, such as gardener have a daily minimum. In the case of a jardinero, the amount is 9,340.79 colons or $19 a day at the current rate of exchange.

The maid, called an empleada domestica, is supposed to get 148,992.22 colons a month, some $303.14, assuming that she does not live in.

And the receptionist is expecting 270,579.90 colons or $550.52 a month.

The full list, prepared by the Ministerio de Trabajo, is HERE.

Recent developments have outlined some pitfalls for employers. For example, a gardener is usually considered a contract employee, someone who comes a day or two a month to mow lawns and prune trees. However, unless expats have a clear contract, they face possible major financial consequences.

If the gardener is injured, expats might have to pay the hospital bill unless the gardener is carrying his own riesgo de trabajo or workman’s compensation policy, usually with the Instituto Nacional de Seguros.

If the gardener is an employee of another firm, such as Juan’s Lawn Service, the man most likely is covered. But if he is an independent worker, he should have his own policy. In any event, the homeowner is justified in asking to see the insurance documents before letting the individual start work.

But that is just the start of the possible problems. At some time in the future, the gardener might declare that he really was an employee and demand back pay, Christmas bonuses and all the other benefits that full-time workers get. If the gardener goes to court, the expat is almost certainly to lose.

The Costa Rica Tennis Club just lost a case to a tennis instructor who used the club’s courts. That case went all the way to the Sala Segundo high labor court. Magistrates found that the instructor was an employee even though the parents of the youngsters being instructed paid him directly and the club never got any of the money. Basically, the court said that because the tennis club set the hours when the man could use the court for his classes and because the club made him wear an appropriate tennis uniform, he was an employee. The instructor got an 11 million-colon award, some $22,000 that the tennis club has to pay.

To add insult to injury, the high court ordered that the file be sent to the Caja Costarricense de Seguro Social, which most certainly will seek to collect years of social security payments, interest and penalties from the club.

Frequently expats try to cut corners by not inscribing domestic workers or others in the Caja. Initially employees go along with the scheme because they get to keep the 9 percent of their salaries that the Caja collects. Employers more than match this amount.

The short-term savings can be eclipsed by a family member of the employee suffering a serious motor vehicle accident or some other injury. Expats could face hundreds of thousands of dollars in medical bills because dependents also are included on Caja membership.

This entry was posted in Costa Rica News. Bookmark the permalink.