Expats can be blindsided by injuries to employees

Having workers compensation for all employees is the law in Costa Rica.

The top labor court of the country, the Sala II, and the constitutional court, the Sala IV, have ordered people to pay medical expenses, even lifetime allowances, to hurt workers when they are not individually covered by insurance.

People with domestic workers are among those who skirt the law.

Many do not understand their options to cover employees properly.

Here is a list of the different workers compensation insurance options available from the Instituto Nacional de Seguros, better known in Costa Rica as INS. Workers compensation is known as riesgos del trabajo in Spanish. A literal translation would be workplace hazards. INS shortens the words for their workers insurance policies to RT. This is nice to know when talking to an insurance agent.

RT Obligatoria (obligatory workers compensation): This is the policy businesses use to insure workers. The cost for this insurance is a percentage of gross salaries paid each year. Work risk determines the percentage amount.

RT Hogar (home workers compensation): This policy come in two flavors: one or two domestic workers with one occasional worker. This is the policy people with domestic workers should have in Costa Rica. It is important to note, the definition of domestic worker is someone working inside the house cleaning and serving not in a job that involves risk. Any occasional worker cannot work more than three days a month. Most people to not know this fact and believe RT Hogar covers gardeners and outside maintenance workers. It does not, if they work more than this amount of time.

Seguro RT Patrono Asegurado (workers compensation for business owners): If anyone is doing business in Costa Rica but have not put themselves on the payroll, they, too, must have workplace hazard insurance. This policy is exclusively for individuals in this situation.

Seguro RT Independiente (self-employment insurance): This policy is for self-employed people, for example, a real estate agent operating in Costa Rica working for him or herself. Most real estate people would be surprised to learn the law requires them to have workers compensation insurance. Some are not even legal residents and do not pay taxes on their earnings in the country.

Seguro RT Adolescente (adolescent work hazard insurance): This policy is for the underage children working for family members in a family business.

There is a nice work-around for RT Hogar for a homeowner. INS has a policy called Seguro Hogar Comprensivo (comprehensive homeowners insurance) which covers fire and other risks and includes workers compensation for domestic workers. The same restrictions apply for outside occasional workers. If they work more than three days a month, they are not covered under this policy.

A retired expat with one in-house housekeeper should use RT Hogar or Seguro Hogar Comprensivo to cover the individual.  However, if they add a gardener to the mix and the person works more than three days a month, they would also need to have a RT Obligatoria policy to cover that person.

Many people believe they do not need to cover these occasional workers. The law is clear that part-timers with few jobs are employees. Many of these types of workers do not carry the required insurance making them that much more of a liability.

INS has special policies for workers involved in a special project, for example,  painting, repairing things, construction projects, or other activities. This insurance ouch9052515is required nowadays to get building permits.

Some years back a Tico contracted a person to paint a house. The painter fell, and the fall resulted in blindness. The Tico did not have workers compensation insurance. The labor court ordered him to cover all medical expenses and around $500 a month for life to the injured painter. The insurance would have cost him less than $50 for 30 days of painting.

Hiring uncovered workers is asking for a nightmare.  Far too many expats are playing with fire when managing their household staffs and contract workers. Some even play games with their laborers in their business. INS has a wide range of reasonably priced options to cover the risks. Why play with fire?

INS workers compensation insurance is not health insurance. The Caja Costarricense de Seguro Social, known to most as the Caja, covers sickness and non-work related mishaps.  INS is only responsible for work-related accidents. The two institutions are very careful about not covering a liability that is not theirs. They do extensive investigations into claims.

The problem for everyone in Costa Rica hiring workers is the same. Many people show up on the doorstep asking for work and say they are covered by this or that policy when, in fact, they are not covered by any insurance at all.

One example that stands out is gardeners and home maintenance workers. They are everywhere keeping properties looking nice. These people usually work with equipment like lawn mowers, weed eaters and the like. They climb trees to cut branches, get on the roof to clean gutters and do other somewhat hazardous work.

Expats fall into four categories:

1.) They have no workers compensation insurance for their workers.

2.) They have RT Hogar or Seguro Hogar Comprensivo and think their workers are covered when in fact they are not because they work more than three days a month.

3.) They believe a worker is covered because the employee told them that he or she was.

4.) They are 100 percent in line with the law, and all workers are covered correctly.

It is safe to say those under category four are a rarity. Expats in situation one, two, and three are more common. They are there either because they are trying to save money by evading the law or because they are unaware of the law about covering workers with insurance.

INS agents tend to be a helpful lot. Some are more helpful and knowledgeably than others. Most speak some English. Other are completely fluent. A good starting point to get legal is calling an agent. INS will refer representatives for those needing one.

Garland M. Baker, a certified international property specialist, is a 45-year resident and naturalized citizen of Costa Rica. His firm’s team provides multidisciplinary professional services to the country’s international community.  Reach him at info@crexpertise.com.  Baker has undertaken the research leading to these series of articles in conjunction with A.M. Costa Rica.  Find the collection at http://crexpertise.info, a free reprint is available at the end of each article.  Copyright 2015. Use without permission prohibited.

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