What should an employment contract in Costa Rica include?
An employment contract in Costa Rica should encompass the following information:
- Employee’s full name, nationality, age, sex, marital status, and country of residence.
- Employee’s identification number.
- Duration of the contract (if applicable).
- Employee’s job title and responsibilities.
- Specified working hours and schedule.
- Agreed salary, payment method, payment frequency, and place of payment.
- Place of work.
- Additional terms agreed between the employer and employee.
- Place and date of signing the contract.
- Signatures of both parties.
All employment contracts must guarantee at least the minimum rights established by Costa Rican labour law, including minimum wage, social security registration, paid leave, the 13th-month salary (aguinaldo), and severance entitlements.
Both the employer and employee should carefully review the terms of the agreement before signing.
What types of employment contracts exist in Costa Rica?
There are several types of employment contracts recognised in Costa Rica:
1. Employee contract
Employee contracts are the most common type of employment agreement in Costa Rica. There are two main types:
- Indefinite-term contract: This is the standard form of employment contract and does not have a fixed end date. The employment relationship continues until either the employer or employee decides to terminate it in accordance with labour law requirements.
- Fixed-term contract: This type of contract is used for temporary or specific needs, such as seasonal work or replacing an absent employee. It must include a justified reason and a defined duration. Typically, fixed-term contracts can last up to one year, although they may extend up to five years in cases requiring specialised technical expertise. These contracts may be renewed, either explicitly or implicitly.
2. Project-based contract
Project-based contracts are used for a specific task or project. The contract remains valid until the work is completed rather than ending on a fixed date. These are commonly used in industries such as construction, IT, and consulting.
3. Temporary or casual contract
Temporary or casual contracts are designed for short-term or occasional work needs. This includes seasonal work, covering for absent employees, or tasks that are not part of the employer’s regular business activities.
Are employment contracts written, oral, or electronic in Costa Rica?
In Costa Rica, employment relationships can be formalised through written or oral contracts.
- Written contracts: These are the most common and secure form of employment agreement. They must be signed by both the employer and employee and prepared in three copies - one for each party and one submitted to the Ministry of Labour within 15 days.
- Oral contracts: These are permitted in limited cases, typically for simple, short-term, or non-specialised work (such as agriculture or temporary roles of up to 90 days). While valid, they can be more difficult to prove in case of disputes.
- Electronic contracts: Although not explicitly regulated, employment contracts signed with a certified digital signature are legally valid under Costa Rican law. Digital signatures have the same legal standing as handwritten signatures when issued by authorised certification authorities.
How to hire employees in Costa Rica?
Typically, when hiring employees in Costa Rica, companies are required to establish a legal entity in the country. This includes registering the business with local authorities and complying with Costa Rican labour laws and regulations.
However, with Native Teams’ employer of record services, you can hire employees in Costa Rica without setting up a local entity. We handle employment, payroll, and compliance, allowing you to focus on growing your business.
