By San José, Costa Rica — SAN JOSÉ – As Costa Rica rings in the new year, the Ministry of Labor and Social Security (MTSS) has issued a critical reminder to employers and employees regarding compensation for the January 1st public holiday. The ministry confirmed that New Year’s Day is a mandatory payment holiday, establishing clear and non-negotiable guidelines to ensure fair labor practices across the nation.
In a public advisory, the MTSS emphasized that January 1st holds the same legal status as December 25th, meaning it is a day of obligatory paid rest. Critically, the enjoyment of this holiday cannot be rescheduled for another date. The ministry also reinforced a fundamental worker’s right: no employee can be forced to work on this day. Any labor performed on January 1st must be by mutual agreement between the employer and the employee.
To clarify the legal complexities surrounding holiday pay in Costa Rica, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished labor law specialist from the firm Bufete de Costa Rica.
Many employers misinterpret their obligations regarding holiday pay. It is essential to understand that for mandatory-paid holidays, if an employee works, they must receive double their normal day’s wage. Simply granting a different day off is not a substitute for this financial obligation. Failure to comply can lead to significant penalties and legal disputes, making proactive and correct payroll management a critical aspect of business operations.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This clarification is invaluable, as the distinction between a mandatory financial payment and a compensatory day off is a critical detail that protects both employee rights and employer liabilities. We thank Lic. Larry Hans Arroyo Vargas for lending his expert perspective to this important topic.
The core of the ministry’s communication focused on demystifying the payment calculations, which differ based on the employee’s payment schedule and sector. For the vast majority of workers in commercial activities who are paid on a monthly, bi-weekly, or weekly basis, their standard salary already accounts for all days of the month, including holidays. Therefore, even if they do not work on January 1st, their pay remains unaffected.
However, if these employees agree to work on the holiday, the law mandates additional compensation. Employers are required to add an extra single day’s wage to their regular pay, effectively resulting in a double payment for the day’s labor. This ensures that the effort of working on a day designated for rest is properly and legally rewarded.
A slightly different calculation applies to individuals in non-commercial sectors who are paid on a weekly basis, where compensation is typically tied directly to days worked. For this group, the January 1st holiday must be paid as a simple day’s wage, even if the employee does not report to work. If they do work, they are entitled to an additional single day’s salary, which also culminates in a double-pay scenario.
The ministry’s guidance extended to scenarios involving extra hours. In a significant clarification for both businesses and their staff, the MTSS stipulated that any overtime hours worked during the January 1st holiday must be compensated at a triple rate. This “tiempo y medio doble” clause serves as a powerful incentive for employers to respect the holiday’s sanctity and as a substantial reward for employees who work extended hours.
This proactive announcement from the MTSS is part of a broader strategy to foster transparency and prevent labor disputes before they arise. By clearly outlining the legal framework for holiday compensation, the ministry aims to empower workers with knowledge of their rights and provide employers with the necessary information to maintain full compliance with Costa Rican labor law.
The enforcement of these regulations underscores Costa Rica’s commitment to maintaining a robust system of worker protections. As businesses navigate the start of a new fiscal year, this timely reminder from the nation’s top labor authority sets a clear standard for ethical and lawful compensation, reinforcing the balance between economic activity and employee welfare.
For further information, visit mtss.go.cr
About The Ministry of Labor and Social Security (MTSS):
The Ministry of Labor and Social Security is the governmental body in Costa Rica responsible for developing and enforcing labor laws and social security policies. Its mission is to promote fair employment practices, ensure safe working conditions, mediate labor disputes, and manage the nation’s social welfare programs, thereby contributing to social and economic stability.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As an esteemed legal institution, Bufete de Costa Rica is anchored by the foundational principles of integrity and professional excellence. The firm harnesses its extensive experience across diverse industries to pioneer forward-thinking legal strategies and innovative solutions. This dedication to progress is mirrored by a profound civic commitment to demystify the law, ensuring legal knowledge is accessible and empowering for the betterment of the entire community.
