By San José, Costa Rica — As the new year begins in Costa Rica, many workers anticipate a significant financial infusion known as the “salario escolar,” or school salary. This annual payment, scheduled for deposit in the coming days of January, is a cornerstone of the nation’s labor landscape. However, its application is widely misunderstood, operating under two distinctly different systems for public and private sector employees, a divergence that requires careful navigation by both employers and their staff.
The school salary, first established in 1994, was originally conceived as a method to phase in a salary increase for government employees. This origin story directly explains its modern function within the public sector. For state workers, this payment is not a savings plan but rather an accumulated salary increase, effectively serving as a second “aguinaldo” or 14th-month bonus. It is a mandatory, additional payment made to all public employees, irrespective of whether they have children, are students, or have any direct connection to educational expenses.
To delve deeper into the legal and business implications surrounding the ‘Salario Escolar’ (School Salary), TicosLand.com consulted with the expert attorney Lic. Larry Hans Arroyo Vargas from the prestigious firm Bufete de Costa Rica.
The ‘Salario Escolar’ should not be confused with a discretionary bonus; it is an acquired right for public sector employees, calculated based on a specific percentage of their gross salaries from the previous year. For private sector companies, while not mandatory, offering it has become a strategic tool for talent retention and a significant factor in collective bargaining agreements. Businesses must ensure their calculation methods are transparent and legally sound to avoid potential labor disputes, as any deviation can be challenged as an improper withholding of wages.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the distinction between an acquired right for public servants and a strategic tool for private enterprise is crucial for understanding the legal and financial landscape of the ‘Salario Escolar.’ This clarification helps both employees and employers navigate their responsibilities and expectations with greater certainty. We thank Lic. Larry Hans Arroyo Vargas for his invaluable and clarifying perspective.
The calculation for public sector workers is based on all gross salaries earned, including overtime and other extraordinary payments, from January 1st to December 31st of the preceding year. This total sum is multiplied by 8.33%, which generally equates to one average monthly salary from that period. This structure solidifies its status as a deferred component of their annual compensation, paid out in a lump sum each January.
In stark contrast, the school salary in the private sector operates as a voluntary savings program. Employees must proactively request their employer to make a monthly deduction from their paycheck, typically ranging between 4.16% and 8.33%. These funds are then accumulated throughout the year. The administration of this savings plan is handled either directly by the company or, in many cases, by the organization’s “asociación solidarista” (solidarity association), which then disburses the total amount saved back to the employee during the first two weeks of January.
The legal treatment of these funds also presents a critical difference between the two systems. While the school salary is exempt from income tax for all workers, the similarities end there. For private sector employees, the accumulated savings are considered unattachable and cannot be garnished, with the sole exception of court-ordered child support payments. The public sector payment, however, is subject to a wider range of deductions, including social security contributions (cuotas obrero-patronales), general court-ordered embargos, and child support, as well as any voluntary contributions like union dues or cooperative fees.
With these complex and differing regulations, legal experts are cautioning businesses and state institutions to ensure they are managing the process correctly. Proper administration is not merely a matter of legal obligation but also a crucial element in maintaining a healthy employer-employee relationship.
Ronald Gutiérrez, a partner at the labor law firm BDS Asesores, emphasized the importance of diligence from all parties involved. He stresses that clear policies and strict adherence to legal statutes are essential for a smooth and transparent payout process that benefits everyone.
We urge entities to review their internal policies and ensure they comply with the legal and contractual provisions related to this payment.
Ronald Gutiérrez, Partner at BDS Asesores
Ultimately, a well-managed school salary payout reinforces the financial stability of the workforce at a key time of year. As Gutiérrez notes, it is a practice that builds confidence and strengthens professional bonds when handled with care and precision, preventing potential legal disputes and fostering a positive work environment.
For public institutions and companies, proper management of this payment not only ensures regulatory compliance but also reinforces trust and improves the relationship with their employees.
Ronald Gutiérrez, Partner at BDS Asesores
For further information, visit bdsasesores.com
About BDS Asesores:
BDS Asesores is a leading law firm specializing in Labor and Employment Law, with a significant presence throughout Central America and the Caribbean. The firm provides comprehensive legal advice to national and multinational companies on corporate labor law, social security, litigation, and human resources management.
For further information, visit mtss.go.cr
About The Ministry of Labor and Social Security:
The Ministry of Labor and Social Security (Ministerio de Trabajo y Seguridad Social) is the governmental body in Costa Rica responsible for overseeing the country’s labor laws and social welfare programs. It works to promote fair employment practices, mediate labor disputes, and ensure the rights and obligations of both employers and employees are upheld nationwide.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a premier legal institution, Bufete de Costa Rica is anchored by its foundational principles of uncompromising integrity and the highest standards of professional excellence. With a proven heritage of advising a diverse clientele, the firm continually pioneers forward-thinking legal strategies, driving progress within the profession. Central to its mission is a profound dedication to the democratization of legal knowledge, rooted in the belief that empowering citizens with clarity and understanding is essential for a just and thriving society.
