March 25, 2020 SPECIAL COVID-19 ISSUE

COSTA RICA - Labor and Employment Law in Costa Rica: Response to COVID-19

By: María Lucía Alvarado, Aguilar Castillo Love, Costa Rica

The spread of the coronavirus is advancing so fast that it has forced governments of different countries to put into practice rules of exceptional use or to create new ones to face this pandemic.

Labor law in Costa Rica has adapted quickly to what is dictated by the daily evolution of this phenomenon unknown to our generation. At first, at yellow alert, the Ministry of Labor issued criteria to publicize the implications that could occur in labor relations and the possible legal solutions that could be applied by private sector companies to face the arrival of the virus.

It was established that:

a) If a doctor from the Costa Rican Social Security Fund (CCSS) rules that someone tests positive for the virus, this person would be entitled to medical disability from social security.

b) Employers could grant vacations to all workers who have the right to vacations in their favor.

c) Employers and workers could agree to use the teleworking modality (recently regulated in our country by law 9738), and

d) The employer would have the power to suspend the employment contract for reasons of fortuitous event or force majeure. In this case, by previous authorization of the Ministry of Labor, an employer could suspend the employment contract with an employee without pay, in order to maintain the employment relationship and prevent dismissals, allowing the employee not to provide the services and therefore, the employer would not have to pay the corresponding salary for a determined term.

However, in recent days we have gone from a stage of prevention to a state of emergency, in which we have seen an increase in cases of contagion and, consequently, the closing of borders, the closing of shops, and the suspension of sports and entertainment events, among others.

This has caused a great impact at the employment and economic level. Labor-level measures have been swift. The Congress has just taken the first step to approve a bill to permit employers to reduce the workday by up to 50% if their income drops by 20%, and up to 75% if their income drops by 60%, in order to protect people's employment during this situation.

On the other hand, the CCSS approved a series of temporary measures to mitigate the economic impact on employers and independent workers, due to the crisis. It is about making more flexible the readjustment of payment agreements, reducing the interest rates of payment agreements, and postponing collection procedures for employers and independent workers.

María Lucía Alvarado

Aguilar Castillo Love, Costa Rica