In response to the recently declared national emergency stemming from the COVID-19 crisis, on March 20, 2020, the government revised and published, via Executive Decree N° 42248-MTSS, new Regulations for the Request of a Temporary Suspension of Employment Agreements.

The following is the procedure to be applied to request the temporary suspension of employment agreements:

1. The temporary suspension request must be made to the General Inspection Office of the Ministry of Labor, within three days after the event that originated the request ensued. However, the employer is still allowed to request the suspension of employment agreements at any time, as long as the event that originated the request is still existent.
2. The request may be made or filed at the relevant branch of the Ministry of Labor where the workplace is located.
3. Specific information must be provided in the request.

Once the request has been filed, the Inspection Chief will have two business days, counted as of the day in which they were informed of the case, to issue the corresponding decision, which can be to accept or reject the employer´s request.

The Inspection´s decision will be immediately notified to the requestor, via the e-mail address provided to receive notices. The employee representative will also be notified of the decision. Once the suspension term has elapsed, the Inspection Office will notify employees about the return to regular work.

Also, Law N°9832, Law to Authorize the Reduction of Work Shifts Due to the Declaration of National Emergency, was published on March 23, 2020. The law´s main provisions are:

Meaning of gross income impact: when income has been reduced, as an unequivocal consequence of the triggering event of the national emergency declaration, by, at least, twenty percent (20%) in relation to the same month last year (2019).

The employer may unilaterally amend the employment agreements to reduce by up to fifty percent (50%) the number of hours of the employee´s standard work shift, as long as there is an impact due to the triggering event. For this, the employer must begin within three days after the date of commencement of the reduced work shifts, the corresponding authorization process.

In the case of companies where the reduction of gross income is more than sixty percent (60%) in relation to the same month last year (2019) and as an unequivocal consequence of the triggering event of the national emergency declaration, the temporary reduction of the work shift of up to seventy-five percent (75%) may be authorized.

The reduction of the work shift is a temporary measure to be set for a maximum of three months. The reduction can be extended up to two equal terms (two three-month additional terms) if the effects of the triggering event are still existent and the employer so shows it to the Inspection Office of the Ministry of Labor. The work shift reduction exception will not apply to pregnant or nursing employees; for all other protected employees, the work shift reduction exception will only proceed when the decision will be applied to, at least, ninety percent (90%) of the company´s workforce.

Employers can agree with employees the temporary interruption of work with pay, during the effects of the emergency declaration. In this case, the employees will make up, in a maximum term of one year, the time did not work that was paid to them under the conditions agreed with the employer.

To conclude, the Board of Directors of the Social Security Administration approved a reduction of seventy-five percent (75%) in the minimum base contribution (BMC) in force in health and pension insurance during the next three months (March, April, and May 2020).

This decrease will be applied to the employer's payroll, contributions from independent workers (included those with a collective agreement), and public sector workers who report part-time work.

The above, with the purpose of supporting employers, employees, and independent insureds, due to the current declaration of national emergency as a consequence of the COVID-19 crisis.
For illness and maternity insurance, the minimum contribution base will decrease from ¢294,619 to ¢73,654. For the Disability, Old Age, and Death, the contribution will reduce from ¢275,756 to ¢68,639.

The Employment & Labor and Immigration practice of Dentons Muñoz Costa Rica offers legal advice relating to:

• Employer requests to obtain the required government authorizations for employment agreement suspensions and reduction of work shifts.
• Legal opinions about the new measures and regulations during a national emergency.
• Practical and strategic best practices to prevent future legal issues.

To obtain legal advice on Costa Rican Employment & Labor and Immigration Law, please do not hesitate to contact us.