How to create offer letters for employees in Costa Rica
When you hire an employee in Costa Rica, the offer letter (also called an employment contract) is an important part of the process.
In Costa Rica, a verbal offer of employment is only allowed in limited cases, like for temporary work, domestic work, or jobs related to crops and livestock. For full-time employees in most positions, you'll need a legally compliant employment contract—with one copy for you, one for the employee, and one for the Employment Bureau of the Ministry of Labor and Social Security.
Because the contract is required by the government, there are strict requirements for what it needs to include. Additionally, the offer letter helps set the right expectations and clearly defines the conditions of employment for you and your new employee.
Ready to write an offer letter to a full-time employee in Costa Rica? Here's everything you need to know.
Costa Rica job offer letter checklist
- Employee information. This should include the employee's name, nationality, age, sex, and marital status.
- Addresses of all parties in the contract. The Employment Bureau of the Ministry of Labor and Social Security will require exact, up-to-date addresses for all parties signing the employment contract, as well as the address of the workplace.
- Term of the contract. Most contracts for full-time employees in Costa Rica will be for an indefinite term. If the contract is for a fixed term, be sure to clearly define it. Under Costa Rican labor laws, if the employee works beyond the end date of a fixed-term contract, the contract is then considered indefinite.
- Position (job title), job description, responsibilities, tasks, and start date. Clearly defining all of this in the employment contract helps ensure that the employee and your company are aligned on what's expected of them in their new role.
- Probationary period. You should explain that their suitability for their job duties will be evaluated during their probationary period. In Costa Rica, probationary periods typically last three months.
- Working hours. Outline the expected working hours and any overtime policies that the employee will be subject to. Under Costa Rica's labor laws, the maximum number of hours an employee can work per week is typically 48 hours. Any work over 48 hours is typically considered overtime, and must be paid at 150% of regular wages (or 300% on holidays or weekly rest days).
- Compensation & Benefits.
- Salary. Specify the employee's salary or hourly compensation in CRC, as well as any other compensation they may receive.
- Equity. If applicable, specify any equity compensation they will receive. Note that the Costa Rican Supreme Court has ruled that stock option plans cannot be considered part of an employee's salary, but should be treated as additional compensation.
- Christmas bonus details. Employees in Costa Rica are entitled to a 13th month salary payment or Christmas bonus, called an aguinaldo. This is equivalent to one month's salary and must be paid within the first 20 days of December. Your offer letter can include details about the amount and timing of this payment.
- Benefits. Benefits could be outlined in the offer letter, but be sure to address them in general terms so that if they change in the future, an amendment to the offer letter isn't required. In Costa Rica, the following benefits are mandatory for full-time employees:
- Social security contributions
- Annual leave
- Public holidays
- Parental leave
- Sick leave
- Overtime pay
- Severance pay
- Vacation. The employment contract should include details about your company's vacation leave policy, especially if you offer more leave than the statutorily required vacation in Costa Rica.
- Working conditions. Include any details about the employee's working conditions, including when, where, and how they will be expected to complete their work.
- Termination policy. Clearly explain the terms of termination, including any conditions that may lead to termination. Note that employees in Costa Rica can be terminated without just cause, but the required notice period and severance pay will depend on the length of their employment. Employees terminated with just cause are not entitled to notice or severance but must be paid for their acquired vacation days and any portion of their Christmas bonus that they've earned that year.
- Canton, district, and date of signature. Include details about the canton and district where the agreement is being signed, as well as the date of signature. Note that there should be witnesses present at the time that all parties sign an employment contract.
- Non-compete and non-solicit agreements. Include provisions outlining the employee’s non-competition and non-solicitation responsibilities after leaving your company—but only if they’re appropriate for your employee. Be warned: while non-compete agreements are legal and enforceable in Costa Rica, labor laws require that you compensate the employee for the full duration of the agreement. If your employment contract includes a non-compete clause, it must also include details about the employee's compensation during the non-compete period.
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Disclaimer: Rippling and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
