When you are considering hiring anyone in Honduras, keep in mind that the labor laws in Honduras favor the employee. When you hire an employee, after two months they are entitled to severance payments if they quit or you fire them even if you didn’t sign a contract.
The initial two months are considered the trial period after which the contract is a given, whether it was drawn up or not. You have what is considered a verbal, understood contract.
While most employees won’t take undue advantage of the labor laws, you’re best option is to have your attorney draft a contract of employment for a given period of time and including a severance payment for each employee. The severance payment is known as prestaciones. Doing six month contracts may be your best option as needs change frequently, but yearly contracts are better as your employee will feel more secure.
If an employee quits they are entitled to vacation and bonus payments in proportion to period of labor. If you fire them they are entitled to the above mentioned plus unemployment.
Severance (prestaciones) calculations are issued by the Ministry of Labor and state the amount owed. If you disagree with the circumstances surrounding the termination of a labor relationship or the amount due, you can ask for an inspection and the amount can be negotiated. However, in most cases employees tell their story and it’s best just to pay the amount due rather than get involved in a prolonged legal hassle often times requiring additional legal fees.
Ten Things to know about Labor Laws in Honduras
Contributed by Lourdes Aguilar, Attorney-at-Law
1. If the employer doesn’t pay employee legal benefits; the employer may be subject to lawsuit(s) that could result in embargo(s) of bank accounts, properties, businesses, vehicles, etc.
2. If you are a new employer as a result of purchasing property and the employees came with the purchase, and the old employer did not pay legal benefits to the employees; they can demand payment from you within the first six months of the change in ownership.
3. A legal trial period exists (no more than 60 days) during which the employer and the employee can judge whether or not they are satisfied with the work relationship they are trying to establish. The employee is entitled to some labor benefits during this trial period.
4. The legal workweek is 44 hours, with exceptions and payment in accordance to the law.
5. When the work relation is not subject to termination notice and legal indemnification, domestic employees only have the right to time off for vacation periods and to attend school.
6. Minors need special authorization to work from their parents or legal guardians and government labor authorities.
7. It is against the law to hire a foreigner, or be hired if you are a foreigner with irregular status and do not possess permission to work duly extended by government labor authorities.
8. An employer can never, without the correct procedure, fire a female employee who is pregnant.
9. Employers should pay a monthly minimum wage of Lps. 2,743.80 as stated by Honduran law. However, on Roatan, wages are usually higher.
10. The Labor Law protects employers who enter in a Labor Contract agreed upon and signed by both the employer and the employee. Severance payments calculated in consultation with a Labor Law Specialist should form part of the contract.
Article written March 2007, for more up to date information contact Lourdes Aguilar, Attorney-at-Law.