Littler Global Guide - Central America - Q2 2017

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

View all Q2 2017 Global Guide Quarterly updates

Panama: New Legislation Creates Paternity Leave for Working Fathers

New Legislation Enacted

On May 23, 2017, President Juan Carlos Varela signed into law a bill that creates a mandatory paternity leave for working fathers. Law No. 27 became effective upon its publication on May 25, 2017, and establishes a mandatory paid leave of absence for employees whose spouse or domestic partner is pregnant. The leave is paid by the employer and is three-days long, beginning on the date on which the employee’s child is born. For all legal purposes, the length of the paternity leave is construed as time worked and the employee is required to present a birth certificate to justify the absence.

Costa Rica: Increases to Employee’s Contribution to the Social Security System

New Order or Decree

On June 1, 2017, the Board of Directors of the Costa Rican Social Security Administration (Caja Costarricense del Seguro Social – CCSS) raised the contribution percentages that every employee in the country must pay out of their salaries. Previously, the CCSS had raised the percentage by 1%, effective June 1. After pushback from several sectors, the CCSS overruled the first decision and, instead, raised the percentage by 0.5%, effective on July 1, 2017. With this increase, every employee will contribute 9.84% of their monthly wages to social security. A new 0.5% raise is expected in January 2018, which will settle contributions at 10.34%.

Nicaragua: Unions, Employers and Government Reach Agreement to Raise Wages in Free Zones

New Regulation or Official Guidance

On June 8, 2017, representatives for unions and employers, brought together by the Ministry of Labor (Ministerio del Trabajo – MITRAB), reached an agreement to increase the minimum wage for employees of companies under the “free zone” regime by an annual 8.25%. Beginning in 2018 and until 2022, the minimum wage will increase annually by 8.25%, meaning that the minimum wage in free zone companies will be 41.25% higher in 2022 than they are today.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.