The payment is called the aguinaldo is payed to all employees. If they worked less then the full year the payment is prorated. An excellent article about this in AM Costa Rica this morning.


Costa Rica has economic stimulus plan of its own

By the A.M. Costa Rica staff

The world economy may be dragging, but Costa Rica will soon see a stimulus program of its own, a traditional one.

Fast approaching is the time when employers have
to come up with the aguinaldos for their workers. Some 1.7 million workers in private industry will share in 426 billion colons or about $774 million, according to an employer's group. That works out to about $467 per worker. Although the actual figure is based on the year's salary.

The alguinaldo, the so-called 13th month's pay, is so enshrined in tradition and the country's labor law that there are few employers going around like Ebenezer Scrooge claiming "It's a poor excuse for picking a man's pocket every 25th of December." There sill are a few employers who try to stiff their workers and end up in labor court each year.

George Bush distributed up to $1,000 to each U.S. taxpayer, and Barack Obama is considering another stimulus payment when he gets in the White House. The impact of aguinaldos in Costa Rica is far greater than anything seen with the Bush program.

Stores will raise their prices. Crooks will patrol the streets and automatic teller machines. But in general everyone will have a happy face as they go Christmas shopping with the salary bonanza. Public employees will be getting their alguinaldo, too.

It was the Unión Costarricense de Cámaras y Asociaciones del Sector Empresarial Privado that estimated the alguinaldo payment this year based on the most recent household survey by the Instituto Nacional de Estadística y Censos.

The employer group said that alguinaldos will be about 3 percent more in real terms this year than in 2007. That is because there are 21,437 more workers this year, and the average income is up about 1.57 percent, the organization said.

According to the law, employers must make this payment in the first 20 days of December. The good news is that no social charges to the Caja Costarricense de Seguro Social are levied on the payments.

Most employers have been planning for months by stashing cash. Nearly all work alguinaldo into their annual budget. Some who do not might be expats who employ just one or two workers in the home. Even part-timers are due their alguinaldo, and those who get meals or housing expect to be compensated for those benefits when the employer makes the payment.

The payments represent a boon for national tourism, which has been struggling lately. Many families invest the alguinaldo in a Christmas stay at the beach or in the mountains.

I don't see the part where it is prorated? It this is true, then an employed hired on 9/1 would only get paid 30% more, correct? The thing that kills me is that this employee also has sales quotes which she is not even close to. I hate to have to pay her more, when I should be paying her less or firing her.

Don't hire anyone unless you absolutely have to.... Employees are worthless here... There is no way to fire them, no matter what they do, without a big payout.....

You should check with your attorney. My understanding is that the payment is prorated. In regards to the underachieving empolyee I also understand that all employees are on a 90 day probationary period and can be terminated in that period with no liability to the employer. In that case you can let this employee go if you act expeditiously. Again, I am not an attorney so check with yours.

There is an interesting story in AM Costa Rica today about employees and health insurance. It seems that you have to pay insurance for "casual" employees like gardeners, etc. too. Does this mean that we should be paying for health insurance for our chicas