The Road Not Taken

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could
To where it bent in the undergrowth;

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,

And both that morning equally lay
In leaves no step had trodden black.
Oh, I kept the first for another day!
Yet knowing how way leads on to way,
I doubted if I should ever come back.

I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.

- Robert Frost

the 1 less traveled by

A move to Nicaragua

Hiring in Nica

Employees in Nicaragua

Hiring someone to clean your home and help care for your children is a common dream for Expat parents living in Nicaragua. It is important to know the labor laws and follow them so that you do not end up in a confusing legal depute with someone you once considered family. 

The Ministry of Labor reports the 2016 minimum wage for a domestic worker is C$4,669.50 per month (or $166.75 at the time of writing this). Standard wage in San Juan del Sur seems to be about C$200-C$250 ($7-$9) per day or C$5,040-C$6,440($180-$230) per month domestic help.

A standard full time work week is 8 hours per day, 6 days a week, with Sundays off. It is common to provide a meal for workers if they do not get that time off. Otherwise one hour lunch break is required and is usually taken from 12-1pm. Since our house cleaner works through lunch time, she usually eats lunch with us, or takes her portion of what we are eating home in some Tupperware. If your domestic worker has to pay a lot of pasaje (bus fare) or taxi fees, then giving some money towards that is common.

One you have a schedule agreed on, always make sure you get a signed written time indeterminate contract. That spells out any areas either party feels can be a bit grey.

 

Holidays

Vacation Pay / Annual leave
All workers are entitled to vacation days after 6 months of continuous work with the same employer. An employee is entitled to 15 continuous days of paid annual leave after 6 months of work and 30 days of paid leave after one year of service. It is a duty of the employer to schedule annual leave and inform workers accordingly. If the employment contract expires before a worker uses all vacations days, compensation must be paid in proportion to the number of months and the number of hours worked in a week.
Source: §76-78 Labour Code 1996

Holiday pay
Workers are entitled to pay during public and religious holidays. At this time there are 9: New Year ‘s Day (January 1), Saint Thursday (April 17), Good Friday (April 18), Labor Day (May 1), Festival of Saint Domingo (August 1), Nicaragua Independence Day (September 15), Battle of San Jacinto (September 16), Immaculate Conception (December 8th) and Christmas day (December 25).
Source: §66 of the Labour Code 1996

Weekend/Weekly Rest Day
Workers are entitled to 24 consecutive hours of rest per week. The Nicaraguan labor law requires that the weekly day of rest be on Sunday for all employees, but if a worker has to work on Sunday then they are entitled to receive their wages at a premium rate of 200% of normal wages. The worker and the employer may agree to extend daily hours (with a maximum of two hours per day) in order for employee to have an extra day or partial day of off.
Source: §63-65 Labour Code 1996

 

Bonus/Aguinaldo/The Thirteenth Month

Employees have a constitutional right to get paid one month’s additional salary after a year of continuous work, or the proportionate amount according to period of time worked. It is taken from December 1st of the previous year until November 30th of this year and should be paid within the first 10 days of December every year or no more than 10 days after the end of employment. The bonus is calculated using one month of regular salary (basic salary, plus commissions, incentives, and any other amount usually earned by the worker). If the employee’s salary varies, then the bonus will be the salary of the highest paid month within the previous 6 months. If an employer fails to pay the bonus pay, the fine is 1 day’s pay for each day of past due. For employees who sleep at the home of the employer, the thirteenth month must be paid with an additional 50% monthly regular salary.

Sick Leave

Salary
Sick leave is not clearly provided under the Labor Code. However, the Social Security Act allows the payment of sick leave to an insured employee at a rate of 60% of average income in the last eight weeks working for a period of 52 weeks. The employee is entitled to sick leave after eight weeks of contributions to insurance in the previous 22 weeks. Sick leave begins after 3 days of absense, which is waived if employee is hospitalized.
Source: §92-95 Decree No. 974 of the Social Security Act

Job security
An employment contract may be temporarily suspended for the following reasons:

  1. The worker’s impairment as a result of an injury or illness, up to a maximum period of twelve months, until the disability is determined whether it is permanent, total or partial.
  2.  The common illness or accident involving incapacity to work temporarily for a period of twenty-six weeks for twenty-six weeks renewable.

 

Maternity Leave

Employees are entitled to a maximum of 12 weeks of maternity leave (4 weeks prenatal and 8 weeks postnatal) with full pay. A note from a doctor with expected date of delivery is expected. Maternity leave is can be extended to 14 weeks in the case of multiple births. In the case of miscarriage, stillbirth or other abnormal confinement, the worker is entitled to paid leave in accordance with the requirements a doctor’s note.
Maternity leave is paid in full after 16 weeks of contributions to insurance in the 39 weeks before the expected date of birth. The employer pays 40% of the maternity leave and the remaining 60% is paid through the Social Security system. If a worker is not insured, 100% of the benefit of maternity leave is paid by the employer.
Source: §141 of the Labour Code 1996, § 95-96 of Decree Law No. 974 Social Security, § 95 of the Law on Social Security Decree No. 974

 

Liquidation/Indemnización/Severance

Whether an employee is let go, fired, or quits, they are entitled to 1 month (30 days) pay for every year worked for the first 1-3 years and 2/3 month (20 days) pay for every year worked from 4-5 years. The max owed ever owed is 5 months pay. Also you must pay any unused vacation time and percentage of 13th month in portion of how many months into the year work is terminated.

This is something we just recently learned about. Our house cleaner is aware that we are planning on moving back to the US in another year and a half and she asked for her “indemnización” now so that she could use the money to finish constructing a room in her house for renting. After much research we decided to go ahead. This meant the original contract with her would be terminated and we’d write a new contract. We felt like this was to our benefit because at the end of our time living here, we won’t owe as much on our exit.

 

Social Security – Seguridad Social & Insurance – Seguro – INSS

INSS is paid based on minimum wage, see chart on saenicsa.com. The most common insurance is Integral, where employer pays 16% and withholds 6.25% from paycheck to pay to INSS office. When living in San Juan del Sur, you can register at the INSS office in Rivas, then they send bill to pay at bank.

For more information, please refer to

3 comments on “Employees in Nicaragua”

  1. Jenna just a comment, August 1st and august 10th are holidays ONLY in Managua, Saint Dominic is Managua’s Patron. It does not covers other cities or departments.

    There are also local holidays to cities.

  2. Since sick leave is not clearly provided under the Labor Code, how do most people handle sick days for domestic employees? Are they deducted from the 30 annual paid vacation days or do people keep a separate bank of time for sick leave? Is this something that should be documented in an employment contract? Also, what about holidays not nationally recognized, for example, Dia de la Madre?

    1. Sick leave is deducted from the 30 vacation days per year. If the employee wanted to take a holiday that wasn’t nationally recognized, it would be deducted as well. We kept a spreadsheet with the days our employees take off and the reason.

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