Nearshore Americas

Work From Home Bringing Legal Changes in Costa Rica

The pandemic pushed companies worldwide to adopt work from home as their new working modality, while others have begun to use a hybrid approach that includes on-site work as well. Regardless of each individual decision, remote work is here to stay. Unfortunately, the legal systems that govern this new reality have not kept pace with the rapid evolution.

For example, in Costa Rica remote work is regulated as though it takes place from the home or another place outside of the employer’s work center in the country. But as we have seen with the rise of digital nomadism, remote work can often be performed abroad.

It is increasingly common for employees to ask employers to let them work in other countries under the same conditions as in the country where they were hired. Interestingly, Costa Rica currently has no legal restrictions on companies that prevent employees from working in a different country.

Despite the current lack of restrictions on performing remote work outside of Costa Rica, the popularity of doing just that forces us to consider the legal realities of the situation. These include by are not limited to social security protection and insurance coverage of work-related accidents or illness.

Costa Rica currently has no legal restrictions on companies that prevent employees from working in a different country

For example in Costa Rica, if an employee needs medical care or leave,  the authorities require a process to validate such care or leave. This process may take months, or worse, be denied on the basis that a work accident abroad was not necessary to company employment. In addition, an employee may be held accountable for the cost of an accident abroad since it was not the employer’s obligation to cover expenses, such as flight tickets, private insurance, immigration costs or housing.  A third aspect is that an employee may need an immigration permit to stay in another country, which often entails legal costs and a loss of productive time. 

Given an awareness of such problems, Costa Rica seeks to pioneer equitable solutions to the legal contingencies arising from remote work with a bill, Ley para Atraer Trabajadores y Prestadores Remotos de Servicios de Carácter Internacional (Law to Attract Workers and Remote Providers of Services of an International Nature), that aims to attract foreign employees of companies in other countries to work in Costa Rica and to create suitable conditions for so-called nomad workers, such as granting residency and special insurance for medical attention.

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Discussions pending in support of the bill may lead us to find that remote work abroad will become a new ‘labor benefit’ and perhaps even a common form of employment. Therefore, companies should consider preparing internal regulations and agreements on this matter before forced to do so by the inevitable course of progress.

Aaron Irola

Aaron is a lawyer at BLP Legal who has specialized in labor and employment law and has extensive knowledge about immigration. He is part of the team that provides preventive and corrective advice to different companies. That experience allows him to provide prompt and accurate advice for the correct handling of the requirements of each case. You can contact Aaron here: airola@blplegal.com

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