LABOR REGULATIONS

Labor conditions in Nicaragua are governed by eight international conventions ratified by the International Labor Organization (ILO) and the set of laws referred to in the Labor Code. The Nicaraguan Labor Code establishes the employer-employee relationship, with or without a written contract.

WORKING HOURS

  • Day shift: Work undertaken between 6 in the morning and eight at night is considered a day shift. Regular day shift hours are eight working hours daily for a 48-hour work week. Additional work must be compensated as overtime.
  • Night shifts: Work undertaken between 8 at night and 6 in the morning of the following day is considered a night shift. Regular night shift hours are seven working hours daily for a 42-hour work week. Additional work must be compensated as overtime.
  • Combined day-night shifts: A combined work shift is 7.5 hours per day for a 45-hour work week. Additional work must be compensated as overtime.

SALARIES AND COMPENSATION

  • Overtime: Work outside the regular working hours is considered overtime. According to the Labor Code, overtime is paid double the amount stipulated for regular working hours. A maximum of three hours beyond regular hours may be worked, and must not exceed a total of nine hours per week.
  • Christmas bonus: At the end of each calendar year the employer has an obligation to pay an additional month’s salary (bonus) or a sum that is proportionate to the hours worked. Payment is due on the first ten days of the month of December.
  • Severance: Severance pay is equivalent to a month per year worked up to the third year and twenty days per year up to the sixth year. Under no circumstances will the total exceed the amount earned in five months.

 

ADDITIONAL EMPLOYER OBLIGATIONS

  • INATEC: National Technological Institute. Employers must pay the equivalent of 2% of the employee’s monthly salary. This fund is available for training workers from the contributing company.
  • INSS: National Social Security Institute. All employers have an obligation to pay 15% of the employee’s monthly salary to the National Social Security Institute.

 

VACATION AND PUBLIC HOLIDAYS

Employee has a right to a paid one-day vacation for every six days worked. There are 10 national holidays and one local (community) holiday every year. These are compulsory holidays and must be paid to the employee. An employee working holidays must be compensated as working overtime.

SOCIAL BEFITS

Summary of payments
INSS (Social Security) 16%
Legal holidays 3.65%
INATEC (Training Institute) 2%
Vacations 8.33%
13th month’s pay (Christmas bonus) 8.33%
Compensation 8.33%
TOTAL 46.64%

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