Background:

Costa Rican labour law says employers must protect their employees in 2 ways: (1) with Social Security (“La Caja”), which covers sickness, pregnancy, and non work-related accidents for the employee and his/her dependants, and; (2) with Workers’ Compensation, where the premium is paid by the employer, and covers work-related accidents. If an employer fails to protect his employees, he is responsible for any domestic work-related accidents which otherwise would have been paid for by INS.

Social Security is not the real subject of this article. Information can be obtained from La Caja itself, phone 257 7200, in Spanish. Workers’ Compensation is provided by INS. It comes in two forms: “normal” Workers’ Compensation (Riesgos del Trabajo, or RT), and Domestic Workers’ Compensation (Riesgos del Trabajo - Hogar, or RTH), which is a special cheaper version where the red tape is slashed.

Normal Workers' Compensation:

(RT) To obtain coverage, the employer must enrol with INS, and provide his employees’ names, ID numbers, rates of wages, and job descriptions (one word: e.g. guard, clerk, electrician, etc.) INS will determine, according to the perceived risk, what percentage of the payroll must be paid. Premiums are around 2-3% of payroll, paid in advance, usually by month. The rate is adjusted if there are a lot of workplace accidents. The employer must keep INS informed of hirings, firings, and other relevant personnel information RIGHT AWAY, and must send INS all payroll information on a monthly basis. This monthly information can now be sent to INS over the Internet, thereby saving some leg work, but the Internet connection is sometimes difficult: for further info call 287 6038. Due to the detailed reporting requirements and the erratic internet system (or maybe because I am being old-fashioned?) I feel it is best for employers to handle RT directly with the most conveniently situated INS office.

Domestic Workers' Compensation:

(RTH) About 4 years ago INS realised that few employers were insuring domestic workers for Workers’ Compensation, mostly because they did not want to embark on all the paperwork and red tape, and also because RT processing required that employees’ ID numbers be submitted – and a lot of domestic help is provided by undocumented Nicaraguans with no acceptable ID. So INS slashed the red tape, brought down the cost, and allowed for undocumented workers: thus the RTH policy was born.

INS provides two standard RTH policy options. If your domestic arrangements do not conform to either, you should buy a “normal” Workers’ Compensation policy, RT. The RTH options are:

One (up to) full-time domestic employee (maid, servant, cook, housekeeper, etc. – but not a guard or driver) plus one other person (gardener, odd-job person, etc.) for up to two days per month. (Can be divided into 4 half days per month.) Yearly cost, C.9,950 in advance.

Two (up to) full-time domestic employees (as defined above), plus one other person (gardener, odd-job person) for up to two days per month. Yearly cost: C.17,900 in advance.

To get RTH, your insurance Agent fills out and you sign a RTH form with your name and ID number, and the name(s) and or ID number(s) of your domestic employee(s). The cover becomes effective when the premium is paid.

If you change maid, cook etc. during the insured year, you must write INS a note with the new info, and the coverage then transfers to the new hire.

Lately, some people have asked if an RTH policy is OK if the domestic employee is part-time – for example, a maid who comes in for 4 hours every day or three days per week. The answer is yes, it’s fine, because you are in fact under-utilising the policy.

There has been a recent communication from INS requiring that employers with RTH policies report their payrolls by Internet on a monthly basis, in exactly the same manner as the RT policy holders. As this is against the spirit that created the RTH policy in the first place, I checked the entire General Conditions (a.k.a. the small print) on the RTH policy, and no payroll reporting requirement is mentioned. INS threatens that if an employee of an RTH policy holder has an accident and the employer has not been reporting his monthly payroll, they will not honour a claim: this would be in direct violation of the General Conditions or the RTH contract, I have never heard of INS refusing a claim for this reason, and INS would probably be shot down by the Ombudsman’s office if they enforced their threat...but who is wasting for a fight? Better to send the monthly payroll report and hope that INS soon sees the error of its ways!

Accidents:

A form “Orden de Atención Médica” (Request for Medical Attention) must be completed and signed by the employer. If the accident is serious, call 911 for an ambulance. If not serious, send the employee (with the form) to the INS clinic near Hospital Mexico. Ask your insurance agent for a form to have on hand in case there is an domestic accident involving an employee.