- Overview: Honduras
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Contractor vs. employee: which is better?
Global HR Compliance in Honduras
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Honduras Guide below will help you understand the nuances of labor legislation in the country.
There are two main reasons for companies hiring foreign workforce:
- Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
- Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.
After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.
If you need to hire foreign workforce in Honduras so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.
With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.
We are experts in global workforce employment in Honduras, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Honduras.
Hiring and Firing Workforce in Honduras Guide
# Employment contracts
The Labor Code establishes that an employee can be hired either orally or in writing. Regardless of the form of agreement the law protects both parties (employee and employer). According to labor law the employer is responsible for producing a written agreement. If there is no written agreement the rights of the employee will take precedence in any dispute between the employee and employer.
The written agreement must comply with certain obligations. All employment relationships are contractual in nature, whether or not the terms have ever been reduced to writing. Contracts of employment (whether express or implied) exist in several different forms: fixed term, specific work contract, full-time or part-time. The compulsory terms apply regardless of the type of contract contemplated.
# Minimum (Statutory) Employment Rules and Regulations in Honduras
# Hours of work:
In Honduras there are three different monthly work hour options:
- Day Shift: 8 hours a day, but 44 hours of work per week; paying 48 hrs a week.
- Night Shift: 6 hours a night, 36 per week; and
- Mixed shift: 7 hours a day, 42 per week.
The Labor Code includes extra hours and emergency situations that can increase or decrease these hours.
# Probation period:
In contracts for an indefinite or definite period, labor code establishes a trial period not exceeding sixty days, during which either party may terminate the employment relationship without any liability to the same.
# Annual leave:
The employee accrues 10 vacation days after the first year, 12 days after the second year, 15 after the third year and 20 days after the fourth year. These days may increase if stipulated in the Internal Ruling of the Company. National holidays are in addition to those days paid with full salary. The national holidays are:
- January 1,
- April 14,
- May 1,
- September 15,
- October 3,
- October 12,
- October 21,
- December 25,
- Thursday, Friday and Saturday of Holy week.
Every worker is also entitled to enjoy a rest day for every 6 days of work.
# Parental leave:
The Labor Law includes maternity leave and pay stipulations. The legislation also requires the employer to provide rooms in the workplace for breast feeding employees who have just given birth. There are no statutory regulations about paternity leave and pay, adoption leave and pay, parental leave and pay, or others family rights.
Employees that are pregnant have the right to 10 weeks of rest, during which they have are to be paid by the employer. Four weeks will be rest before the expected week of childbirth, and the other 6 weeks will be rest after the birth.
Medical assistance will be carried by the social institution that protects maternity rights. With regard to disability leave, if the employee is not enrolled in Social Security, the employer will be forced to pay an amount of money by way of compensation, which will be determined by the authority according to the circumstances of the case and considering if the disability is partial or complete. If the employee is enrolled in Social Security, this institution has to pay the compensation as well as the pension for the disability.
# Sick leave:
The labor law and other complementary legislation in this matter, set mandatory requirements relating to illness and disability. This includes the right of the employee to receive compensation according to the professional risk that caused the illness or disability, from the National Institute of Social Security and the right to receive 67% of its salary from the National Institute of Social Security, as long as the employee is on sick leave, up to a maximum of seven thousand lempiras. Any difference upwards of 7 thousand lempiras must be payed by the employer.
The Employer is under an obligation to maintain its registration at the National Institute of Social Security otherwise the employer will have to assume all the expenses and the salary of the employee.
# State minimum salary:
Range of minimum wages from 5,681.73 Honduran lempiras per month (22.44 lempiras per hour) to 8,803.70 lempiras per month (36.68 lempiras per hour.) Honduras’ minimum wage was last changed in January 2016.
# Employee dismissal:
These are the ways to terminate an Agreement:
Fair Cause: When the worker has committed a serious offense as established in the Labor Code or in the Internal Rulings of the Company.
Without Fair Cause: The employer may dismiss an employee at any time and pay by law the indemnification established in the labor code.
When the employee is working under a contract with fixed time: The employee can be dismissed at any time alleging fair cause having the previous approval from the Ministry of Labor or when the contract expires.
In all cases the termination of an employment contract must comply with the terms of the contract. In most cases, there are certain minimum steps which must be followed before termination to avoid the termination amounting to an unfair one.
The employer can dismiss the employee without any explanation or reason, as long as the employer pays the employee’s compensation according to law. There will always be a risk that the employee does not accept the payment and files for reinstatement.
The agreement can generally always be terminated by the employee’s resignation. The parties can terminate the agreement on notice, pursuant to the terms and conditions stipulated in the employment contract or the law. The employment can be terminated due to the employee’s age but only once the employee reaches the applicable retirement age. The employee has the option to retire or continue working.
The contract will be deemed “frustrated” where intervening events make its continued performance impossible, although instances are rare. Death of the employee or complete destruction of the workplace by earthquake, etc., are examples. The parties are entirely free to agree termination on any grounds they desire based on the free will of the parties to contract and good faith.