- Overview: Nicaragua
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Nicaragua
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Nicaragua Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Nicaragua and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Nicaragua as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Nicaragua instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Nicaragua .
We are experts in global workforce employment in Nicaragua, 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 Nicaragua.
See Hiring and Firing Workforce in Nicaragua Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Nicaragua or would like to get more details.
Hiring and Firing Workforce in Nicaragua Guide
# Employment contracts
All employment relationships are eventually 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 (time), or contract without a term. The compulsory terms apply regardless of the type of contract contemplated.
There are three types of employment contract in Nicaragua:
- Indeterminate contract – there is no set end-date in this type of contract; it may be terminated at will by either employer or employee.
- Determinate contract – determinate contracts in Nicaragua are issued with an end-period. It is very important to know that if the contract is terminated before the set end-date, the employer will have to pay the remainder of the contract.
- Contract for professional services – this contract is designed for self-employed workers. The benefit to workers is that they can work when and where they want, and for employers it means they do not have to pay any benefits, making the cost cheaper.
# Minimum (Statutory) Employment Rules and Regulations in Nicaragua
# Hours of work:
Subject to certain exceptions and shifts, labor law imposes a cap of 48 working hours per week. For night shifts, there is a maximum of 42 hours per week, and a limit of 45 hours per week applies for mixed shifts.
# Probation period:
In contracts for an indefinite period, the parties can agree a trial period not exceeding thirty days during which either party may terminate the employment relationship without any liability to the same.
# Annual leave:
Every worker is entitled to enjoy a fortnight’s rest and continuous way of paid vacation for every six months of uninterrupted work in the service of one employer.
# Parental leave:
The Labor Law of Nicaragua includes maternity leave and pay stipulations. The legislation also establishes some duties of the employer related to the conditions of rooms in the work place to be designated to the lactation of the employees who have just given birth. The legislation doesn’t set 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 of 12 weeks of rest, which have to be paid by the employer. Four weeks will be rest before the expected week of childbirth, and the other 8 weeks will be rest after the birth. In case of multiple births, the employee has the right of 10 weeks of rest. The medical assistance will be carried by the social institution that protects the maternity rights. With regard to disability, if the employee is not enrolled in Social Security, the employer will be forced to pay an amount of money in concept 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 that 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 60% of its salary from the Nicaraguan Institute of Social Security as long as their suffering takes place. The Employer’s obligation is to maintain its registration at INSS otherwise the employer will have to assume all the expenses and the salary.
The Labor Code estipulate that the Overtime should be paid double and may not exceed nine hours per week. Any work before 6 AM or after 8 PM is considered overtime for a dayshift job. For night shift jobs the schedule is opposite and there is a 42 hours per week maximum. Combined jobs (both during daytime and nighttime) have a maximum of 45 hours per week.
# State minimum salary:
Nicaragua’s minimum wage is set for nine different economic sectors. The minimum wage ranges from 3,187.43 Nicaraguan córdobas a month in the agricultural sector to 7,133.44 córdobas a month in the financial sector. Nicaragua’s minimum wage was last changed in September 2015.
# Employee dismissal:
These are the ways to terminate an Agreement:
Fair Cause: When the worker has committed a serious offence as established in the Labor Code or in the Internal Rulings of the Company. This cause has to be approved by the Ministry of Labor according to the procedure established.
Without Fair Cause: The employer may dismiss an employee at any time and pay by law the indemnification established in article 45 of 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 is due.
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 dismissal.
The severance pay for workers should include vacation, seniority compensation. This compensation is paid by the employer. According to Nicaraguan law this compensation is as follows:
- One month salary for the first three years of work;
- 20 days of salary for the fourth, fifth and sixth year of work.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Nicaragua by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.