Latin America Collection

Nicaragua's current 400-article Labor Code became law in
October 1996, setting the workday at 8 hours and the workweek
at 48 (Article 51).
Extra hours cannot exceed 3 per day, or 9 per week (Article 58),
and salary must for extra hours is double the normal salary
(Article 62).
Nicaraguan companies are required to have no less than 90%
Nicaraguan employees, and must offer occasional training
workshops to contribute to the betterment of the labor force.
The extensive Labor Code details the obligations and rights of
employers and employees, details the formation and rights of
unions, and sets the rule of judicial procedures.
The Code has separate chapters and articles for the rights of
different labor groups, and different fields of work.
Before starting a business in Nicaragua, you are well advised to
consult a lawyer well versed in the Labor Code to teach you the
nuisances of the law.
The Labor Code is law, whether you are familiar with it or not.
Best to know than get burned by it later. Ignorance of the law is
not an excuse for violating it.
Below are highlights of the Labor Code:
Title I: General Dispositions
Obligations of Employers (Chapter IV, Article 17)
a) pay the salary for work done in a manner and time that is
convenient to the worker


b) don't blacklist workers
c) respect the dignity of workers; don't verbally mistreat them or
otherwise offend their dignity.
d) Provide workers with appropriate supplies and materials in a
timely manner
e) Don't take the worker's tools or equipment as a form of
indemnification
f) Don't allow work under the conditions of alcohol or drugs
g) Don't carry weapons or allow them to be carried in workplace,
except for instances where weapons are part of job (security)
h) Pay workers on time
i) Respect the rights of unions, and the right to form unions
j) Allow workers to appear before the courts when cited, without
docking pay
k) Respect the workweek, and post labor calendar in a visible
area
l) Provide work registries and labor files and other documents to
the Labor Ministry
m) Allow identified officials of the Labor Ministry access to your
work place
n) Allow Union leaders and advisors access to work zones and
pertinent information related to labor issues and conflicts
o) Comply with collective bargaining laws
p) Make sure employees' are not sexually harassed, violated or
otherwise morally compromised
q) In cases where workers need to be living on the grounds, or
travel from home is difficult due to high transportation costs,
give employees free board in safe lodging
r) Comply with all national and international labor regulations
Chapter V: Obligations of Workers (Article 18)
1) Carry out work in a way and timeframe convenient to the
employer


2) Comply with the work schedule, work hours and orders and
instructions of the employer
3) Endeavor to increase production and productivity
4) Behave respectfully to your employer
5) Guard with discretion all technical, trade and manufacturing
secrets of the company
6) Utilize company goods, resources and materials with care and
for what they were intended
7) Offer necessary help in instances of immediate risk of danger
to the interests of the company and its workers
8) Attend training courses convoked by employer
9) Comply with security measures and other measures to prevent
accidents on the job
10) Don't work under the influences of drugs or alcohol
11) Don't carry a weapon of any type during work, unless you
use said weapon for work
12) Don't submit to sexual advances or harassment by an
employer
Title II: Rights of the Worker
Articles 19-22 establish that contracts can be verbal (in the cases
of field work, domestic work or temporary labor less than 10
days) or written. Employees must be over 16 years old.
Article 41: Justification for termination of contract or
employee:
a) conclusion of work, project or service for which contract was
designed
b) death or permanent physical or mental disability
c) employee is sentenced to jail term
d) if business or industry folds for economic reasons that are
confirmed by the Labor Ministry
e) if business is closed by court order
f) contract is terminated by law
g) if employee retires


h) if some other event occurs that results in closure of business
Article 42: Whatever the reason for termination of worker's
contract, the employer is obligated by law to pay the part
corresponding to vacation days and 13th month (Christmas
bonus).
Article 44: Employees need to give 15 days notice before
resigning.
Article 45: If an employee is terminated without reason, he or
she is entitled to the following indemnification:
1) one month of salary for each of the first three years of
employment
2) 20 days of salary for each year of work after the fourth year of
employment
*In no case will indemnification be less than one month's salary,
or more than five month's salary.
Article 48: Employer can fire employee without indemnification
for the following reasons:
a) serious breach of integrity
b) serious violation against the lives or physical integrity of
employer or co-workers
c) injuries against employer resulting in economic damages to
business
d) any violation of contract obligations resulting in economic
damages to business.
Title III: Work Schedules, Vacations and Time Off
Article 50: "day work" is defined as between the hours 6am
­8pm. "Night work" is 8pm-6 am.
Article 51: Work schedules 8 hours a day, 48 hours a week.
Night work: 7 hour shifts, 42 hours a week. Mixed schedule
(day-night): 7.5-hour shifts, 42 hours a week.
Article 53: In hazardous work conditions, employees can only
work 6-hour shifts, no extra hours.


Article 58: Extra hours should not exceed 3 hours/day, 9 hours
a week.
Article 62: Extra hours and work on vacation days/Sundays pays
double the regular wage.
Article 64: For every six days of work, the seventh day is off
(Sunday)
Article 66: Vacation days are established as the following:
January 1
Holy Thursday and Friday
May 1
July 19
September 14, 15
December 8, 25
(If the vacation days fall on a Sunday, employees are credited
with another day off, or two half-days)
Article 67: Employees in Managua will also have vacation days
August 1 and 10. All other cities in the country have their patron
saint day off.
Article 73: Employees have the right to paid days off for the
following:
a) death of a mother, father, children, husband, wife (3 days off)
b) for marriage (5 days off)
Article 76: Workers have the right to a 15-day vacation for each
6 months of consecutive work. (this right is not lost if work is
interrupted by sickness, family death, etc..Article 79).
Title IV: Salaries
Article 85. All employees have right to minimum wage
Article 86: Payment of salaries must be paid at worksite
(forbidden to pay workers at bars, cantinas, etc. unless they work
there). Payment must be made in legal currency, not in kind or in
other tender. Worker must be paid in a no more than one week,
employees must be paid in no more than 15 days.


Article 93: All employees have the right to a 13th month salary
(Christmas bonus), after completing one full year working for
company. Workers who have less time at company, are paid 13th
month proportional to how long they have been employed. 13th
month payments must be made during first days of December.
Title V: Hygiene and Occupational Security
Article 114: When an employee is not covered by the Social
Security System, or has not been inscribed by employer, the
employer must pay indemnification in the event of death or
injury. (Art. 121: in case of death or permanent disability,
employer must pay employee/family 621 days of salary.)
Article 122: All worker injuries must be reported to the
Ministry of Labor in 24 hours or less.
Title VI: Rights of Child/ Adolescent Worker
Article 131: The minimum work age is 14
Article 133: It is prohibited to make adolescent or children
laborers work in unsafe or morally compromising jobs ( mines,
garbage dumps, night clubs, etc.)
Title VII: Rights of Women
Article 141: Pregnant women have the right to 4 weeks off
before giving birth, and 8 weeks off after (10 weeks in case of
multiple births). Women who miscarriage have right to time off.
Article 144: Women can't be fired for getting pregnant.
Title VIII: Special Labor Conditions: Domestic Employees
Article 146: Domestic workers have right to, in addition to their
salary, meals and lodging.
Article 147: Domestic workers have right to 12 hours/day of
rest, 8 at night. Right to rest on 7th day.
Article 148: The first 15 days of employment of domestic
worker are considered the trial date, during which time the
employee can be fired without reason.


Article 150: Domestic employees have right to Social Security,
or employers pick up the bill if they fail to inscribe employee.
Payroll Burden
Social Security ..................................................................15%
Vacations, annual bonus, paid holidays
and severance pay ..............................................................28%
Training (INATEC).............................................................2%
Total Cost .........................................................................48%
(note: Annual paid vacations per year: 1 month. Paid Holidays
per year: 10)
Labor Unions
Every citizen has the right to join or form a labor union, but
union membership is not a mandatory prerequisite for obtaining
any particular job.
Unions must have at least 20 members and be registered with the
Labor Ministry.
Union membership has declined in recent years, and the unions
are not as strong as they once were. Moreover, relations between
unions and management have been relatively smooth for several
years.
Strikes
Under the present labor code, workers may strike only after they
have exhausted other methods of conflict resolution, including
mediation by the Labor Ministry. If these requirements are not
fulfilled, the strike is considered illegal, in which case the
employer has the right to dismiss any employee who does not
return to work.
If the strike is legal ­ ie. all other options were exhausted ­ the
employer is forbidden to hire scabs, fire striking workers, or dock
them pay for the duration of the strike.


Collective Bargaining
Collective bargaining, a written agreement between employers
and employees, can only take place between an employer and a
union.
Unions
Labor unions must have at least 20 members and they must
register with the Ministry of Labor.
Unions have declined in number and strength since the end of
the Sandinista government in 1990.