Honduras
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
$ 7802 HNL per month
Labor Law
Laws that regulate Labor Relationship
Constitution of the Republic of Honduras, Labor code
Onboarding guide
- Contract requirements
- Types of contracts
- Probation Period
- Offer letter
- Digital signature
- Onboarding documents
Requirements for a labor contract
• Name, surname, age, etc.
• The designation of the services that the worker is obliged to pay for, or the nature of the work to be performed.
• The duration of the contract or the statement of indefiniteness and the date on which it is to commence.
• The place or places where the services are to be rendered or the work is to be performed.
• The time of the working day and the hours to be provided.
• The salary, profit, commission or participation to be received by the worker.”
Pre-hire Medical exam
No
Types of contracts
•Indefinite
•For a limited time up 2 months
•For work or services
Probation Period
The probation period is 60 days.
Are offer letters mandatory in the country?
Not Mandatory
Are digital signatures in labor contracts valid?
Not Permitted
Mandatory onboarding documents
• CV (Curriculum vitae)
• ID Card
• Proof of studies
• Previous work certificates
• Proof of criminal record
• Proof of police record
• Health card
• Vaccination card against Covid
• Proof of Address
• 4 personal references
Statutory benefits
Annual Bonus
It is mandatory to pay a 13th month bonus paid in December, and a 14th month bonus in July. Each bonus equal to one month’s salary or as a proportional allowance of the time worked.
Additional bonus
Mandatory a 14th month bonus in July. Each bonus equal to one month’s salary.
Leaves (medical, maternity, paternity, etc.)
• Maternity Leave: Female employees receive up to 10 weeks of maternity leave. Four weeks before birth. It is capped at 66% of their wages, averaged over the previous three months. They also received a paid leave of three months maximum in case of a pregnancy or delivery-related illness.
• Vacation Leave: Employees receive paid annual leave of 10 days after one year of employment, 12 days after two years of employment; 15 days after three years of employment; and 20 days after four or more years of employment.
• Sick Leave: Employees receive 66% of the last three months of income as paid sick leave for up to 26 weeks which can be extended to 52 weeks after a three-day observation period. In the event of hospitalization and there are no dependents, the rate falls to 50%. To qualify, employees must have at least two months of contributions in the previous four months.
Annual Leave (days per year)
An employee is entitled to annual paid leave, after each year of continuous work at the service of the same employer, with the following minimum duration:
• 1 year of employment, 10 days of paid leave
• 1-2 years of employment, 12 days of paid leave
• 2-3 years of employment, 15 days of paid leave
• 4+ years of employment, 20 days of paid leave
How do vacation days expire?
When the employment contract terminates before the time that entitles the employee to vacations, due to the employer.
Official Holidays
• January 01 New Year’s Day
• April 01 Maundy Thursday
• April 02 Good Friday
• April 03 Saturday of Glory
• April 14 Day of the americas
• May 01 International Labor Day
• September 15 Independence Day (Bicentennial)
• October 03 Soldiers’ Day
• October 12 Columbus Day
• October 21 Armed Forces Day
• December 25 Christmas Day
Working on holidays and Sundays
Paid at 100% extra on top of the regular wage.
Number of Working hours
8 hours a day, 44 hours a week.
The ordinary night workday shall not exceed 6 hours per day or 36 hours a week.
The ordinary mixed workday (mixed day and night schedules) shall not exceed 7 hours a day or 42 hours per week.
Overtime
Paid at 25% extra on the regular wage for day work and 50% extra for night work hours.
Social Security (what does it cover)
•Death
• Old age and disability
• Sickness
• Non-occupational accident
• Maternity
• Family, widow’s, widower’s and orphan’s benefits
•Social services, subject to special regulations.
• Forced unemployment due to legal causes or proven unemployment
Social Security Institute: The Honduran Social Security Institute (IHSS)
Payroll
Salary payment currency
Honduran Lempira (HNL)
Can salary be paid in a different currency other than the local currency?
Yes, USD
Payment frequency
Monthly
VAT percentage
15% is standard, 18% sale of first class airline tickets, importation or sale of alcoholic beverages, carbonated water and tobacco products.
Income Tax
The tax system in Honduras is based on a territorial concept of income. Citizens and residents are taxed on income earned from worldwide sources. Non-residents are taxed only on income from Honduran sources, and the tax on any type of income paid to a non-resident must be withheld by the payer. The rates varies from 0% to 25%. To see more information see https://taxsummaries.pwc.com/honduras/individual/taxes-on-personal-income
Tax Payer Identification Number
NIF / TIN
Offboarding
Voluntary resignation
If the employee resigns from his job voluntarily and for reasons not attributable to the employer. In this case, there is no severance payment, but there is payment of outstanding benefits.
Contract termination
The following are causes for the termination of employment contracts:
• Any of those stipulated in the contract if they are not contrary to the law;
• The mutual consent of the parties;
• Death of the worker or physical or mental disability that makes it impossible to fulfill the contract;
• Illness of the worker in the case provided by article 104 of the Labor Code;
• Loss of freedom of the worker in the case provided for in article 106 of the Labor Code;
• Fortuitous event or force majeure;
• Losing the trust of the employer the worker who performs a position of management, inspection or surveillance; such as butlers, foremen, having to justify in the judgment of the General Directorate of Labor, or its representatives, the reasons for such mistrust; more if he had been promoted from a rank position in the companies in which it exists, he will return to it, unless there is a justified reason for his dismissal, the same is observed when the worker who performs a position of trust requests to return to his old job ;
• The suspension of activities for more than one hundred and twenty (120) days in cases 1°, 3°, 4°, 5° and 6° of article 100 of the Labor Code;
• Liquidation or final closure of the company or establishment;
• Exercise of the powers granted to the parties by articles 112 and 114 of the Labor Code;
• Insolvency or bankruptcy;
• The prior notice of the parties;
• Termination of the contract decreed by the competent authority.
Justified Dismissal
A list of just causes which allow the employer to dismiss an employee which are related to the employee´s conduct or capacity:
• deceit by means of false letters of recommendation or certificates;
• acts of violence, indiscipline at work;
• deliberate material damages against the plant, machinery;
• acts of immorality;
• revealing manufacturing secrets;
• criminal conviction;
• unjustified absence from work without any justification for two consecutive working days, or a total of three days within the same months;
• repeated failure to adopt the preventive measures or to follow the proper procedure to avoid accidents at work and occupational diseases;
• incapacity or manifest inefficiency to fulfill the obligations under the contract;
• infectious disease or mental illness when the worker refuses treatment.
Article 112 LC
Unjustified Dismissal
According to article 120 LC unfair dismissal occurs when the employer can´t allege a justified cause -or prove the just cause at Court, if employee challenges it- (article 113) and when the employee terminates the employment agreement due to the employer´s gross misconduct – indirect dismissal- (article 114 LC). The LC is very strict in the definition of dismissal related to incapacity as it requires inefficiency to be manifest. In addition, individual redundancy is not a just cause for dismissal.
The employers can terminate a fix term contract with these reasons: business, personal, or workers misconduct. The notice should be written with the explanation of the termination. If the cause is misconduct, a warning needs to be given, and the employee gets a chance to explain actions. The employee holds the right to take an employer to court in the case of unlawful dismissal; the employer must then evidence that the termination was fair. If the employer fails to provide evidence of a lawful dismissal, the employee may be entitled to compensation. If termination is deemed wrongful and the employee is reinstated, the employer is not required to pay termination benefits.
If the employment contract for an indefinite period concludes due to unjustified dismissal, or for any of the causes provided for in article 114 of the Labor Code, or another beyond the control of the worker, the employer must pay him a severance pay in accordance with the following rules: • after continuous work of not less than three (3) months nor more than six (6), with an amount equal to ten (10) days of salary; • after continuous work greater than six (6) months but less than one (1) year, with an amount equal to twenty (20) days of salary; • after continuous work for more than one (1) year, with an amount equal to one (1) month of salary, for each year of work, and if the services do not reach one (1) year, proportionally to the term worked; • in no case the aid must not exceed eight (8) months’ salary; • the severance pay must be paid even if the worker immediately goes to serve under the orders of another employer; • The worker who, upon termination of his contract, is automatically protected by a retirement, old-age or retirement pension granted by the State or by the Honduran Institute of Social Security, whose current value is equivalent to or greater than that expressed, will not be entitled to unemployment benefits. Compensation for time served; nor when the worker is left, due to the fact of the dismissal, receiving the benefits of the insurance against involuntary unemployment of this last institution; or when, in the event of the death of the worker due to a professional risk, the employer demonstrates that he had insured him against said risk; or when the death of the worker occurs due to another cause and the deceased is protected against the risk of death in the mentioned institute.
Minimum Notice Period
The notice period is determined in accordance with the agreement of both parties in the employment contract. If the term is not agreed upon, the following applies according to the law:
•A 24-hour notice is needed if the employee has worked for less than three months
•A week’s notice is needed if the employee has worked more than three but fewer than six months
•A 2 weeks notice is needed if the employee has worked more than six months but less than a year
•A month notice is needed if the employee has worked more than one year but less than two years
•A 2 months notice is needed if the employee has worked more than two years
Immigration
Visa process
Requests for work visa procedures and residence card must be processed directly in Honduras at the NATIONAL INSTITUTE OF MIGRATION OF HONDURAS, located in Colonia
1. The candidate must gather all the required documents and send them to us
2. We submit the application to the Migration Institute with the required documentation
3. In the meantime, it is mandatory to renew the status of the foreign citizen.
4. After having the residence resolution, the worker will obtain his identification as a foreign resident, and finally the work card is processed.
Visa documents
• Photocopy of the Passport (complete)
• Proof of Criminal Records in Honduras (applicants over 18 years old)
• Medical certificate
• 6×5 cm photograph