Employment
I Was Fired: What Does My Employer Have to Pay Me?
Notice pay, severance, vacation, and the year-end bonus: what you are owed if you are fired with or without just cause, and how long you have to claim it.
Translated from the Spanish original. If there is any discrepancy between the two versions, the Spanish text prevails. Read the original in Spanish.
On a Friday afternoon, the human resources manager calls Laura into her office. After four years with the company, Laura is handed a letter: she has been fired. She is told that “what you are owed will be deposited,” but no one explains what that includes. The answer depends above all on one question: was there just cause for the dismissal?
Dismissal with or without employer liability?
The Labor Code (Código de Trabajo) distinguishes between two situations. If the employer dismisses a worker without a cause that justifies it, the dismissal is “with employer liability” (con responsabilidad patronal): the employer must pay notice and severance, in addition to the worker’s other entitlements (Articles 28 and 29).
If, on the other hand, the worker committed one of the offenses listed in Article 81, the dismissal is “without employer liability” and the employer pays neither notice nor severance (Article 82). These offenses include missing work without permission or justification for two consecutive days or more than two non-consecutive days in the same month, or committing a crime against the employer’s property.
Two rules protect the worker. When the dismissal is based on misconduct, the employer must hand the worker a letter that describes the facts in a specific and clear way, and only those facts may be argued later in court (Article 35). In addition, the employer has one month to dismiss for misconduct, counted from when it occurred or when the employer learned of it (Article 414).
What items must be paid?
- Notice pay (preaviso). In open-ended employment contracts, a dismissal must be announced in advance or paid in money: one week’s salary after three to six months of work, fifteen days after six months to a year, and one month after more than a year (Article 28).
- Severance pay (cesantía). This is compensation for length of service: seven days’ salary for three to six months of work, fourteen for six months to a year, and from 19.5 to 22 days for each year worked after that. There is a cap: no more than the last eight years are ever paid (Article 29).
- Unused vacation. It is always paid, whatever the reason for leaving (Article 156). If the worker did not complete the fifty weeks that earn vacation, they are entitled to at least one day for each month worked (Article 153).
- Prorated year-end bonus (aguinaldo). The aguinaldo is the additional salary paid in December. Anyone who leaves earlier is entitled to the portion for the time worked in the period, even when the dismissal was justified.
Notice and severance pay are calculated using the average salary for the last six months, and the employer cannot offset them against the worker’s debts. Only up to half may be garnished, and only to pay child or spousal support (Article 30).
Separately, the person may withdraw their Labor Capitalization Fund (Fondo de Capitalización Laboral), which is built from an employer contribution of 1.5% of salary. When the employment relationship ends, for any reason, the fund administrator must pay it out within fifteen days at most (Worker Protection Act, Ley de Protección al Trabajador, No. 7983, Articles 3 and 6).
What if I am the one who resigns?
A person who resigns by their own choice does not receive severance, but does receive their vacation and the prorated aguinaldo. They must also give notice or pay for it (Article 28), although the employer loses that right if it does not claim it within the following thirty days (Article 32).
Resigning because the employer failed to meet its obligations is different, for example, because it did not pay the full salary on the agreed date. Article 83 lists those grounds, and in those cases the person keeps the right to compensation (Article 84). To leave on those grounds, the worker has six months from when the breach occurred or when they learned of it (Article 416).
How long do I have to file a claim?
One year from the date the contract ended (Article 413). After that period, the rights are time-barred: they can no longer be enforced. The period is interrupted, among other ways, by requesting the dismissal letter or by requesting conciliation before the Ministry of Labor and Social Security (Ministerio de Trabajo y Seguridad Social) (same article).
Practical recommendations
- Ask for the dismissal letter and keep it. If you are not given one, request it in writing: that request also interrupts the period for filing a claim.
- Do not sign a final settlement without reviewing it. Compare each item with your average salary and your length of service before signing.
- Gather your evidence. Your contract, pay stubs, and contribution history with the Costa Rican Social Security Fund (Caja Costarricense de Seguro Social) prove your salary and the time you worked.
- Do not let the year go by. Conciliation before the Ministry of Labor is a good first step and stops the clock.
Need help?
A final settlement depends on your actual salary, overtime, and the reason for the dismissal. At Murillo y Guzmán we can review your case, estimate what you are owed, and represent you in negotiations or before the labor court. Book a consultation.
This article is for informational purposes only and does not constitute legal advice for any specific case. To discuss your situation, book a consultation.