January 14, 2019
Cristhian Monge Arce / firstname.lastname@example.org
Partner BDS Asesores
As a new year begins it is common for us to set a number of resolutions. By the end of 2019, some of them may be accomplished, while for others we should try our best in 2020. However, if some of these resolutions involve some urgent topics, it would seem inconvenient to postpone them.
As for labor law matters, the above described scenario works exactly the same for companies. This is why it is key to ponder on the past year and the experiences we lived in order to draft a list of resolutions addressing urgent and imperative matters that we should also be able to solve in a fast and secure manner.
Taking into consideration how lawsuits behaved over the past year, as well as the inspection procedures by the MTSS and the CCSS, we would recommend 7 resolutions for this 2019 on labor legal matters:
Resolution No. 1. Review the documentation in connection with employment contracts. Essential conditions of employment relationships should be developed under the relevant contract. Otherwise, we would face doubts regarding said conditions (salary and non-salary benefits, work shift, work schedule, place where services are rendered, job duties, among others).
Although these aspects may be covered by other types of documents, the lack of an employment contract might pose a risk before the MTSS and the employee.
Resolution No. 2. Fill your regulatory gaps. If during 2018 you received complaints from employees relative to labor rights or benefits that were not clearly defined (commissions, vacation time, overtime, leaves of absence, permits), you should take time to consider which areas should be further regulated.
Ponder your pros and cons regarding the use of certain types of internal regulations, whether policies, procedures, communications or internal standards. Remember that an improper regulation is the first issue that may work against your company in case of a judicial or administrative claim.
Resolution No. 3. Perform a thorough internal review. As with any visit to the doctor where we are asked to undergo some general check-ups, you should perform an analysis in your company regarding labor law compliance.
Validate your procedures and policies and verify the degree of training of your employer representatives in terms of how legal issues are handled, for instance on disciplinary and discrimination matters.
The fact that your company has not yet faced a judicial or administrative procedure does not necessarily mean that everything is alright, but that there is a latent threat that may materialize at any time.
Resolution No. 4. Update your company’s internal regulations. Remember that there are benefits that might become vested rights for your workers if these have not been limited time-wise; also, some areas regulated by your company may no longer be effective as a result of any amendments to laws or regulations at a national level.
Resolution No. 5. Take precautions on collective labor matters. 2018 made it clear that the topic of unions and strike movements was extremely relevant in our country. This is why we should ask ourselves what would happen in the event of a strike movement in my company? What should I do to avoid a strike?
Resolution No. 6. Protect your company from discrimination issues. This is not a myth, it is a reality. The number of ongoing judicial procedures involving claims submitted as a result of alleged discriminatory actions exponentially increased last year. A number of specific measures may help your company avoid its involvement in these procedures and face the payment of expensive compensations imposed by court decisions.
This is why we would recommend training your staff and verifying if your company is directly or indirectly involved in discriminatory practices.
Resolution No. 7. Assess your compensation scheme. Today more than ever, if your company is not clear on which benefits should be handled as salary and which doesn’t, you may be exposed to an unpleasant experience when dealing with the CCSS and the tax authorities. Thus, it is advisable to verify if your compensation scheme allows your company to remain competitive while also abiding by current regulations and the relevant obligations before the social security administration and tax authorities.