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New Bill: Independent Worker Law

The Executive Power included within the call to Extraordinary Assemblies of the Legislative Assembly the bill of the Independent Worker Law, this bill intends to insure independent workers. This bill defines an independent worker as: “the natural person who habitually, personally and directly renders his services, for profit, without any labor relationship under the terms of the Labor Code”.

The initiatives of this bill are as follows:

  1. That at present there are no adequate rules to regulate the payment of social security contributions of self-employed workers since the criteria used to determine them are arbitrary and subject to constant regulatory changes.
  2. That self-employed workers pay extremely high contributions with respect to salaried workers, despite the fact that both have the same rights according to the Constitution, principles, and laws on social security.
  3. That the Constitutional Chamber, whose jurisprudence is binding erga omnes according to Article 13. of the Law of Constitutional Jurisdiction, has established that social security contributions are parafiscal in nature. Therefore, the regulation of the collection and payment of such contributions must be governed by the principles of Tax Law.

Self-employed workers will have the same rights and benefits as salaried workers and will be subject to compliance with identical requirements and qualification terms, which may be enjoyed as from the date on which the requirements established for each benefit have been complied with after the application, and the quotas have been paid, as applicable. All in accordance with the provisions of the regulations and general instructions approved by the Costa Rican Social Security Fund (CCSS, for its acronym in Spanish). The workers will have the possibility to reinstate, retroactively and unlimitedly, the omitted values and quotas, after the full reinstatement of the updated value of the debt with the Fund, which will be fixed by the Costa Rican Social Security Fund according to the rules determined by the Board of Directors.

One of the most important factors of this bill is the statute of limitations established. A term of four years is established for obligations of independent workers, the extinctive prescription can be declared administratively. The possibility is introduced for the interested party to declare the statute of limitations in administrative proceedings, currently the defendants must wait for the exhaustion of administrative proceedings and the continuation of the process in judicial proceedings to be able to oppose the statute of limitations.

All self-employed workers are obliged to contribute to the Health Insurance and to the Disability, Old Age and Death Insurance, under the same conditions as salaried workers, except as provided herein.

Obligations of the self-employed worker:

  1. To register before the Costa Rican Social Security Fund within eight working days after the beginning of his/her activity.
  2. To present an estimate of the net income that he/she expects to obtain between the date of registration and the following date of self-assessment declaration of net income. If for any other reason it is not possible to make such an estimate, the taxable base will be the minimum reference income established by the Board of Directors of the Costa Rican Social Security Fund.
  3. Provide the CCSS with a monthly self-assessment and truthful statement of the total net income received, on which the contributory contribution will be calculated.

Mariela Saborío
García & Bodán
Costa Rica