Country-specific labor laws create various obstacles for expanding international companies. Complying with standards that change between countries, states, and even municipalities is complex, and failing to do so can have consequences.
If you’re planning to expand your company to Bolivia, you don’t have to take on those responsibilities alone. As your Employer of Record, G-P can take the compliance risks off your shoulders. We have an in-country subsidiary and a network of lawyers and HR experts to support you through every aspect of hiring and managing your Bolivian team.
Hiring in Bolivia
In Bolivia, employers must register with the Ministry of Labour and social security entities. Businesses with a registered entity in Bolivia must employ a workforce that consists of at least 85 percent nationals. Failure to comply can result in sanctions.
When you use an employer of record for hiring, your company can establish a relationship with new hires and assign daily tasks while our team focuses on compliance.
Employment Contracts in Bolivia
Employers must submit a signed employment contract to the Ministry of Labor for approval. Under the labor law, the contract must be drafted in Spanish. It must include:
- The names of all parties involved.
- The employed party’s personal data.
- The nature of the employee’s position.
- The duration of the contract.
- The payment period, method, and amount of the worker’s salary.
- The employer’s strategy for measuring work (time, units of work, etc.).
- The place of work.
- The employee’s heir(s).
Other considerations regarding valid employment contracts are as follows:
- Collective employment contracts are acceptable.
- Under most circumstances, an employment contract must be indefinite.
- The regulations established by the General Labour Law are implied terms within employment contracts.
Working Hours in Bolivia
Male workers must not work more than 48 hours per week, and women have a 40-hour cap. Daytime working hours are 6 a.m. to 8 p.m. and working time per day is limited to eight hours. Employees may only work eight hours each day. Working hours for shift workers can be longer, so long as the average doesn’t exceed the maximum over a three-week period.
Hours worked between 8 p.m. and 6 a.m. qualify as night work. Employees may only work seven hours per night, and they must receive a 25 percent to 50 percent salary increase for hours worked during the night period. The scale of the salary increase should reflect the nature of work and the employee’s circumstances.
If a day shift is over five hours, workers must receive a break every two hours. Night workers may take a break after three and a half hours.
Employees must only work two hours of overtime per day. They’ll receive a 100 percent pay increase for those hours. The same increase applies to hours worked on public holidays. Employees must receive three times their usual salary for working on Sundays. Under some circumstances, management may grant one working day of leave instead.
High-ranked employees may abide by other standards when complying with traditional regulations is not possible.
Holidays in Bolivia
Employees in Bolivia observe several paid holidays:
- New Year’s Day
- Plurinational State Foundation Day
- Shrove Monday and Tuesday (Carnival)
- Good Friday
- Labour Day
- Corpus Christi
- Aymara New Year’s Day (Winter Solstice)
- Independence Day
- All Saints’ Day
- Christmas Day
- Local holidays
Vacation Days in Bolivia
Employees receive annual paid leave after one year. The amount of leave can worker can take depends on the uninterrupted duration of their employment:
- One to five years: 15 working days
- Five to 10 years: 20 working days
- Over 10 years: 30 working days
Bolivia Sick Leave
To qualify for paid sick leave, workers must provide a certificate proving their inability to work. They may receive assistance from short-term social security entities for injuries and illnesses.
Maternity/Paternity Leave in Bolivia
Women are entitled to 90 days of paid maternity leave. They should take 45 days before delivery and 45 days after birth. During the first year, mothers may take one hour per day to breastfeed. This time does not count against their two-hour rest period.
Pregnant workers and their spouses receive a prenatal subsidy starting in the fifth month of pregnancy and a nursing subsidy until their child’s first birthday. The employer pays both subsidies as monthly deliveries of nutritional and dairy products totaling one month’s minimum wage. Pregnant women and their spouses are also entitled to one month’s minimum wage upon the birth of their child.
Pregnant employees and their partners enjoy protection from dismissal for one year after having a child. Partners are also entitled to three days of paid leave for the birth of their child.
Adoptive parents are protected from termination for one year after the final decision. Adoptive parents may take up to two months of paid leave.
Health Insurance in Bolivia
Bolivia’s universal health care system allows workers to receive medical services at no cost. Under some circumstances, an employer may be responsible for reimbursing their employees for private health care. Many employers choose to pay for private health insurance for their workers.
Those payments are optional additions to compulsory social security contributions. Both employers and employees pay into short- and long-term social security. These benefits cover sick leave and pension funds. Employers must register every employee for social security within their first five days at work.
Special benefits are common. Employers may negotiate with candidates before drafting the terms in their employment contract.
Bonuses
Most employers must pay three compulsory bonuses each year:
- Prima (profit bonus): All workers receive an extra month’s salary. This bonus should not exceed 25 percent of the company’s profits. If it does, employees will get a prorated payment.
- Bono de Antigüedad (seniority bonus): Employees with more than two years of continuous service receive monthly bonuses on a progressive scale.
- Aguinaldo (Christmas bonus): Christmas bonuses must be filed on a separate payroll, and they’re not subject to social security withholdings and taxes. The Christmas bonus is a month’s salary paid at the year’s end. Employees who’ve worked less than a year will receive a prorated payment.
As of 2013, companies are required to pay their employees a second Christmas bonus so long as Bolivia’s GDP grew by at least 4.5% annually.
Termination/Severance in Bolivia
There is no mandatory notice period for termination in Bolivia. Employers have justification for termination if an employee:
- Intentionally damages equipment or products.
- Discloses industry secrets.
- Ignores hygiene or industrial security.
- Breaches the employment contract or the employer’s trust.
- Commits theft or robbery.
- Engages in misconduct, including assault and defamation in the workplace.
- Participates in mass abandonment.
If an employer ends an employment contract unlawfully, they must pay severance or reinstate the worker. Severance equals one month’s salary for every year of service, including the final, incomplete year. Employees who resign after three months are also entitled to severance.
Paying Taxes in Bolivia
Both Bolivian employees and international workers are subject to taxation for the income they earn working in-country.
Employers must withhold 13 percent of their workers’ salaries for income tax. Other withholdings include:
- Retirement contribution: 10 percent
- Common risk insurance: 1.71 percent
- Pension funds administrators’ commission: 0.5 percent
- Solidarity pensions contribution: 0.5 percent
Withholdings for the solidarity pension fund system follow a progressive bracket. Employers must withhold one percent of salaries over 13,000 BOB, five percent of salaries between 25,000 and 35,000, and 10 percent of salaries above 35,000 BOB.
Employers contribute to several funds without deducting them from employees’ income. These contributions are still measured against salaries, so all percentages are based on each employee’s salary. Employers must pay into:
- National health care funds: 10 percent
- Housing: 2 percent
- Institute of Professional Formation (INFOCAL): 1 percent
- Solidarity pension contribution: 3 percent
- Professional risk insurance: 1.71 percent
Why G-P
When your company expands with G-P, we handle international compliance for you. Our in-country experts and experienced legal team make managing your global workforce easy. Contact us today to learn more.