What is a labor company?
A labor company is defined as a community of workers who have united efforts and capital to start a business. They are recognized as formal companies given that:
- They have their own Legal Entity Identifier number (LEI).
- They hire workplace risk insurance with the INS.
- They are registered taxpayers with the Tax Administration.
- They insure their workers through a collective independent worker insurance with the Costa Rican Social Security Fund (CCSS).
- They are hired by companies to provide services, commercialize products, carry out manufacturing processes, or any other legal activity.
Tax Benefit
These companies receive the tax benefit of exemption from the employer contribution tax because there is no employer-employee relationship within the community of workers. Additionally, they are governed by their own Statutes and Internal Operating Regulations, allowing them to establish benefits such as:
- Rest periods.
- Christmas bonus.
- Mutuality fund in case of withdrawal.
- Disciplinary processes in line with their reality and proper functioning.
Types of Worker Communities in Costa Rica
In Costa Rica, four types of worker communities can legally be formed with a LEI number:
- Self-Management Cooperatives
- Limited Labour Companies (SALES)
- Professional Activity Societies
- Associations of Independent Workers
Requirements for Employer Contribution Tax Exemption
To obtain the exemption from the employer contribution tax, it is not only necessary for the worker community to be legally organized, but it must also meet the following four outsourcing or subcontracting requirements with its clients:
- Management: Salary management, benefits, and penalties.
- Remuneration: Payroll, insurance, and technical training.
- Rate: Charges for outsourced services to two or more clients.
- Specialty: Performing tasks with their own tools.
Conflict Resolution
The Internal Operating Regulations of the worker community may establish, as an alternative conflict resolution measure for disciplinary processes, expulsions, and conflicts among workers, their administration, and contracting clients, the RAC Law. This law allows recourse to conciliation and arbitration centers instead of the judicial route.