Overtime can be an effective tool for employers to address operational needs and unforeseen circumstances without compromising the company’s continuity or productivity. However, applying it outside the legal framework or in an abusive manner may lead to labor disputes, financial penalties, and significant damage to the company’s reputation. For this reason, it is essential that employers know, respect, and carefully apply the legal provisions regulating overtime, thus ensuring a fair, efficient, and lawful work environment.
What is Overtime under Costa Rican Law?
Article 139 of the Labor Code establishes that any work performed beyond the limits set out in articles 135 and 136 of the same statute for the ordinary workday constitutes an extraordinary workday. This is likewise established in article 58 of the Political Constitution. Therefore, this additional payment is neither optional nor negotiable.
Legal Guidelines for Managing Overtime
Below are the main considerations, safeguards, and obligations regarding overtime:
a) Payment of overtime through compensation, whether with time off or any mechanism other than monetary remuneration, does not constitute lawful compensation, regardless of whether or not the worker has objected.
b) As a rule, overtime is not mandatory. The employer cannot impose it unilaterally, nor is the worker obliged to accept it. For it to be valid and payable, there must be a prior agreement between both parties. Only in exceptional cases such as force majeure or imminent risk may the employer require it without consent. Although the Second Chamber of the Supreme Court of Justice has recognized a worker’s “duty of cooperation,” this does not eliminate the need for justification and proportionality in requiring overtime.
c) The total workday cannot exceed 12 hours per day, combining both ordinary and extraordinary hours. Only in exceptional cases such as disasters or imminent risks threatening people, facilities, machinery, crops, or products may this limit be surpassed, and only when it is not possible to suspend work or replace personnel without causing evident harm.
d) In hazardous or unhealthy work, overtime is prohibited due to the risks it poses to the worker’s health. The declaration of a job as hazardous or unhealthy can only be issued by the Occupational Health Council of the Ministry of Labor and Social Security.
e) The time a worker spends correcting mistakes made during their ordinary workday is not considered overtime. This means that if a worker stays longer to remedy errors attributable solely to them, they are not entitled to additional pay for that time.
f) The employer is legally required to keep an accurate and verifiable record of hours worked. This record must be reflected in payrolls and pay slips, clearly distinguishing between ordinary and extraordinary hours. Failing to keep such records not only violates the law but also exposes the employer to sanctions from the Ministry of Labor and facilitates judicial claims by workers.
g) Overtime pay must be calculated based on the worker’s actual salary, which must always equal or exceed the minimum wage (proportionally in part-time schedules), if the worker earns more. The calculation must also reflect the salary in effect at the time the overtime was worked. Failure to properly pay overtime may result in late-payment interest, fines, and reputational damage.
h) The Second Chamber has established that the burden of proof in overtime cases varies depending on the nature of the situation. When it comes to exceptional situations, the worker must prove that the hours were actually worked. However, if overtime is habitual or systematic, the responsibility shifts to the employer, who is obligated and has the means to keep an accurate record of the workday.
i) If the worker remains at the workplace engaging in activities unrelated to their duties, they are not entitled to additional pay for that time. Only time effectively dedicated to work-related tasks, within or beyond the ordinary workday, is remunerated.
Best Practices for Managing Overtime
In addition to complying with the law and taking into account the considerations outlined above, the following practices are recommended:
- Plan shifts in advance to avoid constant reliance on overtime.
- Train administrative staff on labor law and payroll management.
- Promote transparency in communications with workers regarding their schedules and pay (including the design and content of the pay slip provided to them).
- Establish an internal procedure for authorizing and validating overtime pay.
Properly managing overtime not only prevents sanctions and disputes but also protects the company’s reputation and ensures operational sustainability.
At Bufete Godínez y Asociados, we are leaders in business consulting for labor law in Costa Rica. Our team of labor law specialists is ready to provide top-tier legal support for managing and resolving your company's labor matters. If you need personalized legal guidance to ensure compliance with labor regulations or to address disputes, we are here to help. Click here to learn more and schedule a consultation with our labor law experts.
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