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Insurance for your hired help: Workers Compensation, are you covered?


I recently came across an interesting article shining light on an often overlooked practice when it comes to hiring workers to perform basic work round the house or even acting as an independent contractor yourself. Because the Costa Rican legal system can often be a mix of red tape and often places blame on unknowing expats I thought it would be a good idea to go over the laws regarding medical insurance and more importantly workers comp.

The Facts

The law in its most basic form is very clear; every worker in Costa Rica is required to have not one, but two insurance policies.

  1. Caja Costarricense de Seguro Social, more commonly known as Caja.
  2. Riesgos de Trabajo or “workers compensation” that is held through the Instituto Nacional de Seguros (INS).

Where the confusion lies for most of us is the understanding of who is responsible for purchasing these policies. In most cases it is the employers that carry these policies for their employees but what about independent contractors?

Independents are responsible for purchasing this policy for themselves but as you can very well imagine this is not always the case. While most expats working as independents are just unfamiliar with the law, many Ticos would rather be paid under the table to avoid taxes and the possibility of a reduced pension.  While many of us can identify with this train of thought, the simple fact is that by paying under the table can open you up to potential headaches in the form of lawsuits or blackmail over being turned in the Costa Rican government. So how do you avoid this?

The Proper Way to pay

Staying within the law is actually easier than one would imagine with the only drawback being a noticeably decreased pool of workers to choose from. When hiring an independent contractor to clean your house, do lawn maintenance or any other job (especially if it is on a regular basis) you should always ask for a “riesgos de trabajo” (payment receipt) which will have the independents tax information and official business name on it.

What this does is provide proof that you hired a legal independent contractor that is paying taxes and is legally obligated to carry workers compensation on his or her own.


As you can imagine there are dozens of cases of homeowners and expats being burnt by this law, and even with this basic understanding it is a good idea to hire independents and employees with caution. To read more on the topic take look at the link below and if you have any questions, comments or experiences with the topic please post below.



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