Guide to employment, payroll and benefits in

Honduras

Rivermate offers complete payroll, benefits and compliance services for

Honduras

01. Overview

Last updated: 

August 19, 2021

Currency
Honduran Lempira
Capital
Tegucigalpa
Ease of doing business
56.3
Language
Spanish
Population
9904607
GDP growth
4.79%

02. Grow your team in

Honduras

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Honduras

, particularly if you don't have established local relationships. You can hire employees in

Honduras

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Honduras is a Central American country whose official name is the Republic of Honduras. Honduras is bordered on the west by Guatemala, on the southwest by El Salvador, on the southeast by Nicaragua, on the south by the Pacific Ocean at the Gulf of Fonseca, and on the north by the Caribbean Sea's Gulf of Honduras. Before the Spanish colonization in the sixteenth century, Honduras was home to many significant Mesoamerican cultures, most notably the Maya. The Spanish brought Roman Catholicism and the now-dominant Spanish language, as well as a slew of practices that have become ingrained in the indigenous community. Honduras gained independence in 1821 and has been a republic ever since, despite the fact that it has long been a source of civil unrest and political turmoil, and it is also one of the poorest countries in the Western Hemisphere. The International Court of Justice moved the northern section of what was the Mosquito Coast from Nicaragua to Honduras in 1960. The country's economy is largely agricultural, rendering it particularly vulnerable to natural disasters such as Hurricane Mitch in 1998. The lower class is mostly rural, while wealth is concentrated in the country's urban areas. Honduras has a Human Development Index of 0.625, indicating that it is a medium-developed nation. The Inequality-based Human Development Index for Honduras is 0.443 when the Index is adjusted for income inequality. Honduran culture is overwhelmingly Mestizo, but American Indian, black, and white people still live there. Honduras covers 112,492 km2 and has a population of over 9 million people. It had relatively high political stability until its 2009 coup and again with the 2017 presidential election. Its northern parts are part of the western Caribbean zone, as evidenced by the demographics and culture of the area. Honduras is known for its abundant natural resources, which include minerals, coffee, tropical fruit, and sugar cane, as well as a burgeoning textile industry that caters to the international market.

04. Public holidays

05. Types of leave

Paid time off

Paid leave is determined by the duration of service:10 days for up to a year of work12 days after 1-2 years of work15 days after 2-3 years of work20 days after 4+ years of workThe employee is therefore entitled to overtime time, which must be paid out at least three days prior to the start of the leave.

Public holidays

Honduras recognizes eleven public holidays.

Sick days

Sick leave is granted starting on the third day of illness. Employees are entitled to up to 26 weeks of maternity days each year, which can be increased to 52 weeks if necessary. If the person is ill and has no dependents, pay is 66 percent of the prior three-month total or 100 percent. The contractor and social security are also paid equally.

Maternity leave

Mothers are entitled to ten weeks of fully paid leave, with the company and the IHSS covering a portion of the wage. Pre-delivery leave should be 4 weeks, and post-delivery leave should be 6 weeks.

Paternity leave

Honduras currently has no statutory laws regarding paternity leave.

Parental leave

Honduras currently has no statutory laws regarding parental leave.

Other leave

06. Employment termination

Termination process

The termination method is determined by whether it is a case of just cause dismissal or wrongful dismissal.


Dismissal for cause is effective from the time the company tells the employee; nevertheless, the employee has the right to sue the employer and ask them to present evidence that their dismissal was justified. If the employer cannot establish grounds for dismissal, the employee is entitled to recover damages and losses, as well as accrued unpaid pay. Additionally, the employee has the right to bring a claim against the company and be reinstated.


If an employer is found to have terminated an employee in error and the employee is reinstated, the firm is not compelled to pay termination benefits.

Notice period

The length of employment determines the notice period. There will be a 24-hour notice period if the employment is for less than three months. The notice period is one week for jobs lasting three to six months. The notice period is two weeks for employment of more than six months but less than a year. The notice period is one month for employees who have worked for one to two years. The notice period is two months for employees who have worked for more than a year.

Severance pay

There is no severance payout entitlement for employees who were terminated for cause. Employees who are dismissed without cause or who are dismissed indirectly (due to the employee's failure to pay wages on time) are entitled to severance pay based on their length of work. For the first three months of employment, severance pay is equal to ten days' income. Severance pay is equal to 20 days' earnings for employees who have worked for six months to one year. Severance pay is one month's income for each year of employment, up to a maximum of 25 months.

Probation period

There is no statutory probationary period in Honduras.

07. Working hours

General

The standard work week is 44 hours, divided into six days of eight hours each. Managerial and supervisory employees, on the other hand, may work up to 12 hours per day.

Overtime

Nighttime hours are limited to between 7 p.m. and 5 a.m. and are limited to 36 hours per week, six hours per day. Shifts combining day and night work are limited to 42 hours per week, or seven hours per day. 14 to 16-year-olds may work up to four hours per day, while 16 to 18-year-olds may work up to six hours per day. Their workweek is limited to 36 hours, and those under the age of 16 are not permitted to work overtime.


Female employees and employees between the ages of 14 and 18 are entitled to a two-hour rest period during the workday. Sundays are designated as a rest day for employees. Those who work on Sunday are compensated with an additional rest day. Employers compensate employees for public holidays that fall on Sundays with standard pay plus the overtime rate.


A typical workday, including overtime, is limited to 12 hours, and employees are permitted to work overtime only four times per week. Overtime pay is calculated at 137.5 percent of the regular rate of pay. The pay rate for work on a rest day is 200 percent of the regular rate. The pay rate for night work is 125 percent of the regular rate.

08. Minimum wage

General

The minimum wage in Honduras varies by industry and employee count. As of 2021, the minimum monthly wage for an agricultural employee working for a company with one to ten employees is 6,762.70 lempiras. The minimum wage rate for an employee working in manufacturing for a company of similar size is 9,068.81 lempiras. Additionally, a collective bargaining agreement (CBA) or labor union may have its own set of laws to follow.

09. Employee benefits

General

The Honduran Health Insurance system ensures that people have access to health care benefits and services. Contributions at the following monthly wage rate are used to fund the service:

Employee: 2.5% of monthly wage

Employer: 5% of the employee’s monthly wage

Government: 0.5% of the employee’s monthly wage

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Honduras

to hire a team takes time, money, and effort. The labor law in

Honduras

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Honduras

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Honduras

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Honduras

via our Employer of Record / PEO solution.

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