Guide to employment, payroll and benefits in

Nicaragua

Rivermate offers complete payroll, benefits and compliance services for

Nicaragua

01. Overview

Last updated: 

August 19, 2021

Currency
Nicaraguan CÓrdoba
Capital
Managua
Ease of doing business
54.4
Language
Spanish
Population
6624554
GDP growth
4.86%

02. Grow your team in

Nicaragua

with Rivermate

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

Nicaragua

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

Nicaragua

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

Nicaragua is the largest nation in the Central American isthmus, bordered to the northwest by Honduras, to the east by the Caribbean, to the south by Costa Rica, and to the southwest by the Pacific Ocean. Managua is the country's capital and largest city, as well as Central America's third-largest city, after Tegucigalpa and Guatemala City. People of indigenous, European, African, and Asian ancestry make up the six-million-strong multi-ethnic community. The primary language spoken is Spanish. The Mosquito Coast's indigenous tribes speak their own languages as well as English. The area, which had been populated by various indigenous cultures since antiquity, was conquered by the Spanish Empire in the sixteenth century. In 1821, Nicaragua declared independence from Spain. The Mosquito Coast, on the other hand, took a different course in history, being colonized by the English in the 17th century and later falling under British rule. In 1860, it became a Nicaraguan autonomous zone, and in 1960, the northernmost portion was passed to Honduras. Nicaragua has experienced civil instability, dictatorship, occupation, and fiscal crisis since its independence, including the Nicaraguan Revolution in the 1960s and 1970s and the Contra War in the 1980s. The blending of cultural traditions has resulted in significant diversity in folklore, cuisine, music, and literature, especially the latter, thanks to Nicaraguan poets and writers like Rubén Daro. Nicaragua, also known as the "Land of Lakes and Volcanoes," is home to the Americas' second-largest rainforest. Nicaragua is becoming a more popular tourist destination due to its biological diversity, mild tropical climate, and active volcanoes.

04. Public holidays

05. Types of leave

Paid time off

Employees who have worked for at least six months to a year are eligible to 15 days of paid vacation. The employee is entitled to 30 days of paid leave after one year of service.

Public holidays

Nicaragua recognizes nine public holidays.

Sick days

Sick leave is paid starting on the third day of illness and is covered by social security for up to six months. Sick pay is equal to 60 percent of regular pay.The three-day waiting period is waived if the employee is hospitalized.

Maternity leave

Maternity leave lasts 12 weeks and is compensated at 100% of regular pay, with the employer covering 60% and social security covering 40%. Maternity leave can start four weeks before the due date.Maternity leave is extended to 14 weeks for multiple newborns.

Paternity leave

Fathers are entitled to 5 days of paid leave each year.

Parental leave

In Nicaragua, there is no such thing as a parental leave law.

Other leave

06. Employment termination

Termination process

Employers must submit a termination request to the labor inspection department. The employee is entitled to any remaining vacation money and their annual bonus at the time of termination. Termination notice is also required.

Notice period

Employees must provide 15 days notice.

Severance pay

When an employee is terminated for cause, the employer is required to pay severance. Severance pay is calculated at one month's salary for the first three years of employment and at twenty additional days of pay for each subsequent year. Severance pay is limited to five months.

Probation period

There is a 30-day probationary period during which time either party may terminate the employment agreement for any reason.

07. Working hours

General

The standard workweek is 48 hours and eight hours per day for work performed between 6 a.m. and 8 p.m. Nighttime work, defined as work performed between the hours of 8 p.m. and 6 a.m., cannot exceed 42 hours per week or seven hours per day. Working a combination of day and night shifts is limited to 45 hours per week and seven and a half hours per day. Nighttime work is defined as a mixed workday that includes more than three and a half hours of nighttime work. The Ministry of Labor prohibits work that is classified as dangerous or unhealthy from exceeding six hours per day.


After six days of continuous service, employees are entitled to one day of rest. Generally, this occurs on Sunday, but there are exceptions. Additionally, employees are entitled to a half-hour break during the workday, which is considered effective work time.

Overtime

Overtime work is permitted for a maximum of nine hours per week and three hours per day and is compensated at 100% of the standard rate. Employees who work on a rest day or on a public holiday are also compensated at 100% above the standard rate.


Female employees who are six months or more pregnant are not permitted to work at night.

08. Minimum wage

General

Nicaragua has no national minimum wage. Instead, the country's compensation rules provide a minimum salary that applies to all nine economic sectors. Workers in the agricultural industry, for example, must earn at least 4,414.91 Nicaraguan córdobas per month as of March 1st, 2021, while people in the financial sector must earn at least 9,880.17 Nicaraguan córdobas per month.

09. Employee benefits

General

Nicaragua features a hybrid public-private health-care system. The government pays for the majority of regular visits. While there is no private insurance as in the United States, the main hospitals provide a program that functions similarly to insurance.

Pensions, supplemental health insurance, life and disability insurance, discounts at corporate shops, transportation allowances, and food allowances are all common employee perks.

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

Establishing an entity in

Nicaragua

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

Nicaragua

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

Nicaragua

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

Nicaragua

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

Nicaragua

via our Employer of Record / PEO solution.

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