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Honduras

How to Hire Workers in Honduras | Employer of Record (EOR) in Honduras

Complying with Honduras' labor laws and regulations is effortless with TCWGlobal's Employer of Record (EOR) services. We handle all employment aspects, such as payroll and benefits, ensuring compliance and efficiency. Our dedicated team supports your business needs specifically in Honduras. Expand into the Honduran market with confidence, knowing TCWGlobal is your trusted partner for employment management.
 
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Honduras offers significant business opportunities with its growing economy. TCWGlobal's Employer of Record (EOR) services in Honduras streamline hiring and workforce management, ensuring compliance with local labor laws. With a population of over 10 million, Honduras has a diverse and industrious labor force. Our EOR services encompass payroll management, benefits administration, and comprehensive HR support, tailored to your business needs. Partner with TCWGlobal to confidently grow your business in Honduras, leveraging our expertise in local employment laws and efficient workforce management.

Worker Classifications

Full-time worker or a contractor can be classifies using the following parameters: nature of work, level of control over the performance, how companies will compensate their global team, workers’ contribution toward the company goals and objectives.

Fixed-Term Contracts

The labor law in Honduras generally limits the duration of fixed-term contracts to 12 months. If the work requires technical preparation that may spread over a longer period, the maximum duration is 60 months. A fixed-term contract can be renewed for up to 24 months. Companies are prohibited from hiring workers under a fixed-term contract for tasks of permanent nature.

Probationary Periods

The duration of the probationary period must not exceed 60 days. The exact period must be stipulated in writing and included in the workers' contract. When the trial period is agreed for a period shorter than the maximum limit of 60 days, the parties can extend it before the originally stipulated period expires without the total time of probation exceeding 60 days. Workers on probation enjoy all the same rights as permanent workers, except for notice period and severance rights. During probationary period, either party can terminate the contract immediately.

Holidays

There are 11 National Holidays in Honduras. Workers are entitled to a minimum of 10 paid holiday days after one year of work. If one of these holidays falls on Saturday or Sunday, then the holiday is moved to the following Monday.
 
 

Vacation

Vacation or Annual Leave Quota is at least 10 days. Workers are entitled to paid vacation, at least 10 days per year. However, the number of vacation days grows with seniority, so workers with more years of service at the company have more days.
 
 

Sick Leave

Workers are entitled to paid sick leave in the case of temporary disability or sickness that resulted from an occupational accident. Paid sick leave is offered at a rate of two paid sick days per month for the first 12 months of engagement and four paid sick days per month after the first 12 months, up to 120 paid sick days.

Working Hours

Standard working hours in Honduras are 8 hours per day or 44 hours per week. Sunday is a holiday throughout the country. Workers can work for a maximum of 6 days in a week.
 
 

Overtime

Overtime pay is calculated to be 137.5% of the regular pay. Workers who work night shifts are to be paid at 125% of the regular pay. Those working on a Sunday or rest day are entitled to pay at 200% of the regular pay.
 
 

Mandatory Bonuses

Honduran law mandates a mandatory bonus payment, the13th month pay, to workers, equivalent to one additional month's salary, typically paid in December.
 
 

Termination

Companies are required to give a written dismissal notice indicating the cause for termination. If the contract is oral, notice can be given verbally before 2 witnesses. The length of the notice period differs depending on the worker’s length of service. 24 hours' notice must be given to the worker for service of fewer than 3 months. One week of notice for service between 3 and 6 months, 2 weeks of notice for service between 6 and 12 months. One month’s notice for service between 1-2 years. Two months of notice for service of more than 2 years. Said notices can be omitted by any of the parties paying the other the corresponding amount.

Resignation

For workers who have served less than 3 months, a notice period of 24 hours is required. For those who have served between 3 to 6 months, a notice period of one week is mandated. Workers who have served between 6 to 12 months require a notice period of 2 weeks. A notice period of 1 month is required for workers who have served between 1 to 2 years. For workers who have served over 2 years, a notice period of 2 months is required. Worker who are voluntarily resigning typically need to provide less notice, although the specifics may be outlined in their contract.

Other End of Employment Rules

The notice period specified in the worker's contract may override the minimum legal requirements, as long as it provides equal or greater benefits to the worker. If a company does not provide the legally mandated notice period, they are required to pay the worker their full wages for the notice period they did not receive.

Unique Country Nuances

Companies need to pay 13th and 14th salaries to workers. Each of these is equal to a full-month salary. These are paid in December and July. Companies need to pay the following taxes, Sickness and maternity, Disability, old age, death, Professional Risk Contribution, Private Contribution Regime – Social Housing Fund, Labor Reserve Contribution.

Mandatory Employer Costs

Companies are required to contribute 3.5% and 4% of wages to the national social security program and the unemployment fund respectively.
Honduras' income tax is progressive, with rates ranging from 0% to 25% depending on income level. The corporate tax in Honduras is 25%.

Benefits

Many companies choose to offer their workers a benefits package that includes additional pension contributions, company car allowances, paid time off, holiday bonuses, sick leaves, maternity leave, life insurance, disability insurance, profit sharing, private health insurance, flexible work arrangements, childcare assistance and wellness programs. Social security contributions are mandatory for both companies and workers. Besides leaves and social security, Honduran labor law mandates other benefits for workers such as national minimum wage, which varies depending on the industry and geographic location. Overtime Pay, work exceeding the standard 44-hour workweek necessitates overtime pay at a premium rate. Notice period, both companies and workers are required to provide a notice period before termination with the length depending on the duration of engagement. Under certain circumstances, such as termination without cause, workers may be entitled to severance pay. Honduran law mandates a mandatory bonus payment to workers, equivalent to one additional month's salary, typically paid in December.

Leave

Annual Leave (vacation), after the first year, workers receive 10 days of paid vacation, increasing to 20 days after 4 years with the same company. There are 11 official public holidays in Honduras. Workers are entitled to up to 26 weeks of paid sick leave per year, with the possibility of an extension to 52 weeks after a three-day observation period by a healthcare professional. Pay during sick leave is shared between the company and social security, with the amount depending on hospitalization and dependents. Female workers are entitled to 12 weeks (84 days) of maternity leave, divided into 42 days before the expected due date and 42 days after childbirth. During this period, they receive 100% of their average wages from the previous three months.

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