Table of Contents

Honduras

Table of Contents

Currency

Honduran Lempira (HNL)

Payroll Frequency

Monthly

Employer Taxes

16.6%

About Honduras

A country in Central America, Honduras is bordered by Guatemala and El Salvador. Colonized by Spain in the 16th century, Roman Catholicism and indigenous customs blended over the years to create their current culture. Ethnic groups are primarily Mestizo, along with a smattering of Amerindian, blacks and whites. It is also one of the poorest nations in Central America, relying primarily on agriculture for its economy. Honduras is unfortunately also beset by corruption, a military regime, crime, and poverty, making it one most politically unsteady nations in Central America. Honduran culture includes renowned painters such as Velásquez and a popular cuisine that is a mix of several different influences from Europe and Africa.

Employment Relationship

• Permanent Employment

Under the Labor Code of Honduras, a contract is considered to be for permanent (indefinite) employment when it does not specify a date of termination. Agreements related to tasks that by their nature are permanent or continuous in the company are considered permanent (indefinite) even if the terms contain a termination date. Such contracts can be terminated anytime by either party by giving a notice to the other party.

• Fixed-Term or Specific-Purpose Contracts

In Honduras, the labor law 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. All fixed-term contracts are subject to express or tacit extension (where the worker continues to provide his services without opposition from the employer). Fixed-term contracts are defined as contracts for a limited-term, where a date is specified for termination or when the occurrence of some fact or circumstance has been foreseen like the construction of a work, which must necessarily terminate the employment relationship. The Labor Code prohibits employers from hiring workers under a fixed-term contract for tasks of permanent nature.

• Temporary Employment Contratcs

The Labor Code of Honduras defines temporary employment as work performed under a contract with an end date or work that is performed for a specific project that is not permanent by nature. The law does not contain statutory regulations covering temporary employment agencies.

Probationary Period

In Honduras, the probationary or trial period may be used for both parties to assess the appropriateness of an employment relationship. The duration of the probationary period must not exceed 60 days. The exact period must be stipulated in writing and included in the employment 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.  Employees on probation enjoy all the same rights as permanent employees, except for notice period and severance rights. During probationary period, either party can terminate the contract immediately. 

Working Hours

The Honduran Labor Code sets the standard workday at 8 hours and the standard workweek at 44 hours for daytime work (36 hours for night work). Employees are paid 48 hours per week of salary.  Employees working greater than these standard hours must be paid overtime.  The Labor Code defines daytime work as any work performed between 5:00 AM and 7:00 PM and night work as work performed between 7:00 PM and 5:00 AM. In the case of mixed workdays that include both daytime and night work, the night work hours may not exceed 3, otherwise, it will be considered a night shift. A mixed day can be a maximum of 7 hours, and a mixed week cannot exceed 42 working hours.

Holidays / PTO

• Statutory Holidays

New Year’s Day – January 1 Day of the Americas – April 14 Holy Thursday – April 17 Good Friday – April 18 Easter Saturday – April 19 Labor Day – May 1 Central American Independence Day – September 15 Francisco Morazan's Birthday – October 6 Discovery of America – October 12 Honduran Armed Forces Day – October 27 Christmas Day – December 25

• Paid Annual Leave

In Honduras, employees are entitled to paid annual leave after having worked for 12 continuous months for the same employer and can take advantage of it if they have worked for at least 200 days in the preceding year. The length of the leave depends on the length of service, as follows: 10 working days for 1 year of continuous service 12 working days for 2 years of continuous service 15 working days for 3 years of continuous service 20 working days for at least 4 years of service Splitting or accumulation of annual leave is not generally permitted. However, in exceptional cases, where the nature of the work does not allow for extended absences, annual leave may be accumulated for 2 years. 

• Sick Leave

In Honduras, 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 employment and four paid sick days per month after the first 12 months, up to 120 paid sick days. In some cases, sick leave may be extended up to one year, but at the end of the sick leave, the employee must be fit for work.   In the case of non-occupational disease, the leave is entirely covered by the employer for the first three days, and after that, the employer pays half of the sick pay, and Social Security covers the other half (the period the employer pays half of the sickness benefit is based on the employee's length of service). Once the employer's obligation to pay a partial sickness benefit expires, the employee is paid an amount varying between 23%-75% of his or her former wage by Social Security.

• Maternity Leave

The Labor Code of Honduras provides for fully paid maternity leave for ten weeks (70 days) upon proof of pregnancy in the form of a medical certificate that indicates pregnancy, the expected date of delivery, and the date of commencement of maternity leave. The ten weeks of maternity leave are split into two parts: four weeks before the expected delivery date and six weeks after. Employees receive their normal wages while out on maternity leave. The Honduran Institute of Social Security covers 66% of wages for insured employees while the employer is responsible for paying the remaining 34% of salary. If the employee is not enrolled with the Social Security Institute or has not made at least 10 contributions immediately before the start of maternity leave, the employer is liable to pay the employee's full salary. 

• Paternity Leave

There are no provisions in the Labor Code of Honduras regarding paid or unpaid paternity leave.

Termination of Employment

• Notice Period

The Honduran Labor Code requires employers to give a written dismissal notice indicating the cause for termination of employment contract. If the contract is oral, notice can be given verbally before 2 witnesses. The length of the notice period differs depending on the employee’s length of service as follows: 24 hours notice for service of fewer than three months One week of notice for service between three and six months Two weeks of notice for service between six and twelve months One month of notice for service between one and two years Two months of notice for service of more than two years Said notices can be omitted by any of the parties paying the other the corresponding amount. 

• Severance Benefits

In Honduras, the Labor Code states that severance payment shall be provided when an employment contract of an indefinite period is terminated, in one of the following situations: Unfair dismissal Any reason beyond the employee's control Voluntary retirement or death of the employee due to a labor accident The severance payment in these situations varies, depending on the worker's length of employment: Ten days wage for employees with three to six months of service 20 days wage for employees with six months to one year of service 30 days (one month) wage for each year of work for employees with more than one year of service, not to exceed 8 months of wages