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If you are looking for register a business in BoliviaBolivian employment law is complex. If you have commercial interests in Bolivia, you will need the ability to navigate it. This will allow you to establish and maintain your credibility in the local market.
The Bolivian Employment Law Office oversees employment law. Ministry of Labor, Employment and Social WelfareIt is similar to other regional legal codes, but it also has its own uniqueities.
You will need to hire the services of a reliable corporate attorney in BoliviaWe have a long history of helping foreign investors to enter the market and do business there.
If you are planning a short-term or limited-scale operation in the country, or simply need to hire a small number of executives to oversee your business, you may find that hiring through a professional employer organization (PEO) in BoliviaThis is the best option.
You can hire staff through a PEO because the PEO contract those staff on your behalf. This means that you have full control of their workload and duties, and you don’t have to set up or liquidate any entity in the country. This is a faster and more cost-effective way to hire staff, and it also ensures compliance with local regulations.
The following guide to Bolivian employment law provides an overview of the regulatory system, including standard working hours and leave allowances. It also explains how tax contributions are related to employees you supervise as their employer.
To learn more about our services in Bolivian employment law, please click here contact us today.
Bolivian employment law regulates working hours
A Bolivian employment law states that a normal working day should be eight hours long. A standard week of work is no less that five days and no longer than six days. The maximum working week is 48 hours.
While it is possible to work additional hours, they must be compensated according to the hourly rate earned during normal working hours.
It is important to note that Bolivia has between nine and eleven national holidays each week.
Employment law in Bolivia: Common contract types
Foreign companies and investors can use two types of contracts that Bolivian employment law allows.
- Indefinite contractsThese contracts are the most popular in Bolivia. They cannot be terminated unless both parties agree to it or when one party has the authority to act unconstitutionally based on the contract. If an employee resigns or is found guilty in serious misconduct, they may be removed.
Bolivian employment law allows for indefinite contracts with a trial period up to 90 days. After that, termination can be made without any restrictions.
- Fixed-term contractsThese contracts can only be used in certain situations, such as when an employee is temporarily absent (for example, long-term sick cover or maternity leave), or when the employee is performing work that is not related to core activities of the company. Contracts of this nature can be used in exceptional circumstances, such as when medical staff is needed during an emergency. Bolivian employment law allows for a one-year term contract.
Vacations, leave, or other absences
Bolivian employment law gives employees 15 days of vacation after one year of service to the same employer. It is the employer’s responsibility to make sure that an employee uses their full allowance.
Sick leave
Employees have the right to be paid for sick days. To receive payment, employees must present a signed authorization letter from a registered physician within three days of their return. The authorization must be presented in the event of a longer-term absence.
Maternity and paternity leave
Bolivian employment law provides for a 90-day maternity leave allowance. It is made up of 45 days prior to the due date and 45 days thereafter. Fathers have three days of paid paternity leaves. A new parent cannot be fired until one year after the birth.
Bereavement
Public employees are entitled to three days of paid grief leave in the event that a parent, child or sibling dies. Although public employees do not have the legal right to be granted any paid leave for bereavement, the three-day allowance is generally respected.
Bolivian employment law requires that statutory contributions be made
Employee deductions:
Total 12.71% of the deductions from salaries of employees are made up of a 10% deduction for social security, an occupational risk deduction of 1.71%, a 0.5% pension contribution deduction, and a 0.5% insurance deduction.
Bolivian employment law provides that anyone who earns more than the minimum salary will see value-added tax deducted from their salary.
As of 2021 the minimum salary for Bolivia is 1,805 bolivianos a month (approximately US £262). This means that any salary above 7,220 bolivianos a month (approximately US 1,048) is subject to VAT.
Contributions by employers
Employers must make contributions totalling 16.71% of an employee’s salary, made up of a 10% contribution towards social security, a 1.71% contribution towards occupational risk, a 2% contribution towards the pension fund, and other contributions totalling an additional 3%.
Profit sharing
Bolivian companies must share 25% of their net annual profits to employees who have worked for them for at least three months. Employees can also earn profit shares based on their salary.
Biz Latin Hub can help you do business in Bolivia
Biz Latin Hub’s multilingual team includes corporate support specialists who have the knowledge and experience to help you navigate Bolivian employment law.
We offer a wide range of back-office solutions including company formation, visa processing, accounting & taxation, legal services, hiring & PEOThis means that we can tailor a package of back office services to suit each client’s needs.
We have teams in 15 additional markets in Latin America and the Caribbean. This allows us to help you plan your operations and tax across multiple markets. We also specialize in multi-jurisdictional market entries.
Contact us nowWe would love to help you with your business.
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