Global HR Compliance in Bolivia

Navigating the complexities of labour legislation is crucial for companies planning to employ an international workforce in Bolivia. This detailed guide will help you understand the nuances of Bolivian labour laws, ensuring compliance and effective management of your global human resources.

Expanding Into the Bolivian Market

Strategic Planning: Before entering the Bolivian market, it’s essential to understand the local requirements for employing nationals and the strategies for integrating them into your global operations.
Local Hiring Questions: Address the primary concerns regarding how to execute local hires effectively and legally.

Global Employer of Record (EOR) Solution

Outsourcing Model: Leverage our Global Employer of Record service to outsource the employment of your foreign workforce, minimizing the complexities associated with international labour management.
Comprehensive Employment Management: We handle the employment of your global sales force in Bolivia and across 190 countries, providing payroll and benefits and managing business expenses on your behalf.

Key Benefits of Global EOR Services in Bolivia

Local Compliance Assurance: Our solution ensures full compliance with Bolivian labour laws, protecting your business from risks associated with non-compliance and employee misclassification.
Risk Management: As the employer of record, we absorb all employment-related risks, allowing you to focus on your core business activities without legal exposure.
Operational Efficiency: Avoid the need to establish your own legal entities in Bolivia by leveraging our local infrastructure, thereby reducing costs and administrative burdens.

Workforce Engagement and Management

Dedicated Focus: Your employed sales force will devote 100% of their time to promoting and selling your products, which can lead to higher retention rates compared to independent foreign sales representatives.
Full-Time Engagement: Ensuring your workforce fully focuses on your company’s objectives and integrates into your corporate culture.

Compliance and Expertise

Guaranteed Compliance: The Global Employer of Record solution is a fully compliant service that guarantees adherence to all local legislation in Bolivia, safeguarding your operations against legal issues.
Local Expertise: Our team of experts, proficient in English and familiar with local nuances, is available 24/7 to support your business operations across different time zones.
Customized Labour Solutions: We tailor our labour solutions to meet your business’s specific needs, ensuring legal management and compliance with local employment laws.
Deep Market Understanding: With extensive knowledge of local market conditions and regulatory requirements, we can efficiently meet your needs for skilled professionals.
Trusted Local Partners: Our qualified partners ensure that your workforce complies with all local tax, social security, and immigration laws, providing a seamless integration into the Bolivian market.

The Hiring and Firing Workforce in Bolivia guide offers a general overview of labour rules and regulations in the country. For businesses looking to employ workers in Bolivia or seeking more detailed information, our services are designed to simplify and enhance your global employment strategy.

Global Payroll Calculator – Your Precision Tool for Global Employment Cost Analysis

The Global Payroll Calculator (GPC) offers a sophisticated solution for instantly calculating employment costs across 190 countries, streamlining your global hiring strategy and ensuring cost-effective decisions.

Key Features & Benefits

Instant Cost Calculations: Quickly determine total employment costs, factoring in real-time tax rates and benefits for local and foreign talent in 190 countries.
Precision & Clarity: Achieve precise payroll calculations with detailed breakdowns of all payroll variables, ensuring transparency and preventing unexpected costs.
Cross-Country Comparisons: Utilise GPC’s capability to perform instant comparisons between countries, helping you identify the most advantageous locations for hiring.

Core Capabilities

Total Employment Cost Analysis
- Monthly and yearly costs.
- Gross-to-net and net-to-gross calculations.
- Detailed breakdowns, including employer liability and employee taxes.
Full Tax Breakdown
- Comprehensive coverage of social contributions, personal income tax, and automated tax caps.
- Employer and employee tax splits with allowances and holiday entitlements.
Built-in Compliance
- Ongoing validation against trusted government sources.
- Updates in real-time to reflect the latest tax and labour laws.

Hiring and Firing Workforce in Bolivia Guide

Employment Agreements

Permanent employment contracts

As a rule, employment contracts must be entered into for an indefinite term.

Casual employment contracts

Part-time workers must be paid at least the national minimum wage. All social benefits also apply to part-time workers. Part-time workers who work for a company that is part of a group of companies must be paid by the entity to which they render services.

Fixed-term contracts

A fixed-term employment contract or a contract for a specific work or service must be in writing and approved by the competent officer at the Ministry of Labour. Lack of approval may have implications on the agreement’s effectiveness, and the agreement may be considered an indefinite contract with all its effects.  A fixed-term employment agreement can only be used in special circumstances such as:

Temporary replacement of workers (due to pregnancy, holidays and so on).
Cases where the employer must increase the number of workers to cover specific demands of products or production.
Completion of projects with a pre-established delivery date.

Employment Termination and Severance Pay in Bolivia

Labour Code sets out the following causes for the termination of employment, and in these cases, there is no entitlement to severance pay or compensation:

Intentional material damage to working tools/ instruments.
Revelation of industrial secrets.
Imprudence or omission impacting industrial security or hygiene.
Partial or complete breach of agreement.
Larceny or robbery committed by the employee.

Prohibited grounds:

Marital status
Pregnancy
Colour
Sex
Sexual orientation
Religion
Political opinion
Nationality/national origin
Age
Trade union membership and activities
Disability
Financial status
Language
Birth
Ethnic origin

Justified dismissal can also be based on internal rules and disciplinary procedures set out in the employer’s internal regulations which must be duly approved by the employees. Any cause invoked for justified dismissal must be duly backed up and fully proven. The employer does not need to pay social benefits when the employee is dismissed before the completion of the trial period (90 days).  An employee who accepts an unjustified dismissal is entitled to severance pay for years of service. The employee must receive one month’s salary for each year worked and any incomplete year (for fixed-term employees).

Notice Period in Bolivia

The Labor Law mandates employers to provide workers advance notice of their dismissal. The length of notice period varies for blue-collar workers (obreros) and white-collar (empleados).

Labour contract with workers (“ obreros”):

1 week of advance notice for contracts longer than one month.
15 days of advance notice for contracts longer than six months.
30 days of advance notice period for contracts longer than one year.

Labour contracts with employees (“empleados”) require a 90-day notice period if the contract has been consecutively longer than 3 months.

Severance Payments in Bolivia

Other payments must be payable to the employee on termination, such as Christmas bonuses, holiday pay and profit bonuses. On termination, the employer must present to the Ministry of Labour a certificate that confirms that it complied with its social security obligations and has no outstanding debts. Upon dismissal, the employer and employee must file a Spanish “Finiquito” form before the Labour Ministry. The employer is obliged to pay, within 15 days of dismissal, the amounts corresponding to severance payment (if applicable) plus other employment benefits owed to the employee. Female employees and their spouses or partners are protected against dismissal for a period of one year following a child’s birth. Union leaders and disabled workers also benefit from special protections against dismissal.

Employee Benefits and Contributions

List all mandatory monetary and non-monetary benefits required by law to be provided by an employer:

All employees are entitled to an annual paid holiday after one year of uninterrupted services (Vacations).
Public holidays.
Paid time off in the case of illness or injury.
Maternity and Paternity rights and leaves.
Christmas bonus (Aguinaldo).
Seniority bonus (Bono de Antigüedad).

Other than obligatory employee benefits or rights, these are generally incorporated in the employment contract or in the employer’s internal regulations, which must be approved by the employees. The most common benefits relate to paid and unpaid leave for maternity, paternity, birthdays, and the death of a relative or other person on special request by the employee. Other rights may also be granted, such as housing, parking, and so on. However, these benefits are part of the monthly salary and are subject to taxes and social security contributions.

Probationary Period in Bolivia

The trial period is regulated by the General Labor Law, which establishes a maximum of three months. The trial period can be extended or renewed; however, the maximum term is not specified by law. There is no trial period for fixed-term contracts.

Overtime

Extraordinary working hours or overtime refers to hours exceeding the maximum daytime or night-time working hours. They must be compensated with 100% extra pay and not exceed two hours per day. Extra pay of 100% also applies to work done during public holidays. Work carried out to correct an employee’s mistakes does not count towards extraordinary working hours. To be entitled to payment for extraordinary working hours, a worker must be expressly authorized under the employer’s procedures. Overtime is work that is carried out at times of emergencies or to meet the employer’s needs. Overtime is treated as extraordinary working hours.

Work Hours

A day’s work is the time during which the employee is at the employer’s disposal. Working hours must not exceed eight hours per day (for daytime working) or 48 hours per week. For female workers, working hours cannot exceed 40 hours per week.

The following rules apply to working hours:

Ordinary daytime working hours: between 6 am and 8 pm.
These are not exceeding the legally established working hours (that is eight hours per day).

Annual Leave in Bolivia

All employees are entitled to an annual paid holiday after one year of uninterrupted services, as follows: 

From one to five years of uninterrupted services: 15 working days.
From five to ten years of uninterrupted services: 20 working days.
After ten years of uninterrupted services: 30 working days.

A worker who has received one or more partial severance (indemnity) payments but continues working for the employer will benefit from the annual paid leave corresponding to the years served since his or her hiring (provided that he or she worked continuously for the employer during that time).  Annual paid holiday entitlement cannot be compensated with money, except in the case of termination of the employment agreement. Unused annual paid leave can be accrued under a prior written agreement.

Sick Leave

Entitlement to paid time off, In the case of illness or injury, an employee must be attended to in the health entity where he or she has been registered, under no additional cost for her or him or the employer. To be entitled to paid sick time off, the employee must provide a certificate showing an impediment to work.  Under Bolivian regulations, employers and employees must be registered with both entities regulating short-term social security (that is, health and short-term related assistance, such as maternity or certain accidents) and long-term social security (pension funds).

Employers and employees are both required to contribute to social security. Employers must ensure that their employees are registered with the appropriate social security entities within the first five days of employment.

Registration Requirement: Employers are obligated to register new hires with Social Security within five days of their start date.
Private Health Insurance: While private health insurance is common, it is typically used in conjunction with, not as a replacement for, mandatory social security coverage. Employers often provide private health insurance as an additional benefit.

Unpaid Time Off and Health Expenses

Private Healthcare Use: If an employee opts for treatment from a private health entity without using the Social Security system, the employer or the social security entity will reimburse the costs incurred only in emergency situations, provided the correct reimbursement procedures are followed.
Private Healthcare Use: If an employee opts for treatment from a private health entity without using the Social Security system, the employer or the social security entity will reimburse the costs incurred only in emergency situations, provided the correct reimbursement procedures are followed.
Reimbursement Denial: If the reimbursement is not approved, any related medical leave certification (impediment certificate) may be invalidated. Consequently, the employee’s salary may be reduced for the days missed unless such absence is explicitly authorized by the employer.

Parental Leave

Maternity Leave

Duration: Female employees are entitled to a total of 90 days of fully paid maternity leave, divided equally into 45 days before and 45 days after delivery.

Breastfeeding Accommodations

Daily Breaks: During the child’s first year, female employees must be granted one hour per day for breastfeeding. This hour is in addition to and should not be counted within any other break entitlements, such as the standard two-hour break.

Financial and Nutritional Subsidies

Pre-natal Subsidy: From the fifth month of pregnancy, pregnant employees or the spouses of pregnant employees are entitled to a pre-natal subsidy.
Nursing Subsidy: A nursing subsidy is available until the child reaches one year of age.
Subsidy Contents: The employer provides Both subsidies and includes monthly deliveries of dairy and nutritional products equivalent to one monthly national minimum wage.
Birth Bonus: Additionally, when the child is born, these employees receive a one-time payment equivalent to one monthly national minimum wage, also provided by the employer.

Employment Protection

Job Security: Female employees are protected from dismissal for a period of one year following the date of the child’s birth, safeguarding their employment during this critical period.

These provisions ensure that female employees receive adequate support, both financially and in terms of workplace accommodations, during pregnancy and the early stages of motherhood.

Paternity Leave

Spouses or partners of pregnant employees are protected from dismissal for a period of one year following the child’s birth. They are entitled to three days’ paid leave when the child is born.