If you are interested in registering a business in Bolivia or already have commercial interests there, it is important to understand and comply with Bolivian employment law. The Ministry of Labor, Employment, and Social Welfare oversees employment law in Bolivia, which has similarities to legal codes in other countries in the region but also has its own unique regulations. To ensure compliance and navigate the complexities of Bolivian employment law, it is advisable to seek the assistance of a reliable corporate attorney with experience in assisting foreign investors in Bolivia.
If your business operations in Bolivia are short-term or limited in scale, or if you only need to hire a small number of executives, it may be beneficial to hire through a professional employer organization (PEO). When you hire through a PEO, the PEO firm contracts the staff on your behalf, giving you control over their workload and duties without the need to establish and dissolve a legal entity in Bolivia. This can be a faster and cost-effective solution while ensuring compliance with local regulations.
This guide provides an overview of employment law in Bolivia, including standard working hours, types of employment contracts, leave allowances, and tax contributions related to employees. If you require further assistance in understanding and implementing employment law in Bolivia, please contact us.
Standard working hours in Bolivia are typically eight hours a day and five to six days a week, with a maximum working week of 48 hours. Any additional hours worked must be compensated based on the hourly rate earned during regular working hours. Bolivia observes approximately nine to 11 national holidays on weekdays each year.
There are two main types of employment contracts in Bolivia used by foreign companies and investors. Indefinite contracts are the most common and can only be terminated by mutual agreement or under specific circumstances outlined in the contract, such as resignation or serious misconduct. These contracts typically include a 90-day trial period during which termination can occur more easily. Fixed-term contracts are used for temporary absences, work unrelated to the company’s core activities, or extenuating circumstances. They can only last for one year.
Under Bolivian employment law, employees are entitled to 15 days of paid vacation per calendar year after completing one year of service with the same employer. Sick leave requires employees to present a doctor’s authorization letter within three days of returning to work to receive payment. Maternity leave is 90 days, with 45 days before and after the baby’s due date, while fathers are entitled to three days of paid paternity leave. Bereavement leave is three days for public employees.
Statutory contributions under Bolivian employment law require employee deductions of 12.71% for social security, occupational risk, pension contributions, and insurance. Employees earning more than four times the minimum salary will also have value-added tax deducted from their salary. Employers are responsible for contributions totaling 16.71% of an employee’s salary, including social security, occupational risk, pension fund, and other contributions. Companies in Bolivia must share 25% of their net annual profits with eligible employees.
Biz Latin Hub offers a range of services to assist businesses operating in Bolivia, including company formation, visa processing, accounting and taxation, legal services, and hiring through a PEO. Our experienced team can support you in navigating employment law in Bolivia and provide tailored back-office solutions for your specific needs. Contact us for more information.
