Employment Law in Honduras: A Guide

Managing the pathway to establishing a successful business venture in a foreign land is a rewarding yet intricate process. For foreign business owners considering the vibrant market of Honduras, understanding the nuanced landscape of employment laws is essential. 

The distinctive set of employment laws in Honduras shapes its workforce dynamics. This piece will dive into the complexities of this nation’s labor legal framework, offering an insightful outline of the rights, responsibilities, and protections governing the workplace. 

Don’t let compliance slow down your global growth. Our guide is an essential tool for business leaders to successfully navigate the employment law in Honduras. 

SEE ALSO: Employer of record in Honduras

Employment Law in Honduras: minimun salary

What is the minimum salary in Honduras?

On April 6, 2022, the Ministry of Labor and Social Security passed new regulations that established the adjustment percentages for the national Minimum Wage.

The approved minimum wage encompasses a range: from a monthly minimum of Seven Thousand Four Hundred Eight Lempiras (approximately US$302) to a maximum of Fourteen Thousand Three Hundred Forty-Seven Lempiras (approximately US$585). The actual wage within this spectrum depends on factors such as the company’s activity, category, and size, as well as the number of workers employed.

Employment Law in Honduras: Key Guidelines

  • Employment Probation Period
  • Working Hours
  • Annual Leave in Honduras
  • Sick Leave
  • Maternity Leave

Employee Probation Period: During the initial assessment phase, a probationary period not exceeding 60 days is observed.

Working Hours: Typically, the duration of work per day should not surpass eight hours, and the cumulative weekly limit is 44 hours. For individuals working night shifts, the weekly workload must not exceed 36 hours. For those working a combination of day and night shifts, the upper limit stands at 42 hours per week.

Annual Leave in Honduras: The allocated minimum vacation duration for employees under the Honduran jurisdiction is as outlined:

  • 10 days of vacation following the completion of the first year of employment
  • 12 days after the second year
  • 15 days following three years of service
  • 20 working days for a tenure of four years or more.

Sick Leave: Employees have the right to receive paid sick leave when facing short-term incapacitation due to an occupational accident. This compensation is granted at a rate of two paid sick days per month within the initial 12 months of employment and subsequently at a rate of four paid sick days per month. The cumulative allowance extends to a maximum of 120 paid sick days.

Maternity Leave: As stipulated by the Labor Code, employees are entitled to a span of 10 weeks or 70 days for paid maternity leave. To receive this benefit, a worker is required to provide the employer with a medical certificate detailing the pregnancy, anticipated delivery date, and the intended commencement date of the maternity leave. This period encompasses 4 weeks preceding the birth and 6 weeks succeeding it.

Employment Contracts in Honduras

Collective bargaining agreements (CBAs) and labor unions wield significant influence within Honduras, impacting the dynamics of your relationship with employees. It is imperative to factor in these elements before proceeding to hire and offer employment in the country.

Honduran regulations mandate employers to formulate robust employment contracts encompassing crucial details like compensation, benefits, termination protocols, and more. It’s crucial to express all remuneration figures in Honduran lempira, the local currency. Additionally, your contractual documentation must align with the provisions outlined in any applicable CBA or labor union regulations.

An important legislative change occurred in April 2022 with the repeal of the law permitting hourly employment. As of June 2022, only indefinite term contracts, fixed term contracts, and project contracts remain permissible. This shift in regulation necessitates a proactive adjustment in your approach to employment contracts within the country.

Employment Law in Honduras: Minimun vacation duration for employees

Employment Law in Honduras: Termination of Employment

Here are the methods for concluding an employment agreement in Honduras:

Just Cause: Dismissal can occur when an employee engages in grave misconduct as stipulated in the Labor Code or the Company’s Internal Regulations.

Without Just Cause: Employers have the authority to terminate an employee’s contract at any time while adhering to the compensation outlined in labor regulations.

Fixed-Term Contract: If an employee is engaged under a fixed-term contract, termination can be initiated by asserting just cause with prior authorization from the Ministry of Labor, or upon the contract’s expiration.

In all instances, the conclusion of an employment contract must align with its terms. In most scenarios, specific procedural prerequisites must be met before termination to prevent it from being deemed unfair.

Employers possess the ability to dismiss employees without providing justification, as long as due compensation is disbursed in accordance with the law. However, there remains a potential risk wherein employees could contest the payment and seek reinstatement.

Employees generally have the prerogative to resign from their positions. Both parties can mutually agree to termination by adhering to notice periods and conditions specified in the employment contract or legal statutes. Termination due to age is possible once the employee attains the requisite retirement age, affording them the choice between retirement and continued work.

The notion of a “frustrated” contract arises in exceptional circumstances where external factors render its performance unattainable. Instances of this nature are rare and might involve the employee’s demise or complete obliteration of the workplace due to events like earthquakes.

Ultimately, the parties involved retain the liberty to agree on termination grounds, grounded in the principles of contractual freedom and good faith.

Frequently Asked Questions about Labor Laws in Honduras

In our experience, these are the common questions and doubtful points of our Clients.

1. What are the labor laws in Honduras?

In Honduras, the standard workweek is 44 hours, and fixed-term or indefinite employment contracts are flexible. The country sets a national minimum wage, and employees are entitled to annual paid leave. Maternity leave is granted with full pay, and social security contributions encompass health and retirement benefits. Labor laws recognize collective bargaining and the right to strike.

2. What are the working conditions in Honduras?

The maximum workday in Honduras is 8 hours. Workers are not allowed to work more than 44 hours in a week and are entitled to a 24-hour rest period every 8 days. According to the labor code, workers are granted 10 days of paid vacation after completing 1 year of work, and this increases to 20 days after 4 years of work.

3. How many hours are in a standard work day in Honduras?

In Honduras, a standard work day consists of 8 hours.

4. What is the minimum salary in Honduras?

The minimum salary in Honduras refers to the lowest amount that a worker can legally be paid for their work. In Honduras, the range of minimum wages varies from 5,681.73 Honduran lempiras per month (equivalent to 22.44 lempiras per hour) to 8,803.70 lempiras per month (equivalent to 36.68 lempiras per hour).

5. How is overtime paid in Honduras?

Overtime in Honduras is paid at a rate of 125% for overtime hours worked during the day and 170% for overtime hours worked at night. The maximum number of overtime hours allowed in a week is 16 hours.

6. What are the laws regarding employment termination in Honduras?

Employers in Honduras have the authority to terminate an employee’s contract without just cause. This can be done at any time, as long as the compensation outlined in labor regulations is adhered to.

7. What are the requirements for terminating an employee in Honduras?

To terminate an employee in Honduras, there are specific requirements that must be met. These requirements include:

– Just Cause: Dismissal can occur when an employee engages in grave misconduct as stipulated in the Labor Code or the Company’s Internal Regulations.
– Without Just Cause: Employers have the authority to terminate an employee’s contract at any time while adhering to the compensation outlined in labor regulations.

It is important for employers to provide a written notification to the worker indicating the cause of termination. Additionally, the length of mandatory notice of termination depends on the length of service, ranging from 24 hours for employees with less than two months of service to up to two months of notice. If the employer fails to prove the alleged cause for dismissal, compensation must be paid to the employee.

8. What happens when an employee quits in Honduras?

When an employee quits in Honduras, they are entitled to vacation and bonus payments based on the time they worked. The Ministry of Labor provides calculations for severance payments. If the employer does not give a notice period, they may pay full wages instead. If the employee is required to give notice, they may pay half wages. In the case of termination, the employee is entitled to vacation, bonus payments, and unemployment benefits.

Biz Latin Hub Can Help with Employment Law in Honduras

At Biz Latin Hub, we have a dedicated team of specialists ready to deliver tailored solutions that address your unique business requirements in Honduras.

With our extensive legal, accounting, and back-office services, we serve as your primary point of contact, streamlining and accelerating your entry into the Honduran market.

Talk to our team of local experts today about business opportunities in Honduras, company formation, and how to best enter this LATAM market. 
If you found this article about Employment Law in Honduras helpful, explore the rest of our coverage of the region or learn more about our team and expert authors.

Employment Law in Honduras: Key services offered by Biz Latin Hub

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Craig Dempsey

Craig Dempsey

Craig is a seasoned business professional in Latin America. He is the Managing Director and Co-Founder of the Biz Latin Hub Group that specializes in the provision market entry and back office services. Craig holds a degree in Mechanical Engineering, with honors and a Master's Degree in Project Management from the University of New South Wales. Craig is also an active board member on the Australian Colombian Business Council, and likewise also active with the Australian Latin American Business Council.

Craig is also a military veteran, having served in the Australian military on numerous overseas missions and also a former mining executive with experience in various overseas jurisdictions, including, Canada, Australia, Peru and Colombia.

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