Costa Rica – Withdrawal of the Labor Capitalization Fund (FCL) for employees affected by COVID-19

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Due to the recently declared national emergency stemming from the COVID-19 crisis, on March 31, 2020, the Costa Rica government revised and published, via Executive Decree N° 42272-MTSS-COMEX, the Temporary Unemployment Allowance.

Chapter V, articles 24 to 29, of Executive Decree No. 29044-MTSS-COMEX of October 30, 2000, was amended. It “Creates the National Employment Program and its Respective Regulations.” The National Employment Program may grant a temporary employment subsidy to people who lost their job or source of income, saw their income reduced due to change in their work shifts or are unemployed, due to the emergency.

Eligibility requirements for the subsidy:

  1. Costa Rican or residents over 15 years
  2. Unemployed, must have lost their job or if their income was reduced due to a work shift reduction
  3. Head of household
  4. Live in the area covered by the emergency

The allowance can be granted for up to three months, extendable for up to two equal periods, as long as the circumstances that motivated the subsidy are maintained and resources are available.

Also, Law N°9839, to allow the withdrawal of the Labor Capitalization Fund (FCL) to employees affected by the coronavirus pandemic, was published on April 4, 2020. Subsection d) is added to Article 6, Article 6 bis, which is added to Law N° 7983, Workers Protection Law.

Article 6 – Withdrawal of resources. The employee or their successors will have the right to withdraw the labor savings accumulated in their favor in the Labor Capitalization Fund, in accordance with the following rules:

  • d) In the event of a temporary suspension of the employment relationship, in the terms indicated in article 74 of Law 2, Labor Code, of August 27, 1943, or when a reduction in the ordinary work shift of the employee is applied, which implies a decrease in their salary, per Law 9832, Authorization to Reduce Work Hours due the Declaration of National Emergency of March 23, 2020.
  • Article 6 bis: When an affiliate requests the withdrawal of resources from the Labor Capitalization Fund, based on the provisions of subsection d) of article 6, complementary pension operators will have a maximum period of fifteen business days, counted as of the filing of the application, to deposit the resources. If the employee does not file all the documentation, the complementary pension operator must make prevention within forty-eight hours after receipt. The delivery period of the resources will be understood suspended while the interested party complies with the provisions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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