Expand your organization into Honduras with or without a Honduran entity
The small Central American nation of Honduras is a minor economic force globally, but it has shown signs of growth in recent years and many foreign organizations recognize its potential as a site for investment.
If your organization is contemplating a move to Honduras, it is important to understand that progress can be slow in the country. The differences in language, culture, and business practices can all contribute to significant delays, so you should be prepared for your expansion to take weeks or even months to truly get underway.
At Horizons, we help organizations of all kinds to expand abroad, including into Honduras. Our professional employer organization (PEO), employer of record, and payroll services can provide your organization with everything you need to begin your Honduran expansion in a matter of just days, not the weeks or months it could otherwise take, even if you don’t have an established entity in the country.
With our own in-house recruitment team, we can also source, hire, and onboard your employees in Honduras, as well as manage any ongoing HR and compliance administration. Our dedicated team will provide everything you need to expand into Honduras as efficiently as possible and could save you thousands in expenditure.
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Hiring in Honduras: Employment law overview
Employment contracts in Honduras
Employment contracts in Honduras must be written and should include all relevant information about the role such as salary, benefits, and termination rights. Contracts should also be written in Spanish and use the local currency of the Honduran lempira.
Working hours in Honduras
The standard working week for employees in Honduras is made up of eight-hour days, with a maximum of 44 hours per week. The maximum is reduced to 36 hours for night shift workers and 42 hours for workers who work both days and nights.
Public holidays in Honduras
There are several annual national holidays in Honduras, and many employees are given the following days as leave from work:
- New Year’s Day
- Pan-American Day
- Easter Thursday
- Easter Friday
- Easter Saturday
- Labor Day
- Independence Day
- Francisco Morazán’s Birthday
- Discovery of America Day
- Armed Forces Day
- Christmas Day
Honduras vacation leave
Employees in Honduras are entitled to increasing amounts of paid vacation leave the longer their service with an employer. After one year of service, employees are entitled to at least ten days of vacation. After two years, this rises to 12 days, then 15 days after three years and 20 days after four years of service.
Honduras sick leave
After the first three days of absence through sickness (which are unpaid), employees in Honduras are entitled to 26 week of paid sick leave (rising to one full year in some special cases). Compensation is two-thirds of average pay from the preceding three months of work.
Parental leave in Honduras
Female employees in Honduras are entitled to 12 weeks of paid maternity leave, with six weeks to be taken before and after the birth. Compensation is two-thirds of average salary for the preceding three months.
Male employees in Honduras are not entitled to any paternity leave, although some employers choose to offer an allowance.
Terminations and severance in Honduras
The length of mandatory notice of termination for employees in Honduras depends on their length of service. For employees with less than two months of service, notice of just 24 hours is required. This gradually increases up to two months of notice.
Severance payments may also be necessary and also vary depending on the employees’ length of service, ranging from ten days of salary up to one month of pay per year of service.
Taxation in Honduras
Employers in Honduras must make contributions to both the country’s social security scheme and unemployment fund at a rate of 3.5% and 4% of salary respectively.
Income tax in Honduras is progressive, with rates ranging from 0% to 25% depending on income level.
Corporate tax in Honduras is 25%.
Health coverage in Honduras
Honduras has a comprehensive public healthcare system. However, many employers do choose to offer private medical insurance as part of their benefits packages.
Honduras compensations & benefits
Compensation laws in Honduras
Honduras has relatively complex minimum wage regulations, with the mandatory minimum rates varying greatly depending not just on the type of work but also the size of the company. For this reason, it is important to determine exactly which rate applies to your employees when hiring in the country.
Benefit management in Honduras
Many employees in Honduras choose to offer their employees benefits packages, including things such as extra pension contributions, a company car allowance, paid vacation days, a holiday bonus, and so on. However, setting up a benefits system in Honduras can be difficult if you are not familiar with the country’s complicated labor laws, language, and administrative norms.
Outsourcing your benefit management process ensures that you fully understand and adhere to the rules, ensuring your compliance and speeding up the process significantly. At Horizons, our Honduras employment experts will help you to find and arrange your benefits, advise on your strategy, and ensure compliance with the law.
Horizons will help you expand your business into Honduras faster
At Horizons, we specialize in providing tailored employer of record, PEO, and payroll outsourcing services to give businesses everything they need to begin trading in Honduras as efficiently as possible. Our experts will ensure that you are ready to start trading and hiring in Honduras in as little as 48 hours, and could save you up to 82% in expansion costs, even if you haven’t already registered a legal entity in the country.
Horizons can manage your company’s payroll, benefits, and expenses in Honduras. Additionally, we can oversee HR duties, as well as employment and tax compliance. And as the only global PEO with an in-house recruitment team, Horizons will source, hire, and onboard your local workforce.
Contact us today to discover how our Honduras-specific services can support your expansion.