Honduras

Honduras PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Honduras to companies willing to enter the Honduras market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Honduras.  Nevertheless our Employer of Record solution allows you to start the operations in Honduras within days hence save time and money.  WeHG would recruit candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. 

Honduras fast facts

Population, million:  9,904,607
Land area: 112,492 km²
Capital: Tegucigalpa
Local currency: Honduran lempira(HNL)

GDP per capita:$ 2080.00
GDP in currency:$ 24.11 billion
Economic growth percentage: 4.9 %
Inflation rate (consumer prices): 3.69%
Volume of export: $ 480 million
Import of goods and services: $ 11.97 billion
Total population: 9,904,607
Population of working age (15-65): 58.4 %

Those that are doing business in Honduras benefit from the fact that it is located in the center of Latin America and is a two-hour flight from major airports in the United States.  The country also has ports on both the Atlantic and Pacific coasts and is 48-72 hours from the US by sea.   

There are a number of transport services providers located at Honduran ports that link the country for trade with the rest of Latin America, as well as with North America, Asia, Europe, and Africa.

When doing business in Honduras one will find that it has the lowest logistics costs in all of the region and operates as a distribution center for the rest of Central America.  Puerto Cortes, on Honduras’ Atlantic coast, is the largest deep-water port in the region.  Additionally, it is one of four mega ports that are found in Latin America.

Hiring, Negotiating and Doing Business in Honduras

Necessity of written employment contract

In Honduras, it is legally required to put the employment contract in writing, and it should include the the employee’s compensation, benefits, and termination requirements. Always state the salary and any compensation amounts in Honduran lempira rather than a foreign currency.

Honduras Employment Contract

Types of employment agreements

Honduran Labour Law prohibits hiring fixed term contract workers for tasks of permanent nature. Fixed term contracts and contracts concluded for a specific work are an exception. They can only be concluded where it is required by the incidental or temporary nature of the service to be performed or the work to be executed. The general duration of fixed term contracts is 12 months. This duration is 60 months if the work requires special technical preparation; however, a longer term can only be found to be in violation of the law on the express request of the worker. A fixed term contract is subject to renewal and maximum duration of a fixed term contract including renewal is 24 months.

Honduras working hours

Working hours generally cannot exceed eight hours per day or a total of 44 hours per week.

Overtime

  1. 25% additional to the regular daytime salary if the overtime is done during day hours; 
  2. 50% additional to the daytime salary, if the overtime is done during the nigh hours;
  3. 75% additional to nighttime salary when the overtime are an extension of the regular night shift. Regular working hours plus overtime may not exceed 12 hours in one day, except under extraordinary circumstances (as established in the labor contract.)

Vacation leave in Honduras

  1. 10 consecutive work days for the 1st year of work; 
  2. 12 consecutive work days for the 2nd year at work; 
  3. 15 consecutive work days for the 3rd year at work; 
  4. and 20 consecutive work days for the 4th and following years at work.

Sick leave: 

Sick leave starts from the third day of sickness.  Employees are entitled to up to 26 weeks of sick leave per year and can be extended up to 52 weeks.  Pay is 66% of the average of the previous 3 months or 100% if the employee is hospitalized and has no dependents.   Pay is split equally between the employer and social security.

Honduras Maternity Leave

Mothers are entitled to 84 days (12 weeks) of maternity leave and can begin 42 days before the expected due date. The mother is entitled to 100% of the average of the previous 3 months’ wages.   

Social security pays 66% of the maternity leave pay and the employer pays 34%.   

If a mother is not covered by social insurance, the employer must provide maternity leave. 

Honduras Severance Laws

Type of termination may be classified into: dismissal with cause wrongful dismissal.

A dismissal with cause takes place when the employee incurs in severe misconduct, e.g. violent action during his/her work shift, breach of contract, or any of the situations set forth in Article 112 of the Labor Code.

In case of this type of dismissal the employee will not be paid his/her termination benefits, as the employment contract has been terminated for reasons attributable to the employee; in this scenario, the employer will only be required to pay the employee the amounts for the employee’s vested rights, including vacation pay, the thirteenth month bonus (commonly known as Christmas Bonus), and the fourteenth month bonus.

For purposes of avoiding any negative consequences arising from the wrongful dismissal, however, employers are advised to resort to termination on mutual consent, according to Article 111 (2) of the Labor Code.

The notice period is determined by the length of employment:

  • Less than 3 months – 24-hour notice 
  • More than 3 months but less than 6 – 1 weeks’ notice
  • More than 6 months but less than 1 year – 2 weeks;’ notice
  • More than 1 year but less than 2 years – 1 months’ notice
  • More than 2 years – 2 months’ notice  

Honduras Tax

Domiciled individuals will be subject to 1.5% tax on gross income equal to or greater than HNL10 million when the progressive income tax for individuals is less.

Social security tax contributions are assessed as follows:

  • Sickness and maternity: 2.5% for employees on income up to a maximum ceiling of HNL 9,380.67.
  • Invalidity, old age, and death: 2.5% from employees on income up to a maximum ceiling of HNL 9,792.74.

Health Insurance Benefits in Honduras

The Honduran Health Insurance system guarantees individuals access to health care benefits and health services. The service is funded through contributions at the following monthly wage rate:

  • Employee: 2.5% of monthly wage
  • Employer: 5% of the employee’s monthly wage
  • Government: 0.5% of the employee’s monthly wage

Additional Benefits in Honduras

13th Salary

Employees are entitled to 13th and 14th salaries and are paid in June and December.  Each is for the amount of one months’ salary.

Honduras Holidays

  • New Years
  • Day of the Americas (Pan-Americanism)
  • International Labor Day
  • Independence Day
  • Francisco Morazán’s Birth
  • Day America was Discovered
  • Armed Forces Day
  • Christmas
  • Thursday, Friday and Saturday of Easter Week, Holy Days

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Honduras

  • Working hours in Honduras

    Working hours generally cannot exceed eight hours per day or a total of 44 hours per week.

  • What are the main holidays in Honduras?

    • New Years
    • Day of the Americas (Pan-Americanism)
    • International Labor Day
    • Independence Day
    • Francisco Morazán’s Birth
    • Day America was Discovered
    • Armed Forces Day
    • Christmas
    • Thursday, Friday and Saturday of Easter Week, Holy Days
  • What are payroll taxes in Honduras?

    Domiciled individuals will be subject to 1.5% tax on gross income equal to or greater than HNL10 million when the progressive income tax for individuals is less.

    Social security tax contributions are assessed as follows:

    • Sickness and maternity: 2.5% for employees on income up to a maximum ceiling of HNL 9,380.67.
    • Invalidity, old age, and death: 2.5% from employees on income up to a maximum ceiling of HNL 9,792.74.
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