Self-Employed workers law in Costa Rica

In the absence of publication in the Official Gazette La Gaceta, the “Law of the Self-Employed Worker” is already a reality. The new regulation is composed of only two articles and two transitory articles; however, its content brings substantial changes in favor of thousands of independent workers.

The first article of the law defines an independent worker as any natural person who performs work without subordination in the context of an economic activity, and who exercises control of his activities on his own account and may work alone or in collaboration with other independent workers and may or may not provide work to third parties.

The most significant novelty is incorporated in the second article, putting an end to retroactive adjustments – completely arbitrary – of more than fifteen years by the CCSS inspection agencies, since it finally fixes the statute of limitations to determine, impose sanctions and/or to collect social security contributions in a period of four years. It is worth mentioning that such statute of limitations will be extended to ten years in three different cases: (a) that self-employed workers do not register before the CCSS, (b) that formal declaration duties duly regulated are not complied with, and (c) in the case of self-employed workers who are registered but have filed declarations classified as fraudulent.

Also, as a novelty, the mentioned Article 2 adds that the statute of limitations must be declared in administrative proceedings at the request of the self-employed worker, without prejudice that it may also be alleged in judicial proceedings.

On the other hand, Transitory I of the law grants the CCSS a term of six months, counted from the approval of the law, to make the adjustments to its information systems and to regulate the conditions, requirements, and procedures necessary for its implementation.

Finally, Transitory II provides for a retroactive application of the law (endorsed by the Constitutional Chamber) in the following sense:

  • Self-employed workers registered: for social security contributions arising before the entry into force of the regulations, regardless of whether there are assessment, sanctioning or collection procedures, a four-year statute of limitations period will apply. In this case, the third paragraph of the Transitory provision clarifies that the CCSS may only determine contributions or collect them, if at the time of notifying the first inspection or collection act, the four-year statute of limitations period has not elapsed.
  • Unregistered self-employed workers: for a period of 24 months, counted as from the entry into force of the law, a prescription period of four years will apply for debts arising before the entry into force of the regulation, as well as those arising during such 24-month period. After these 24 months have elapsed, if the unregistered self-employed workers have not registered with the CCSS, a ten-year statute of limitations period will apply.