Bolivia PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Bolivia without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Bolivia, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Bolivia labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Bolivia. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Bolivia - Country Overview
Bolivia, with the 2nd largest reserves of natural gas in South America, exports natural gas, silver, zinc, and soy which constitute more than 70% of total exports. The economic growth averaged 4.9% between 2004 and 2014 due to prudent macroeconomic policy and high commodity prices. The Bolivian government’s 2016-2020 National Economic and Social Development Plan is aimed at maintaining an average growth rate of 5% between 2016 and 2020. The focus areas for investment include hydrocarbon exploration, infrastructure, industrialization of natural gas, and hydroelectric energy generation.
Presidential Representative Democratic Republic
Other Major Cities
Santa Cruz, Cochabamba, La Paz
Employment Contracts in Bolivia
Generally, employees in Bolivia are hired under indefinite agreements. Both employees and employers can enter into fixed-term agreements only under specific circumstances. Employment contracts are required to be in writing and approved by the Ministry of Labor. An employment contract must contain the following details:
- Names of the parties
- Nature of the work or service
- Age, nationality, civil status, and domicile of the employee
- Whether the work or service will be delivered or rendered by time units, specific work, by task or under more than one of these arrangements
- Duration of the contract
- Beneficiaries of employees
- Amount, method and period of payment of the agreed salary
- Place of work.
Employment contracts must be drafted in Spanish to be valid.
Working Hours in Bolivia
The regular work schedule comprises 8 hours per day and 48 hours in a week. Female employees cannot work for more than 40 hours in a week. The working hours are classified as follows:
Ordinary Daytime Working Hours:
- Working hours between 6 am and 8 pm
- Do not exceed 8 hours in a day
Night time Working Hours:
- Working hours between 8 pm and 6 am
- Do not exceed 7 hours a night
- Compensated by an increase of 25% to 50% in pay based on the circumstances
Extraordinary Working Hours or Overtime:
- Hours that exceed the regular work hours
- Compensated by an increase of 100% in pay
- Must not exceed 2 hours a day
Work done on public holidays is paid at 100% premium over the regular pay while the work on Sundays is compensated by thrice the regular pay or granting a compensatory day off.
Employee Leave in Bolivia
The following national holidays are observed in Bolivia:
- New Year’s Day
- Plurinational State Day
- Good Friday
- Labor Day
- Corpus Christi
- Aymara New Year
- National Day
- All Saints’ Day
- Christmas Day
Employees are entitled to annual leave after completing 1 year of employment as below:
- From 1 to 5 years of uninterrupted services – 15 working days
- From 5 to 10 years of uninterrupted services – 20 working days
- After 10 years of uninterrupted services – 30 working days
Female employees are entitled to 90 days’ maternity leave out of which 45 days can be taken before the childbirth and 45 days after. They are also entitled to a 1-hour period for breastfeeding during the child’s 1st year which should not be included in the 2-hour break period.
Employees are entitled to 5 days’ sick leave in a year provided they furnish a medical certificate showing their incapacity to work. They must be attended at a health entity (subject to registration) without having to bear any additional cost.
Spouses or partners of pregnant employees are entitled to 3 days’ paternity leave for the childbirth and protected from termination for 1 year post-childbirth.
- Adoption Leave
Adoptive parents are entitled to 2 months’ paid leave post-adoption and protected from dismissal for 1-year post the final decision permitting adoption.
- Carers’ Rights
A dependent who is registered with the employee for social security and requires urgent attendance is entitled to the short-term health services subject to certain regulations.
Employee Benefits in Bolivia
Government Social Insurance
For any employee working more than 4 hours a week, the employer needs to make contributions to the Department of Social Insurance of the Bolivia Government. The contribution to social insurance is used to provide disability benefits, survival benefits for widows and widowers, and old age pension. Currently, the mandatory contribution is $64.14 per week, which is allowed to be split equally between the employee and the employer.
Company Pension Plans
In the case of a Bermudian or an employee married to a Bermudian, employers need to set up a private pension plan with an approved pension fund and to make contributions to it under the National Pension Scheme. It is mandatory that 10% of the gross salary is paid into the scheme, of which the employer must pay 50%. People receive their pension benefit when they:
- reach the age of 65 years or older, and
- have contributed to or been credited with 25 to 50 contributions to the Contributory Pension Fund (CPF) in a year.
The payment they are entitled to receive depends on their total number of contributions and number of years they have been part of the pension plan. They may be eligible for the payment whether they have stopped working or not.
Employees in Bolivia may be eligible to receive a disability benefit if:
- Their age is more than 18 but under 65
- They are unable to work due to a mental or physical disability
- Their lack of capacity lasts for a period extending more than 52 weeks
- They were in gainful employment prior to the start date of disability
- They have made a minimum 150 contributions to social insurance
- Their average yearly number of contributions paid or credited exceeds 25, and
- They can provide a valid medical proof of disability.
The rate of benefit that they will receive will depend on their record of contributions. If an employee has no social insurance contributions, he/she may still be eligible for a disability benefit if the following conditions are fulfilled:
- Continuous resident status in Bolivia for a period of 10 years immediately prior to their date of application
- Age over 18 but under 65 years
- Incapacity to work due to permanent mental or physical disability
- Can submit a medical certificate as proof of their inability to work.
The Health Insurance Act 1970 mandates all employees and their non-working spouses to be covered under the minimum coverage of health insurance called the Standard Hospital Benefit. This is included in all private health insurance plans in Bolivia. Many employers also provide a much higher coverage than mandated by law.
Additional benefits often include a major insurance plan to cover overseas healthcare including benefits that cover the cost of check-up by doctors, prescription medicines, and yearly physical check-ups. Employers in Bolivia need to bear half the expense of health insurance. The actual cost of a health insurance plan depends on several factors including benefits and plan design. Some plans also cover dental insurance and vision care.
In Bolivia, there are two levels of coverage for dental care: basic and comprehensive. Those who take the basic plan get basic preventative services while those insured under the comprehensive plan get all the benefits of the basic plan as well as coverage for major restorative treatments.
A person or persons are entitled to a Survivors Benefit of:
- An allowance if he or she is a widow/widower, and if the deceased at the date of death satisfies the conditions of relevant contributions
- A gratuity if he or she is a widow/widower, and when the deceased did not qualify the relevant conditions of contributions
- Other Gratuity if there are children or a child and no widow/widower.
The estate representative is entitled to receive a benefit when there are no children or widow/widower.
HIP and FutureCare Benefits
The Health Insurance Department (HID) provides Health Insurance Plan (HIP) and FutureCare scheme. Enrolment to these plans is restricted by age and the needs of a patient. These plans cover in-patient and out-patient care, doctor’s visits, dental benefits, and overseas care.