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New Law Could Bring Salary Changes to Wait Staff Served
Although Minister of Labour Suggested to Fired and Re-hire, Restaurants Owners Refused to Do So

By Giordano Ciampini

A decision by the constitutional court in San Jose, in a 6-1 vote, made to streamline income and collect taxes on it, could mean the loss of millions of colones for serving and wait-staff across the country.

Wait staff used to be paid a salary in addition to tips, however new service staff hired within the country will now be paid through gratuities given by customers, up to a point. The minimum wage is 240.000 colones per month, and if tips don't total that amount or more, the employer is expected to pick up the tab.

The pinch is going to be felt by new workers in the industry, however those currently employed may face an even stranger proposition, as efforts to implement this new payment scheme unfold.

In May, 2011 the Ministry of Labour suggested that restaurants, bars, and other dining establishments first fire, and then re-hire all their workers in order to put them on new contracts, listing them as “commission paid” instead of normative wage recipients.

“It's very bad,” remarked Kattia Valencia Lopez, a server at El Lagarto BBQ in Samara. “The government are idiots. Workers who have been working for 20 years are going to be re-contracted now? I don't get it, it's illogical.”


Regardless of the pay system in place, employers will still have to cover servers for social security contributions and other taxes, however some employers are still not affected because the change to server pay criteria are opt-in for the moment.
Employers like Nosara's Rancho Tico hire servers for the long-term, and keep them well taken care of, “like family,” according to administrator Leo Alvarado Juarez.

“At the present time, it doesn't affect anything,” said Juarez. “We have an agreement with our servers, where they have a salary plus 10%, and they have tips as well.”

“We aren't going to change our agreement,” he explained. “Because we're on their side, we try to help our servers, and they work for us for ten or fifteen years.”

Other restaurants within the Nosara area have mirrored the sentiment.

Harmony Hotel's restaurant manager, Jose Cordero says that the new change has created confusion, but that they are standing still, “we're on standby until we have a clearer direction on where this is heading,” he said. “We don't want to create confusion amongst our employees, so we're taking it slowly and consulting with lawyers, and we know that not everyone is doing the changes, so until we have to implement it, we're staying right where we are.”

Fabian Piguet, the owner of Cafe de Paris, says that the change presents a large problem for the workers, “more than anyone, it affects them,” he said. “I want to continue as we're doing now, with salary, plus 10% commission. The question for servers is about motivation with the new law. [With commission], it's minimally secure, so how can you make a life, with kids and a family on minimum wage?”

The Costa Rican Chamber of Affiliated Restaurants (CACORE), suggested that member restaurants who have started the process of firing and re-contracting workers to “temporarily suspend” the action in order to await additional challenges and changes from the President's office.

Manuel Burgos, CACORE's president, said that the biggest problem is the current liability for businesses, who may be set upon with onerous fees, depending on how many employees they have, and how long those employees have been working with them for.

“The problem is the interpretation of the law,” said Burgos. “Employers would be obligated to pay back-taxes and social security payments, that these companies would be forced to pay out at risk to their businesses.”

“Businesses, by their nature, are supposed to take risks and handle it,” he explained. “But they need to know the size and shape of the risk, and some people might not be able to continue to do business if the liability becomes a reality.”

That liability, according to Burgos, is what's been motivating early-adopters to start firing and re-contracting employees, so that from the date of re-contracting the 10% commission is listed as the employee's only taxable income, therefore eliminating the need to have to pay penalties and fees from years before the new law took effect.

However, things may slowly be changing.

Wednesday, December 5th saw a meeting between the President's office, deputies, CACORE and other stakeholders. “We're working with the chamber of deputies to create a new law,” said Burgos. “It will happen, we will be able to make it go through in 90-180 days, and the law that we're working on is to go back to the way things were before, where 10% wasn't considered salary, it was a legally-mandated tip, it was like this for 40 years, where waiters would be paid on salaries.”

Burgos suggests that the new law will be on the books “quickly.” But, “quickly, with the legislative assembly, can mean a couple of months, or a few years,” he conceded.

Kattia Lopez has only been working for the last two years, but she says that she feels some anxiety over the new changes, and that even though her workplace hasn't proceeded with the forced switch to tip-based payments, nothing is for certain.

“Until now, our boss hasn't changed anything,” she said. “I don't know if he plans to change things, but he hasn't spoken to us about it, he hasn't said anything. I just hope that no [establishment] owners take action, because the new law is bad for all of us.”

“No one wants a disaster in the gastronomical society,” said Burgos. “Where can you find another situation where chambers of commerce, government, workers, unions and employers can all agree that something isn't right?”


More Regional News

Drought Will Hit Communities with Water Shortages

Starting now, several communities in the Canton of Nicoya will have to have patience as water rationing will be the order of the day since this past rainy season left a 25% shortage of water, according to Water and Sewer (AyA—Acueductos y Alcantarillados).

Increase in Crime with Return of Tourists

During the first 15 days of November, the beginning of tourist season, the tourist police reported an increase in the number of crimes against property. At the same time, Jeison Vargas, tourist police chief in Guiones, assured that this is what the tourist police are here for and that they are visiting the area businesses every day.

Costa Rica Scores More or Less On Corruption Index

Costa Rica ranks 48th in Transparency International’s 2012 Corruption Perceptions Index (CPI) which measures perceived public sector corruption in 176 countries. Costa Rica’s score in the 2012 survey is 54 on a scale of 0 (perceived to be highly corrupt) to 100 (perceived to be very clean).

Thieves Steal Boat Engine in Garza

On the morning of Monday, November 19th, Juan Rafael Hernandez Salguera (known as Juan Mora) of Garza received a phone call that his boat was missing. The anchor had been cut.

Archeologists Didn’t Find Indian Remains in Front of Colonial Church

Nicoyans have expressed divided opinions over the construction of a new plaza in front of the Colonial Church. One of the concerns manifested by some is about the existence of indigenous remains en the area where they are moving earth. 

Water May Cause Illnesses in Nosara Schoolchildren

On November16th, Serapio López School filed a complaint with the Ministry of Health after several children had health problems, apparently caused by water consumption in their facilities.


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