Statutory Employee
A statutory employee is defined by the Prospera Labor Statute as a natural person who is paid by an employer to work under all of the following conditions:
On a schedule determined by the employer or its delegate
In a primarily ministerial manner determined by the employer or its delegate;
Primarily by utilizing tools, equipment, furnishings, vehicles or premises required to be used, and furnished without charge to the employee, by the employer or its delegate; and
Without owning or controlling 2% or more of the ownership in the employer, if the employer is a legal entity.
If one or more of these conditions are not met, the individual may be considered an independent contractor or a non-statutory employee.
Non-Statutory Employee
A non-statutory employee is an individual that does not meet the conditions of a statutory employee but is still paid to work for an employer. Some examples would be natural persons who apply independent, professional or expert judgment, or someone without a fixed schedule. Non-statutory employees are not required to be given the benefits in the Próspera Labor Statute (Próspera Labor Premium, Próspera Labor Benefit, and Próspera Overtime Requirement). If you plan on hiring a non-statutory employee, it is recommended to explicitly state this in the contract.
Regulated Industry Person
A Regulated Industry Person is a natural person who applies or should apply independent, professional or expert judgment in an occupational field or service line that is characteristic of what Prospera law deems a Regulated Industry. In general, statutory employees will not be deemed Regulated Industry Persons because they usually do not apply the necessary independent, professional or expert judgment. Próspera law defines Regulated Industry to include:
Agriculture, Construction, and Food Industry
Finance and Insurance Industry
Health Industry
Energy and Manufacturing Industry
Mining and Subsurface and Waste Management Industry
Private Security
See: Regulated Industries
Exempt Employees
Exempt employees are not required to be paid the Próspera Labor Benefit Fund, Próspera Labor Premium, and Próspera Overtime Requirement. However, they may still be subject to the national law requirements relative to hiring Honduran nationals. An Employee is considered Exempt if they meet any of the following criteria:
A member of the immediate family of the employer or a natural person who controls or has a majority ownership interest in the employer.
An Intern
An Entry‐Level Hire (no previous work experience in the trade, industry or profession of the Employee’s Employer)
A Small Business Hire. This means an Employee who works for an Employer that employs no more than ten (10) natural persons who are Employees or full‐time contractors and has annual gross revenues with a value of less than $1,000,000.00 U.S.
Próspera Labor Premium
Every Employer that is a Resident or (e)Resident must pay each statutory employee an amount not less than the Honduran minimum wage plus the Próspera Labor Premium.
The Próspera Labor Premium is as follows:
10% of the Base Minimum Wage;
or 25% of the Base Minimum Wage if the statutory employee signs a written acknowledgment provided by the Employer that the Employer is not required to furnish the statutory employee with any benefit, such as “13th and 14th month” compensation.
The option you select will impact the contribution percentage to the Próspera Labor Benefit Fund explained below.
Próspera Labor Benefit
Every Employer that is a Resident or (e)Resident must establish and fund a trust account for the benefit of each qualifying statutory employee.
Each Employer shall fund the trust account on a quarterly basis in an amount deemed the “Próspera Labor Benefit” that is equal to either:
10.0% of the gross compensation paid for work performed in Próspera to such Employee in the immediately preceding quarter provided the statutory employee meets the requirements of the 25% Próspera Labor Premium (or otherwise receives compensation in excess of such premium) and previously signed a written acknowledgment provided by the Employer utilizing a GSP‐approved template that the Employer is not required to furnish the statutory employee with any benefit, such as “13th and 14th month” compensation;
Or 25.0% of the gross compensation paid for work performed in Próspera to such statutory employee in the immediately preceding quarter if the statutory employee did not previously sign a written acknowledgment provided by the Employer utilizing a GSP‐approved template that the Employer is not required to furnish the statutory employee with any benefit, such as “13th and 14th month” compensation.
The contributions held in the required trust account(s) are known as the “Próspera Labor Benefit Fund”.
Próspera Overtime Requirement
No Employer may require any statutory employee to work in excess of forty‐eight (48) hours nor more than six (6) days in any seven (7) day period without paying a premium for such overage time which is equal to 125% of the consideration that would be owed to the statutory employee if the work was performed within the foregoing hourly or daily limits.
Labor Unions
The Próspera labor code allows for the formation of unions as easily as corporations. Unions can serve a valuable purpose in training, quality control, and adding bargaining power to a labor relationship. They can be freely organized, potentially more freely than anywhere else in the world. However, Próspera is against monopolies, cartels, and efforts to use factors other than merit, performance, and quality as the basis of exercising market power. Closed shop agreements, where a union can be the only union for a company and prohibit the company from hiring outside of the union, are not prohibited but are presumptively unenforceable. The burden of proof is on the union or the employer to prove that such an agreement is not unreasonable, overreaching, or inequitable. Unions are also not allowed to trespass for protests, which must be peaceable and conducted in public ways or designated areas. Violence and violations of property rights are not tolerated.
At-Will Employment
At-will employment is a type of employment relationship where either party may terminate the relationship with or without cause. This is unless the right to do so is limited by a statute, other law or public policy, or an agreement between the parties, a binding employer promise, or a binding employer policy statement. In Próspera, at-will employment is recognized and is the default setting for employment relationships, meaning an employer or employee can terminate the relationship for any reason or no reason. However, even in at-will employment, both parties owe a nonwaivable duty of good faith and fair dealing to each other.
Small Business Hire
An Employee who works for an Employer that directly or through any affiliate by majority ownership or control both:
Employs no more than ten (10) natural persons who are Employees or full-time contractors.
Has annual gross revenues with a value of less than $1,000,000.00 U.S.