Bolivia Labor Law Guide for Hiring Employees and Contractors
Bolivia, a Latin American country, has a population of approximately 12 million people as of 2023. It has an economy that has shown steady growth in recent years.
In 2023, the Bolivian economy was primarily driven by key sectors such as natural gas, mining (particularly silver, zinc, and tin), agriculture (soybeans, coffee, and cocoa), and manufacturing. The country’s GDP reached an estimated $40 billion, reflecting its resilience despite global economic challenges.
The official currency of Bolivia is the Boliviano (BOB).
Minimum Wage
BOB 2,500 per month
Overtime Wage
150% of the regular hourly rate
Meal Breaks
1 hour
Rest Breaks
15 minutes
Working hours
8 hours/day, 48 hours/week
Salary Payment Cycle
Monthly
Payroll Taxes
Social security, Healthcare
Paid Vacation
15 days
Overtime Hours
After 8 hours per day
Night Shift Hours
130% of the regular hourly rate
Holidays
11 holidays
No Work Days
Sunday
Businesses intending to hire employees in Bolivia must register locally and establish a legal presence within the country. The cost of setting up a business entity varies, but it typically ranges from $2,000 to $5,000. The time to incorporate a business entity usually takes around 45 to 60 days.
Employers are required to sign formal employment contracts with employees. These contracts should include clauses covering job description, compensation, working hours, termination conditions, and confidentiality agreements. Bolivian labor law treats employees and contractors differently, with specific regulations governing each category. For instance, contractors are generally not entitled to the same level of benefits as employees, such as social security.
Bolivia has a national minimum wage law, and as of 2024, the minimum wage is set at BOB 2,500 per month. This wage applies uniformly across all sectors and regions within the country. There are no specific jobs or types of workers exempt from the minimum wage law, and no regional variations exist. Employers are required to pay holiday pay to employees for mandated public holidays.
The standard working hours in Bolivia are 8 hours per day, amounting to 48 hours per week. Overtime is compensated at 150% of the regular hourly rate and applies to any work beyond 8 hours per day. Night shift work, which typically occurs between 10 PM and 6 AM, is paid at 130% of the regular hourly rate.
The minimum age for employment in Bolivia is 14 years, and there are strict regulations against child labor. Employers are prohibited from employing minors in hazardous conditions or during night shifts.
Employers in Bolivia are required to deduct and contribute to several payroll taxes, including social security contributions, which are currently set at 16.71% of the employee’s salary. This contribution covers retirement, healthcare, and other social benefits.
Bolivia’s income tax system is progressive, and the applicable tax rates for 2024 are as follows:
Income Level (BOB) | Tax Rate |
0 – 30,000 | 0% |
30,001 – 60,000 | 13% |
60,001 and above | 25% |
Bolivian law mandates several types of leaves for employees:
Paid Vacation: Employees are entitled to 15 days of paid vacation after one year of service.
Maternity Leave: 90 days, with 45 days before and 45 days after childbirth.
Paternity Leave: 3 days following the birth of a child.
Sick Leave: Paid sick leave is available with a doctor’s certificate.
Adoption Leave: Similar to maternity leave, applicable when adopting a child under one year of age.
Mandated Holidays: Bolivia observes 11 public holidays each year.
Holiday | Date |
New Year’s Day | January 1 |
Carnival | February/March |
Good Friday | April |
Labor Day | May 1 |
Corpus Christi | June |
Independence Day | August 6 |
All Saints’ Day | November 1 |
Christmas Day | December 25 |
And others… | Various Dates |
Employers in Bolivia must provide a range of social security benefits, including retirement pensions, healthcare, and maternity benefits. Additionally, there are mandatory annual bonuses equivalent to one month’s salary, usually paid in December. Employers are also required to provide severance pay equivalent to one month’s salary for every year of service in case of termination.
Bolivia does not follow At-Will Employment laws, meaning employers must have just cause to terminate an employee. Acceptable reasons include gross misconduct, violation of company policies, or redundancy due to economic reasons.
The termination process requires providing a notice period, typically 30 days, and offering severance pay. Employees or labor unions can challenge terminations legally, and wrongful termination can lead to reinstatement orders or compensation.
Employers can legally terminate an employee under conditions such as reaching retirement age, mutual agreement, resignation, or documented poor performance. However, dismissals without valid cause are subject to legal scrutiny, often resulting in significant financial penalties for the employer.