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Undoubtedly, payroll is a critical process for any organization. The pay cycle in Honduras refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Pay frequency in Honduras is usually bi-weekly or monthly. The payment of salaries is stipulated in the employment contract and may vary depending on the type of work carried out.

Full-time employees should receive both a 13th-month salary payment to be paid out as a Christmas bonus in December and a 14th-month salary payment in July. Each payment is equal to one month’s salary.  

The minimum wage in Honduras varies depending on the industry and the number of employees. However, the average is around $450- $500 (HNL 12071.34 - 10864.20) monthly.

All work exceeding standard working hours is to be paid as overtime and is regulated by employment contracts/collective agreements. When an employee is requested to work overtime or work on holidays, a particular limit is set, which equates to 12 hours per week.

All overtime hours more than 44 hours a week are paid at an overtime compensation rate. This rate is 137.50% of the employee’s regular salary. Overtime hours performed on a rest day are compensated at 200.00% and 125.00% for additional hours worked during the night.

Document retention in Honduras is as follows:

Companies must keep accounting books as long as they are in business and for five years after liquidation.

Supporting documentation related to transactions can be destroyed when the statute of limitations for legal actions elapses.

Tax law: Taxpayers must retain accounting records that are relevant for tax assessment for five years for taxpayers registered in the National Tax Registry and for seven years in other cases.

(Employment contract) Contract law: The general statute of limitations for legal actions related to commercial matters is five years, but a 2-year limitation period applies in some situations.

The Labor Code of Honduras protects workers from discrimination on the basis of sex, race, political stance, religion, and economic status.

However, the code doesn’t forbid discrimination on the basis of sexuality or gender identity. While the labor code doesn’t forbid gender discrimination, it does stipulate special rules for women who are pregnant.

There is no legal requirement for the documentation that has to be asked of a future employee. However, most companies request for resumes, signed offer letters, work contracts duly signed, photocopies of identity cards and tax identification numbers, police and criminal records, copies of driver´s licenses, study and labor certificates listed in resumes, and confidentiality agreements.

The probation period cannot exceed 60 days. This period will be remunerated, and if, upon termination, neither party expresses its desire to terminate the contract, it will continue indefinitely. The trial period must be stipulated in writing, and otherwise, the services are understood to be regulated by the general rules of the employment contract.

There are 11 public holidays in Honduras.

• Jan 1: New Year
• Apr 6: Maundy Thursday
• Apr 7: Good Friday
• Apr 8: Holy Saturday
• Apr 14: America Day
• May 1: Labor Day
• Sept 15: Independence Day
• Oct 3: Morazan's Day
• Oct 12: Colombus Day
• Oct 21: Army Day
• Dec 25: Christmas Day 

Sick leave starts from the third day of sickness. Employees are entitled to up to 26 weeks of sick leave per year, which can be extended up to 52 weeks. Pay is 66% of the average of the previous three months or 100% if the employee is hospitalized and has no dependents. Pay is split equally between the employer and social security.

Mothers are entitled to 84 days (12 weeks) of maternity leave, which can begin 42 days before the expected due date, and ends 42 days after the baby is born. The mother is entitled to 100% of the average of the previous three months’ wages.

The Daily Subsidy will be equal to sixty-six percent (66%) of the reference monthly base salary, according to the ceiling of the corresponding Regime.

The employer will pay the difference to complete the total salary earned by the worker. If a mother is not covered by social insurance, the employer must provide maternity leave.

The employer can grant leave to the worker so that he can fulfill the obligations of a public nature imposed by law, in case of serious domestic calamity duly verified, to carry out union commissions inherent to the organization or to attend the funeral of their colleagues, provided that they notify the employer or his representative in due time and that, in the last two (2) cases, the number of those who are absent is not such that it impairs the operation of the company; but the employer is not obliged to recognize for these reasons more than two (2) days with salary in each calendar month and in no case more than fifteen (15) days in the same year.

The employer can grant leave to the worker so that he can fulfill the obligations of a public nature imposed by law; in case of serious domestic calamity duly verified to carry out union commissions inherent to the organization or to attend the funeral of their colleagues, provided that they notify the employer or his representative in due time and that, in the last two (2) cases, the number of those who are absent is not such that it impairs the operation of the company; but the employer is not obliged to recognize for these reasons more than two (2) days with salary in each calendar month, and in no case more than fifteen (15) days in the same year.

Employees can take additional leave indefinitely for personal purposes, but it would be unpaid.

The notice period is determined by the length of employment:

• Less than three months – 24-hour notice  

• More than three months but less than 6 – 1 week’s notice 

• More than six months but less than one year – 2 weeks;’ notice 

• More than one year but less than two years – 1 month’s notice 

• More than two years – 2 months’ notice. If the contract is for an indefinite period, either party can terminate it by giving the other notice.

During the term of notice, the worker who is going to be fired is entitled to a paid leave of 1 day each week so that he can seek a new job. The notices can be omitted by either party, paying the corresponding amount to the other. The worker guilty of not having given the notice without complying with the legal requirements will be obliged to pay the employer an amount equivalent to half of the salary that corresponds to the term of the notice.

If the notice is not given by the employer, he will be obliged to pay the worker an amount equivalent to his salary during the term of the notice.

Employees who are dismissed for unjust cause or indirectly dismissed (article 114 of the Labour Code) have two options

• They can either request for full severance pay, which includes besides the aforementioned acquired rights, but also the notice period and the unemployed assistance pay;
• Or, they can request their reintegration to their prior position.

Employees that have worked for 15 years or more for the same company, will have the right to a 35% of unemployment assistance even if they decide to voluntarily terminate the contract (if they resign)

Honduras’s immigration laws provide several options for foreign nationals seeking to travel to the country for business or work.

Visa-exempt nationals can travel to Honduras without an entry visa and remain for periods of up to 30 days. Depending on the country of citizenship, visa nationals entering Honduras for business visits must obtain either a Consular Visa (Visa Consular) or a Consulted Visa (Visa Consultada ). Both types of visas are requested directly at a Honduran consular post; however, the Ministry of Foreign Affairs in Honduras must issue its authorization before the Honduran consular post can issue a Consulted Visa.

Both visa-exempt and visa nationals can apply to extend their business stay in Honduras for up to 90 additional days for a total of 120 consecutive days; however, foreign nationals who make multiple visits to Honduras for separate business visits are allowed a maximum cumulative stay of 180 days within 365 days.

Generally, foreign nationals can perform work activities without work authorization if their intended stay is less than 30 days and they do not receive remuneration or payments from a Honduran source. Foreign nationals who engage in remunerated work activities in Honduras must obtain a Special Stay Permit with Work Contract. The Special Stay Permit is valid for a minimum of one year, and at the authorities’ discretion, may be issued for a maximum of five years. After five years of holding a Special Stay Permit, the foreign national must apply for temporary residence.

A reference and background check is a must in Honduras. It needs to be in writing that the prospective employee consents to the same. Reaching out to previous employers and companies and a basic financial and criminal check is essential.