Having a Solidarian Association (Asociación Solidarista) within a company is widely regarded as an important employment benefit in Costa Rica. For many candidates, the existence of such an association is a key factor when evaluating job opportunities, and it is often one of the first questions raised during recruitment processes. Employers frequently find that offering this benefit enhances their ability to attract and retain talent, making their hiring processes more effective.
For companies operating in Costa Rica with at least twelve employees, the creation of a Solidarian Association can be an important consideration. These associations are not labor unions. Instead, they are organizations based on cooperation between employees and employers, designed to promote solidarity and provide benefits to workers, rather than to advocate against employers.
Solidarian Associations are composed exclusively of employees. Members contribute a percentage of their salaries, which the Association manages and invests. The resulting earnings are distributed among the members. In addition, employers contribute a minimum of one percent (1%) of each affiliated employee’s salary. These employer contributions are treated as a severance reserve fund, which is paid to employees upon termination of their employment.
Under normal circumstances, severance is only paid when an employee is terminated without cause. However, when a Solidarian Association is in place, affiliated employees are entitled to receive the accumulated contributions made by the employer during their period of affiliation. While there may be cases where an additional amount is required, this structure generally provides a financial mechanism that benefits both employees and employers.
Beyond this, Solidarian Associations often provide additional benefits to employees. These may include access to credit, negotiation of preferential terms with service providers, and the organization of social and community activities. For employers, contributions to the Association are considered a deductible expense for income tax purposes, and the existence of the Association can contribute to employee satisfaction and retention.
The process of establishing a Solidarian Association requires the participation of at least twelve employees, who must meet in an assembly to approve the bylaws and appoint a Board of Directors. The corresponding documents are then formalized and filed before the Ministry of Labor. Once registered—typically within four to six weeks—the Association can begin operations, including opening bank accounts and managing funds. An annual general assembly is required, during which the Board reports on financial and administrative matters and members receive their corresponding earnings.
Although the process may appear straightforward, it should be handled carefully to ensure proper structuring and compliance with applicable regulations. At Lang & Asociados, we assist clients in understanding the legal implications of Solidarian Associations and in implementing them effectively as part of their employment and organizational framework.