Updated: Oct 1, 2019
"Without doubt, this law will strengthen Costa Rica’s investment climate under the modern work schemes that the fourth industrial revolution demands.”
Tara Vasdani writes for The Lawyer's Daily:
(September 27, 2019, 10:35 AM EDT) -- As a remote-first law firm, and passionate advocate for remote-work arrangements, I am thrilled to account on President Carlos Alvarado’s official signing into law of the work-from-home bill. Needless to say, in 2019, work-from-home arrangements foster access for businesses to wider talent pools, increase work-life balance for employees, reduce carbon emissions by eliminating commutes, slice the cost of overhead and just make plain sense. With its new law, Costa Rica will now permit telecommuting as an alternative work arrangement, for employees in both the public and private sector.
It is undisputed that the rise of the remote workforce is now more prominent than ever — and Costa Rica’s aim aligns with this rise by creating jobs for populations beyond the country’s urban neighbourhoods. Under the new law, employees of both private and public sector companies can work from “rural” or “out of bound” homes, without commuting to their offices.
Costa Rica's law sets the standards for the work-from-home arrangements, outlining the responsibilities and rights of both the workers, and their employers. It also succeeds at strengthening Costa Rica’s competitiveness in developing business and increasing foreign direct investment.
Suffice it to say that dialling into a conference call today on your way into work, or from home; taking a sick day, and working “just a little;” or simply logging onto your remote desktop over the weekend, is remote work. And chances are, your employment agreements or HR policies do not address even a smidge of your, or your employer’s, legal rights and obligations.
This new law was requested by multinational companies established in the country, to have a legal framework that provides certainty, flexibility and alignment with new employment schemes, all of which have been promoted by the Costa Rican Investment Promotion Agency’s (CINDE) to improve Costa Rica’s investment climate.
Employees can remotely perform all assignments required by their employer, without commuting, and according to Jorge Sequeira, CINDE’s managing director, telecommuting will boost employee productivity as well: “Without doubt, this law will strengthen Costa Rica’s investment climate under the modern work schemes that the fourth industrial revolution demands.”
Working remotely is an efficient strategy for companies to perform their processes and promotes strategies for attracting and retaining talent. Previously, I have written at length about the talent pools remote-first companies open their doors to, and the employee retention that goes hand in hand. CINDE reports that in 2018, 850 new jobs were created outside of the greater metro area of the capital San Jose, of which 600 were under the new method.
The new law is a voluntary agreement which comes into force based on agreement between the parties. It may be applied once an employee begins to work at a company or if he/she is already part of the organization. The law also outlines the rights and responsibilities of the workers and employers, much in the same way that I have created policies to insure illnesses and accidents which arise while an employee is working remotely.
The research also concluded that, if this law is applied to half of the employees whose profile allows them to work remotely, the greater metro area of San Jose would see 24,000 less vehicles per day, thereby reducing approximately 48 million annual litres of fuel, equivalent to more than 28,000 tonnes of carbon dioxide.
Finally, the Costa Rican government has stated that the effort is part of the government’s plan to reduce the unemployment rate which currently sits at just above 11 per cent.
In today’s accelerating Internet age, distributed workforces are quickly becoming the norm. The rise of our connectivity enables workers to work from anywhere, while discovering better work-life balance, which results in employee retention. For an employer, the costs associated with running a physical office will soon become too overpriced, and unprofitable.
The cost of employee turnover in the “job hopping” generation is far larger than most corporations and managers ever imagined. Replacement after an employee departs can cost up to two full years of that employee’s salary. Employees who work from home report much higher job satisfaction and, quit at half the rate of people in the office.
Today, Costa Rica has only brought itself ahead of a very real, and very upcoming curve. The ability to work flexibly has gone from being a “work perk” to a necessity in the 21st century.
In 2019, it is estimated that 85 per cent of North American office workers expect their employers to provide technology which allows them to work from wherever they choose — whether at their desk, from home, in a co-working space or at a coffee shop nearby.
In addition to lower attrition rates, remote work policies can make it easier to recruit new employees. This is especially true for millennials who today communicate using electronics, as opposed to over the phone, or in person.
In today’s business environment, it is obvious that opening up your office to remote work can widen your talent pool. Employees can live anywhere and still work for you.
Distributed and/or remote teams make a strong case for increased employee retention, which is the direct result of a remote employee’s better quality of life. Workers who work from home, or coworking spaces, statistically demonstrate greater happiness, more focus and dedication as a result of increased autonomy over their work and schedules and proven work-life balance.
Costa Rica has made the first step to recognition of change.
Tara Vasdani is the principal lawyer and founder of Remote Law Canada. Her practice centres on employment law, civil litigation and remote work. She has been featured in Forbes. She was the first Canadian lawyer to serve a statement of claim via Instagram, and you can reach her directly at firstname.lastname@example.org.