Hiring in Honduras

The contract sets out role, salary in HNL, working hours, leave, notice and confidentiality terms. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Spanish is the legal contract language. A bilingual version works for commercial roles, but the Spanish text is the one a labour court will read.

Fixed-term contracts are reserved for genuinely temporary work and capped at 12 months. A permanent role on a fixed-term contract is treated as indefinite, so most EORs default to indefinite terms.

Set probation from day one. A shorter probation can be extended, but never beyond 60 days in total.

From day 61 the employee has full job-stability protection. Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at a 25% premium in the day and 50% at night. Night shifts are capped at 6 hours a day and 36 a week.

Overtime is not tied to an earnings threshold, so professional hires are not automatically outside it. Put the hours and any overtime position in writing either way.

Leave steps up to 12 days after year two and 15 after year three. Three of the public holidays are grouped into Morazán Week in early October, so plan delivery dates around it.

Sick pay is shared: the employer covers the first three days, then the IHSS pays 66% of salary up to its ceiling. Maternity leave runs 84 days at the same IHSS rate, with the employer making up the difference, so confirm which side the EOR carries.

After probation, dismissal without a justified cause triggers notice pay and full severance, and a court can order reinstatement. During notice, the employee is also entitled to one paid day a week to look for work.

Since 2024 employers pay 4% of salary into each employee's Labour Reserve Fund, and the balance is offset against severance on dismissal. The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, pro-rated 13th and 14th month salaries, unused leave and severance net of the reserve fund. Keep a documented reason.

Private medical cover and group life are common for professional roles even though they are not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add up to 13.7% on top of gross salary, falling as pay rises because the IHSS and reserve fund ceilings are low. That is before the EOR fee.

The 14th month is the trap. Employees receive a 13th month salary in December and a 14th in June, so a year costs 14 salaries, not 12. Both are pro-rated on exit, so build them into every offer and every termination.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the national workforce quota applies to the sponsor, not to you. At least 90% of its staff must be Honduran and receive at least 85% of total salaries.

Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. A draft data protection bill has stalled in Congress for years, so the position may change.

Your home-country rules still govern what you send to the EOR. Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation takes a few weeks on paper, but the tax ID needs a legal representative with Honduran residency, which is where most timelines slip. The running cost is the point: accounting, municipal permits and monthly IHSS, RAP, INFOP and tax filings set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.