Employer of Record in Bolivia

An Employer of Record, or EOR, is a company that helps you hire people in another country. If you want to build a team in Bolivia, you can use an EOR to act as the legal employer for your staff there. This means you don't have to set up your own local entity. The EOR takes care of all the local HR tasks, like payroll, taxes, benefits, and making sure you follow Bolivia's employment laws. Using an EOR like Rivermate simplifies your expansion and helps you hire talent quickly and legally.

How an Employer of Record (EOR) Works in Bolivia

Using an EOR is a straightforward process. You handle the hiring decisions, and the EOR manages the local employment logistics.

1. You Find the Talent You are in charge of recruiting and selecting the best candidate for your team in Bolivia.

2. The EOR Hires Your Candidate Once you choose someone, the EOR hires them through its local Bolivian company. The EOR creates a local employment contract that follows all Bolivian labor regulations.

3. Onboarding and Administration The EOR manages the entire onboarding process. They collect all necessary paperwork and register your new employee with the proper authorities.

4. Payroll and Benefits Management Your EOR handles all aspects of payroll, including calculating salaries, withholding taxes, and making social security contributions. They also manage employee benefits, ensuring you offer a competitive package that meets local standards.

5. Ongoing Compliance Bolivian labor laws can change. The EOR stays on top of these changes to ensure you always comply with the current rules. This is all managed under the guidance of Bolivia's Ministry of Labor, Employment, and Social Security (https://www.mintrabajo.gob.bo/).

Why use an Employer of Record in Bolivia

Using an EOR in Bolivia helps you grow your business faster and with less risk. It removes the legal and administrative burdens of international hiring, so you can focus on managing your team and achieving your business goals. An EOR gives you a simple way to enter the Bolivian market without getting slowed down by complex regulations.

• Avoid Setting Up a Local Company The biggest advantage is that you don't need to establish a legal entity in Bolivia. This saves you significant time and money.

• Stay Compliant with Local Laws An EOR has expert knowledge of Bolivian labor laws. This reduces the risk of non-compliance, which can lead to fines and legal issues.

• Hire Talent Faster You can hire and onboard new employees in a fraction of the time it would take to set up your own entity. This allows you to get your team working on projects quickly.

• Simplify HR and Payroll The EOR handles all administrative tasks, including payroll, tax withholding, and benefits management. This frees up your internal resources.

• Attract Top Talent By offering competitive, locally compliant benefits packages, you can attract and retain the best employees in the Bolivian market.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Bolivia includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Bolivia.

Hiring in Bolivia means navigating a unique set of labor laws and cultural practices. The workforce is protected by comprehensive regulations, so understanding your obligations from the start is key. With a growing market, Bolivia offers opportunities for companies looking to expand their teams. Success depends on respecting local employment standards and ensuring full compliance.

Employment contracts & must-have clauses

In Bolivia, you should always use a written employment contract. While verbal agreements can be legally binding, a written document provides clarity and protection for everyone. Contracts must be in Spanish and registered with the Ministry of Labor.

Indefinite contracts are the standard in Bolivia. Fixed-term contracts are only allowed for specific, temporary projects and cannot be used repeatedly for the same role.

Your employment contracts must include these key details:

• Full names and personal data of both the employer and employee.
• A clear job description and list of responsibilities.
• The type and duration of the contract.
• Salary, payment method, and how often the employee will be paid.
• Workplace location.
• Standard working hours.
• Start date of employment.
• Conditions for termination.

Probation periods

You can include a probation period in an indefinite employment contract. This trial phase allows both you and the new employee to assess the fit.

The maximum probation period is 90 days. During this time, either you or the employee can end the working relationship without needing to provide a reason or pay severance. Once the 90 days are over, the employee is considered permanent, and standard termination rules apply.

Working hours & overtime

Standard working hours in Bolivia are different for men and women. Men work a maximum of 48 hours per week, while women work up to 40 hours per week. The typical workday is 8 hours long, spread over six days.

Any work done beyond these standard hours is overtime. Overtime must be approved by the Labour Inspection authority and is limited to two hours per day. You must pay employees double their normal rate for any overtime hours worked. Work on public holidays is also paid at 200% of the regular salary.

Public & regional holidays

Bolivia celebrates a number of national public holidays each year. It is also one of the few countries where each of its nine departments, or regions, has its own separate public holiday.

Here is a list of the national public holidays:

Hiring contractors in Bolivia

Hiring independent contractors in Bolivia can give you access to specialized skills without the commitments of a full-time employee. However, you need to be careful about worker classification.

An independent contractor in Bolivia is governed by civil and commercial codes, not labor law. This means they are responsible for their own taxes and social security contributions. They typically use their own equipment, set their own hours, and can work for multiple clients.

Misclassifying an employee as a contractor is a serious risk. Bolivian authorities look at the actual working relationship, not just the contract. If a contractor is treated like an employee (for example, by having set working hours and using company equipment), they can be reclassified. This can lead to penalties, back taxes, and the requirement to provide all employee benefits.

An Employer of Record (EOR) helps you avoid these risks. An EOR legally hires employees on your behalf, taking on all the responsibilities for compliance with local labor laws. This includes managing payroll, taxes, and benefits, ensuring you can work with talent in Bolivia without needing to set up a local entity or worry about misclassification.

In Bolivia, handling compensation and payroll means understanding specific local rules. It’s not just about paying salaries. You need to factor in mandatory bonuses, social security contributions, and various taxes. The system ensures employees receive legally required benefits and that the government collects necessary revenue. Staying compliant is key to operating smoothly in the country.

Payroll cycles & wage structure

The standard payroll cycle in Bolivia is monthly. You typically pay employees once a month, often at the end of the month or within the first few days of the next.

Your wage structure must include several mandatory bonuses in addition to the base salary:

• Christmas Bonus (Aguinaldo): You must pay a bonus equivalent to one month's salary by December 20th each year.
• Second Christmas Bonus (Segundo Aguinaldo): This is a conditional bonus, also equal to one month's salary. You pay it only if the country's GDP growth is above 4.5%.
• Seniority Bonus (Bono de Antigüedad): This bonus is based on an employee's years of service and is calculated as a percentage of the national minimum wage.
• Profit Bonus (Prima): If your company makes a profit, you may need to pay an additional bonus.

Overtime & minimums

Standard working hours in Bolivia are eight hours a day, up to six days a week. Any work beyond these hours is overtime. You must pay overtime at double the normal rate. The government limits overtime to a maximum of two hours per day.

The government reviews and adjusts the national minimum wage annually. As of 2024, the minimum monthly wage is 2,500 Bolivianos (BOB). You must ensure all employee salaries meet or exceed this amount.

Employer taxes and contributions

As an employer in Bolivia, you are responsible for several contributions based on your employees' gross salaries. These cover social security, housing, and professional risk insurance.

Employee taxes and deductions

Employees in Bolivia also contribute to social security and pay income tax. You must withhold these amounts from their monthly salaries.

In Bolivia, employee benefits and leave are a mix of government requirements and extra perks offered by companies. The law provides a solid foundation of protections for workers. This includes things like time off, bonuses, and social security. Many companies, especially larger ones, offer more than the legal minimum to attract and keep good employees. Understanding these benefits is key to managing a team in Bolivia.

Statutory leave

Bolivian law provides several types of required leave for employees.

• Annual Leave Your paid time off increases with your years of service. You get 15 working days off after your first year. This grows to 20 days after five years and 30 days after ten years.
• Sick Leave If you get sick, you are entitled to paid sick leave. You'll need a medical certificate to prove you're unable to work.
• Maternity Leave Mothers get 90 days of paid leave. This is typically split into 45 days before the birth and 45 days after.
• Paternity Leave Fathers receive 3 days of paid leave following the birth of a child.

Public holidays & regional holidays

You get paid time off for national holidays. Some regions also have their own local holidays.

Typical supplemental benefits

Many companies offer benefits beyond what the law requires. Here’s a look at both required and common extra benefits.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be tricky. An Employer of Record (EOR) simplifies this process for you.

An EOR already understands Bolivia's labor laws and common practices. They handle the legal requirements and paperwork. This ensures you are compliant from day one.

They can also help you create a competitive benefits package. An EOR knows what local employees expect. This helps you attract and retain talent without having to become an expert in Bolivian benefits yourself. They manage everything, so you can focus on growing your business.

When an employment relationship in Bolivia ends, you need to follow a specific process. Bolivian labor law protects employees, so you can't just terminate a contract without a valid reason. The process depends on who initiates the termination and the reason behind it. You must handle offboarding correctly to avoid legal issues.

Notice periods

In Bolivia, if you, as the employer, terminate an employee without a legally valid reason, you pay them a special compensation called "desahucio". This payment is equal to three months' salary and acts as a substitute for a traditional notice period.

If you terminate an employee for a "just cause," like a serious breach of contract, you do not have to provide a notice period or the "desahucio" payment.

If an employee resigns, they are generally expected to give you notice. While the law doesn't set a single fixed period for all resignations, company policies often require 15 to 30 days' notice to ensure a smooth transition.

For other situations, notice periods can vary:

• Less than one month of work: 7 days' notice.
• Less than six months of work: 15 days' notice.
• More than one year of work: 1 month's notice.

Severance pay

When you terminate an employee without a just cause, they have two options. They can either ask to be reinstated in their job or accept a severance package. This severance pay is typically equal to three months' wages.

In general, severance pay is mandatory and amounts to one month's salary for each year of service.

How Rivermate handles compliant exits

Navigating employee terminations in another country can be complex. At Rivermate, we simplify the offboarding process for you. We make sure that every termination complies with Bolivian labor laws.

Here is how we can help:

• Compliant contracts: We draft employment contracts that clearly outline termination terms from the start.
• Process management: We guide you through the necessary steps for a lawful termination.
• Documentation: We help you document the reasons for termination, which is crucial if you are terminating for cause.
• Final payments: We calculate and process all final payments, including severance and any other outstanding benefits.

By handling these details, we help you avoid the risks of wrongful termination claims and ensure a fair and respectful exit process for your employees.

Getting the right visa and work permit in Bolivia is a multi-step process. You need to navigate rules set by both the Department of Immigration (DIGEMIG) and the Ministry of Labor. For anyone who is not a citizen or permanent resident of Bolivia, securing the proper documentation before starting work is essential. The government requires employers to prove that a role cannot be filled by a Bolivian citizen before hiring a foreign national.

Employment visas & sponsorship realities

To legally work in Bolivia, you typically need a Specific Purpose Visa to enter the country, followed by a work permit and a temporary residency permit. Your employer must apply for the work permit on your behalf.

An Employer of Record (EOR) can sponsor work permits for foreign employees, but there are limitations. Bolivian law restricts the number of foreign employees to 15% of a company's total workforce. This means sponsorship is often reserved for individuals with specialized technical skills that are not readily available in the local market.

Here are the common routes for employment visas:

• Specific Purpose Visa (Visa de Objeto Determinado): This is your entry ticket. It allows you to come to Bolivia for work-related reasons and is valid for 30 days. You must apply for this visa at a Bolivian consulate in your home country before you travel.
• Work Permit (Permiso de Trabajo): Your employer handles this application. They need to demonstrate to the Ministry of Labor that your skills are needed. The process for obtaining the permit can take between 30 and 60 days.
• Temporary Residence Permit: Once in Bolivia with your Specific Purpose Visa and approved work permit, you apply for temporary residency. This permit allows you to live and work in the country legally.

The type of work permit depends on the length of your employment:

Business travel compliance

For short-term business visits, you do not always need a full work permit. The Special Purpose Visa can be used for activities like consulting or short projects. This visa is initially valid for 30 days but can be extended up to 180 days.

It is crucial to understand that you cannot perform work activities on a standard tourist visa. While it is sometimes possible to convert a tourist or Specific Purpose Visa to a temporary residency and work permit from within Bolivia, you must stop all work until you receive the official authorization.

Always check the specific requirements at the nearest Bolivian consulate before you travel. Visa rules can change, and it's best to have the most current information.