The Legislative Assembly approved, in second debate, the bill reforming Law No. 9986 (File No. 24.547), which amends subsection f) of Article 14, amends subsection r), renumbers the subsequent subsections of Article 119 and amends the final paragraph of Article 119, thereby strengthening the labor, social security and occupational risk obligations applicable to bidders and contractors of the Public Administration.
Some of the most significant changes are:
- The reinforcement of obligations related to the CCSS, FODESAF, the INS and other labor and social security charges.
- The introduction of a specific sanction ground for noncompliance related to wages, the Christmas bonus, working hours, occupational risk policies and contributions to entities such as the CCSS, INA, FODESAF and IMAS.
- The possibility that such noncompliance may lead to the exclusion of a bid during the tender procedure or even to contract termination during the performance stage.
What does this mean for companies?
This reform reaffirms a clear trend in Costa Rican public procurement: labor and social security compliance is no longer a purely operational matter and is becoming a determining factor in accessing, maintaining and carrying out business with the State.
Organizations that take part in public procurement procedures should review their compliance models, internal control mechanisms and oversight processes for contractors and subcontractors to identify risks and ensure timely fulfillment of their legal obligations.
From our Public Law and Public Procurement practice, we believe this reform will require companies to strengthen their compliance programs and take a more preventive approach to contractual risk management. Properly identifying and mitigating labor-related contingencies will become increasingly important for preserving eligibility in public tenders and ensuring the continuity of government contracts.
If your organization participates in tenders or carries out contracts with public entities, our team of specialists at BLP is trained and up to date to support you in assessing risks, verifying compliance and designing strategies to adapt to this new regulatory framework.