Find great talent everywhere you go! Located in Central America, Honduras is a vibrant country with a young population hungry for opportunities. The large local demographic of working-age adults is a gold mine for finding young, dynamic, and highly skilled professionals.
However, when looking to hire in another country, many legalities must be researched and considered. Everything from ensuring global compliance to offering your new hires the minimum wage in Honduras can be complicated and lengthy.
This is where an Employer of Record (EOR) becomes your best friend. An EOR is ideal for companies looking to hire and pay talent worldwide without the legal hassle.
This article will walk you through the processes and advantages of hiring employees in Honduras through an EOR.
Why Hire Talent in Honduras?
Globalization has many benefits, one of them being access to global talent in countries like Honduras. From the reasonable average income in Honduras to the country’s high literacy rates and geographical convenience, it’s a no-brainer why businesses will want to start expanding to Honduras.
Here are a few reasons why hiring talent in Honduras can be a good idea.
Literacy Rate
Honduras offers a mediocrely educated population and a literacy rate of 88.1% in 2023. This educated country consists of many professionals with bachelor’s and master’s degrees. The value of education can easily be seen through the country's growing literacy rate.
From the many new graduates in key industries, a steadily growing economy, and its convenient geographical location, Honduras is becoming a great country for conducting business.
Geographical Convenience
Close to the luscious tropical rainforest of Guatemala, the clear blue Caribbean Sea, and home to ancient Mayan ceremonial sites and landmarks, the country of Honduras is very conveniently located for tourists, business owners, and all those looking to hire hardworking and skilled talent.
And if you have business in the United States or Canada, then not to worry because these two economically powerful countries are just a short flight away! In around five hours, you can travel from Honduras to Canada.
Real-Time Collaboration
Another advantage of hiring employees in Honduras is its time zone. For companies based in the US and Canada, Honduras hires can easily connect with their North American colleagues since the time zones match up nicely for both the east and west coasts.
Real-time collaboration allows companies to seamlessly integrate Honduran staff into their meetings and processes.
Added Language Benefits
Many Hondurans have close ties to the US and Canada, understand the culture, and speak fluent English. Plus, for companies working with the Spanish-speaking market, hiring bilingual employees in Honduras can be a huge advantage.
Salary Range
Notably, cost plays a significant role when hiring Honduran employees. Salaries remain well below the average salary of American and Canadian professionals. So, it’s a good opportunity to save on human resources expenditures while employing some of the global top talent.
The average Honduras minimum wage in USD is $330. While this may not seem adequate for those who live in parts of North America, in Honduras, this living wage can provide for a decent lifestyle in the rural parts of the country.
Professionals working in the medical (ie: surgeons, doctors, orthodontists, etc), aviation and government occupations (ie: lawyers, judges, etc) are paid higher than the average minimum wage and can easily afford a luxurious lifestyle.
How Can I Legally Hire an Employee in Honduras?
Things can get tricky if you want to legally hire talent in Honduras on your own. To compliantly hire talent in Honduras, you must set up a local legal entity. However, navigating Honduran labor laws and regulations can be challenging.
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside of the country you legally operate in. It will already have an entity set up and the legal framework in place to do the hiring for you. You, on the other hand, will manage the relationship with your employees.
Going through an EOR is possibly the easiest way to hire talent in Honduras without all the legal hassle.
What Does an EOR Do?
Simply put, EORs take care of the legal procedures while you manage your employees. The legal frameworks for hiring in Honduras can be quite different from those in the US and Canada.
EORs handle worker visas and work permits, minimum wages, employment contracts, payroll, local compliance, termination, and the various other aspects of HR and financial services.
For example, did you know that employers in Honduras must pay statutory thirteenth and fourteenth-month salaries? Or that both residents and non-residents must pay taxes on their local income? An EOR can assist in managing all of the details pertaining to compliance and so much more so you can invest your time in daily business operations.
Contracts and Documentation
An EOR will handle the tedious administration of preparing and collecting contracts and documentation. This includes employment offers, signed contracts, gross salary, banking information, etc.
Leave the tedious contract writing and creation to an EOR expert and ensure you meet all the requirements of an ideal employee-employer contract. When you leave the contract creation and documentation to the experts, you can avoid the risks of misclassifying your new hires.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive benefits like medical, health insurance, dental, vision and life insurance, and retirement savings plans. A comprehensive EOR will have those benefits built into its service offering.
When you create a global benefits strategy catered towards the unique needs of your employees, you can attract and retain top industry talent. An EOR can successfully create this package for you since they are experts on the country you plan on expanding into and will also have local insight into the demands and requirements of those employees.
Vacation and Public Honduras Holidays
In Honduras, full-time employees are entitled to ten days of paid annual leave for their first year of employment. This number gradually increases to twenty days after four years. There are also several other types of leave to consider, such as maternity leave and sick leave. An EOR can keep track of all this and the corresponding payments for you.
In addition, Honduras has many statutory holidays that companies are obligated to provide to their employees.
Here’s a list of all the statutory holidays employees are entitled to:
- January 1: New Year’s Day
- March/April (Varies): Thursday, Friday, and Saturday before Easter Sunday
- April 14: Pan American Day
- May 1: Labor Day
- September 15: Independence Day
- October 4 to 7: Morazánica Week
- December 25: Christmas
Leave Entitlements
Apart from the various statutory holidays, employees in Honduras have a few other reasons why they can take time off work. They are entitled to sick leave, maternity leave, bereavement leave, duty leave, as well as any other time off sanctioned by the region's leave laws.
In Honduras, female employees are entitled to up to ten weeks of maternity leave, of which four weeks are taken before birth. When a mother is on maternity leave, she receives 66% of her average earnings. In the unfortunate event that there is pregnancy or delivery-related illness, the female employee is entitled to another three months of paid leave.
Additionally, employees in Honduras are entitled to up to six days of paid leave to perform their union duties. When an employee is requested for their judicial summons, the employers must provide them with half a day of leave.
Under the bereavement leave policy, employees are entitled to up to three days of paid leave when an immediate family member has passed away.
Taxes
Employers in Honduras pay a range of taxes and social security contributions, which amount to just over 15% of an employee’s salary on average. They must contribute to public health insurance, retirement, severance pay funds, and worker compensation.
Managing taxation can be a tedious process, but it is necessary to ensure you are paying employees in a compliant manner. Thankfully, an EOR can handle the logistics and ensure that payroll is processed correctly and per the regulations in Honduras.
What Are Your Responsibilities When Working with an EOR?
While an EOR handles everything related to legal and HR processes, many aspects of the company’s workings fall under your purview. So, you take care of your staff like you would with your local hires.
That means search and recruitment, company onboarding, training, management, day-to-day communications, progress tracking, and so on should be managed by you, the employer.
While the relationship with the employee won’t be all that different through an EOR, you need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. You must consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Hiring Employees Through an EOR in Honduras?
Using an EOR to hire talent in Honduras will save you time, reduce costs, and mitigate risks.
Navigating the employment laws and regulations in Honduras can be time-consuming and complex. Since an EOR is already set up to hire employees in the country, it will be faster and easier to start hiring immediately. The process won’t differ very much from hiring locally.
Set-up and HR costs associated with independently hiring abroad can be quite high, so going through an EOR can save you money. The average monthly salary in Honduras in USD can range anywhere from $330 to $860 depending on the size of the company and the industry. This means that you’ll see significant cost savings in HR expenses compared with the US and Canada.
Most importantly, though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience navigating complex employment and tax laws and regulations, you won’t have to worry about any issues arising.
How Do I Choose the Right EOR for Me?
When it comes to choosing the right EOR for your company's unique employment needs, there are a few key things to consider when you are selecting an EOR in Honduras.
- Local Experience: Does the EOR have experience hiring in Honduras? One of the biggest advantages of hiring an EOR is the assurance of compliance. Often, this requires a lot of experience, so check the EOR’s track record in the country.
- Service Scale: Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, you may need to offer them benefits like insurance and other welfare. Some EORs have systems in place for this, but others may not. Also, certain EORs will offer consulting services to optimize your global hiring practices.
- Data and Systems Security: Protecting intellectual property in a remote working environment is critical. Ensure your vendor of choice has a specific agreement outlining how they plan to keep your sensitive information safe and secure.
- Collaboration: Ensure your vendor’s approach to communication and client collaboration is aligned with your organization’s approach. Prefer having a quick and easy point of contact? Perhaps all you need is access to a Slack channel to quickly reach your vendor. Whatever your communication style, ensure your vendor can meet your needs.
Borderless: The Employer of Record Your Company Needs
Need an EOR? Look no further than Borderless. We can help you hire employees in Honduras – giving you access to a highly skilled talent pool without the headaches of traditional global expansion.
Whether you are looking to grow your team, engage with talented professionals, or simply want to expand to a bigger market, Borderless can assist you in maintaining compliance in over 170 countries.
Now you can onboard, manage, and pay your international team while remaining compliant with local labor laws thanks to Borderless’ all-in-one platform solution.
Speak to us today and see how we can help you quickly and easily hire, onboard, pay, and retain the Honduras-based talent your organization needs.
