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New “Usury Law” Protects Employee Wages
New Legislation Enacted
Author: Marco Esteban Arias, Partner – BDS, Member of Littler Global
On June 20, 2020, an amendment to the Law for the Promotion of Fair Competition and Consumer Protection was published. This new law (No. 9859) has been called Costa Rica’s “Usury Law,” because it sets caps to the interest rates that banks and other financial entities may charge their clients for loans, credit cards, etc. However, a new article 44 Ter was introduced, which creates additional protections to employees’ salaries. Pursuant to this article, employees can request financial entities to deduct directly from their wages the monthly installments for any debts they may have, but it always requires an agreement between the employer, the employee and the bank/lender. Additionally, no entity may grant loans whose payment compromises the absolute minimum wage of any employee.
