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We have purchased a B&B and have been fortunate enough to find a Tico family to live there and run it for us (they are actually losing their own home). It’s 5 bedrooms with seperate living quarters for the family (Husband, wife and 2 children). Has anyone done this before? Does anyone have any suggestions on how to appropriately compensate this family? Thanks in advance for any advice!
This family has experience in managing a B&B?
Have you been to the home that they are “losing?”
I can only assume that since you have not yet finalized their compensation, that you also do not have a formal legal contract with these people to officially employ them to manage your home/B&B yes?
Do you have a contract of any kind set up with them now?
You are officially planning on paying all the employee contributions that you are legally obliged to pay, yes?
You need an attorney, and you need one fast.
Scott Oliver – Founder
WeLoveCostaRica.comPlease, please reread Scott’s last sentence. The Costa Rican labor laws are very, very specific. They dictate what each and every occupation’s minimum wage is. They dictate matters of hours of work, overtime, overtime pay, etc. They provide for withholding for Social Security and (probably) income taxes. They specify a formula for determining the value of housing and meals, if those are included as part of compensation.
The labor laws also dictate matters such as vacation time, annual bonuses, holidays, terms under which an employee may be fired (regardless of grounds), etc.
You’ve got to have excellent, knowledgeable direction about how to deal with all these matters.
You will also need to address the matter(s) of business licenses, collecting and submitting the required taxes, paying your own income taxes both in Costa Rica and in the United States, etc.
May I please jump in, we opened our B&B at first very private, we did not advertise much and we used the help that we had for our normal household and garden. We wanted to test the waters out before we made any committment. That means we did not have any signs up pointing anyone to our place as a B&B. We knew to do that we would have to get the proper license. Our offer for accommodations went out to mostly people we knew or people we had gotten to know. We did not want to cause a rumble in the local community because we really had not decided that this is actually what we wanted to do. The one thing we did do first was to get a lawyer and we took his advice. We had contracts made for each one of our workers. We hired them as professional contractors and paid them almost 35% more then the quoted minimum. Plus we added on benefits as well, we gave them the option of having us to pay their Security Social as an employee and working as an employee or working as a professional. That professional knows what the job is about, needs no supervision, and promises to committ to getting the work done. You set no hours and you do not supervise a professional. This way the worker actually profits and his social security needs are taken care of. He provides us with information saying he is paying social security. Our contract is signed and the contractor agrees that he is aware of the conditions and agrees. Our contracts are made up every year.
We did this through a lawyer, legal contracts are renewed every year. We pay everything required, our contractors have vacation paid and the Christmas bonus. We pay double time for working holidays or more the 5 days a week. We have currently a pension benefit package for our contractors that they can take with them if they are no longer working here.We have gone above what the law requires and have added benefits. We built confidence in our workers. Otherwise a worker based on the law can be worked up to 12 hours per day 6 days a week at minimum pay. That is about as close to slave labor as you can get. When you do that then you have angry workers that may steal from you. Not because they are thief but because they have a need.
We are currently licensed, but we still do not put up signs. We have made a decision to continue to be private. The keeps away the traffic that we find undesirable. We have an accountant who does our paper work for us and collects taxes.
At first the fear was if we had to include taxes our guest would look for other places. Well our business has improved and is getting stronger every day. Costa Rica does have it’s laws and you should obey them as closely as you can. Licensing is not difficult and if we would have known how easy it was we would have licensed immediately. Costa Rica is like any other country, they are looking for more taxes. The expense of an attorney and peace of mind is well worth it for operating your business.
You need people who will work for you that are honest, good workers and dedicated. Building a bridge of confidence in your workers is so very important.
If you want information on actual operation of your B&B here in Costa Rica, I do not know everything but the things that I know, are for sharing.
Sorry, I could not read your question. My answer is way off base. I have no experience in running a business here in Costa Rica and being absent.
Sorry about that
You did give them some great advice that they neeed to hear Jenny – thank you
Scott Oliver – Founder
WeLoveCostaRica.comThank you Scott, there is so much potential here for quality businesses. Good accommodations in Costa Rica are not plentiful, we have many accommodations but they are not the quality they should be.
A quality B&B can be very successful, this is the begining of the boom. Those who get in first and do quality business will build a reputation that they can enjoy the fruits of in years to come.
Thank you so much for all your helpful responses. We do have a lawyer and we will use him, but he handles all our real estate issues, should we find a lawyer that specializes in employment issues? And, yes, we do want to follow all of Costa Rican laws.
Wish you a lot of success. It is a great business and you meet some very special people. Attitude is 99% of your success or failure.
Hi Jenny,
It sounds like you are paying a lot for your employees. Is your B&B profitable? How many rooms do you have?That is one thing I like about Costa Rica. They have made provisions for their workers. Not as in the US the workers get nothing. We could be paying our maid service 4,000 colone per day and working them 12 hours a day. That is the law, you can work them for a maximum of 12 hours.
We came here with no agenda, our goal at this stage of life is to enjoy life. It is important that the people around us are able to feed their families. We have added benefits because they have been with us for a couple years and it does not seem as if they will be working for anyone else any time soon. So we want them to have the benefit of giving us those years of good service.
Our contractors are happy to come to work and it has worked for us. They have helped us build a reputation and we have many returning guest. Our guest are comfortable, they dont have the fear of being robbed. We have had guest leave money in the rooms and return to find it where they left it. You get that from people who are able to feed their families. It is very tempting to steal when you are unable to feed and cloth your family.
Yes, we are begining to get profitable. We could have been more profitable if we would not have selected to only be known word of mouth or from the internet. We made a decision not to post signs. It pays in the long run, we dont have people stealing towels and other things. Our quality of clientel is better and therefore it minimzes problems.
We have time to grow our business and guide it in the direction we want it to go. It is just what you make it and what you have in mind.
We are treating our contractors this way because of our investing in them for what our business is going to be. We are building relationships in hopes that we will profit and those we have working for us will also profit.
Yes we are able to pay the bills and make changes. Our first 4 years have been totally reinvesting into our business. We are looking at adding more accommodations here at the guest house in another year. This year was the first year we had to turn guest away. Our business has grown so we have leased three houses and furnished them for vacation rentals and for our over flow. Praise God we had overflow this year.
To me a business is a hands on operation and in order to be profitable you have to have a passion for the business. You have to find something that makes your B&B different then others.
For us it is our breakfast,service, and clean facilities. We are not the fanciest, we do not have a swimming pool, nor are we the cheapest.
You have to find your passion for this business. Anyone can open a B&B and offer people a place to stay. There are a lot of them around.
If you want to enjoy Costa Rica the easier you make things the more comfortable you will be. Profit may take some time but if you are consistant and run a good operation the business is there.
Currently, in the US houses are not selling, so today we are seeing more visitors that are coming for a few weeks to check Costa Rica out.
We have been through many cycles in these few years. In Costa Rica things change rapidly so you are always having to stay sharp and keep updated on events that would effect your business.
Forgive me for being long winded.
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