Bolivia Employment Guide

Navigating Employee Termination in Bolivia: A Guide for Global Employers

Terminating employment in Bolivia requires careful adherence to local labor laws and regulations. The process must be managed collaboratively between the employer and key stakeholders, often involving specific procedures and potential additional costs to ensure full compliance.

Permissible Grounds for Termination

In Bolivia, employment termination can be complex. Legally compliant termination scenarios include:

• Voluntary resignation by the employee
• Termination with just cause, such as:
  • Intentional significant damage to company property
  • Breach of confidentiality or disclosure of trade secrets
  • Material violation of employment terms
  • Theft or fraudulent activities
• Expiration of a fixed-term contract

Employers should note that Bolivian law mandates a legal fee of approximately $115 for processing termination documents, which require handwritten signatures and approval via an in-person appointment at the Ministry of Labor. If the employee resides outside Santa Cruz, travel expenses may also apply.

Notice Period Requirements

While Bolivian labor law does not stipulate a statutory notice period, it is common practice for employers and employees to mutually agree on a notice period ranging from 30 to 90 days.

Severance Pay Entitlements

Employees in Bolivia are entitled to severance pay under specific conditions, such as voluntary retirement after five years of service or dismissal without just cause. The severance is calculated as 30 days' wages for each full year of service.

To mitigate unforeseen financial liabilities, SailGlobal incorporates severance accruals into all employment agreements in Bolivia. With extensive experience in managing global litigation risks, SailGlobal’s accrual calculations are based on statutory requirements and local best practices. If an employee resigns or is ineligible for severance, any unused accruals are refunded to the client.

Case Study: Managing a Termination in La Paz

Consider a multinational company that needed to terminate an employee in La Paz due to restructuring. By partnering with SailGlobal, the employer navigated the mandatory Ministry of Labor appointment, managed the $115 legal fee, and processed severance accurately—avoiding penalties and ensuring a smooth transition.