Rules for some and not for others as Costa Rica’s INS admits firing pregnant workers and employees days from retirement. The INS case cuts in a completely different direction when you look at it from the perspective of a private business owner in Costa Rica, and the contrast is genuinely infuriating if you are sitting on that side of the equation.
When a private employer in Costa Rica wants to dismiss a worker for any reason, including legitimate operational restructuring of exactly the kind the INS claimed it was carrying out, the Labor Code places the full weight of the law on the employer from the moment of termination. If the dismissal is without just cause, the employer owes severance calculated on years of service, plus any unused vacation, plus proportional thirteenth month salary, plus any notice period not worked.
If the worker is pregnant or on maternity leave, the law presumes the dismissal is discriminatory, and the employer must either reinstate the worker or pay a penalty on top of all the standard severance. There is no grace period for discovering that a list was not so up to date. There is no committee that reviews the damage afterward and decides to fix it. The liability attaches immediately and automatically, and the burden of proof falls on the employer to demonstrate that the termination was lawful.
A private business that dismissed 130 people without documented just cause, including a worker on maternity leave and one within days of an entitlement threshold, would face years of litigation, back pay orders, moral damages claims, and potentially even criminal exposure for the specific protected categories. The legal fees alone would be crippling for a small or medium-sized enterprise.
No bank would look favorably on a company in that position. No insurance company would easily cover that liability. The regulatory and judicial system would come down on that business with the full apparatus the state has built to protect workers, and rightly so, because those protections exist for good reasons.
The INS, by contrast, fired 130 people, admitted before the Legislative Assembly that it did so without technical studies or evaluations, acknowledged that protected workers were included due to poor data management, and then essentially said it noticed the problem, corrected it, and would deal with the rest over the medium and long term.
The people responsible pointed at each other. The deputy manager pointed at the general manager. The general manager pointed at the executive presidency. Meanwhile, the institution continued operating while dozens of those former workers pursued legal claims that may ultimately cost more than the savings the dismissals were supposed to generate. The same institution also spent more than $2 million on a stadium naming deal during the same period, a deal that included plenty of perks for executives.
For a private employer, this is ridiculous.
Every month, private employers pay into the CCSS system for each formal employee. As of January 2026, the employer contribution to the IVM pension regime alone rose to 5.58 percent of payroll, on top of contributions to health insurance, occupational risk, and other funds, bringing the total payroll burden to roughly 25 to 26 percent above gross salary. They do this because the law requires it, because operating informally risks sanctions, and because the system is presented as a social compact: contribute faithfully and workers will be protected.
Then they watch a state employer admit in open session that it fired people on maternity leave by accident and face no immediate consequence remotely comparable to what a private employer would face. No criminal exposure. No immediate financial penalty calibrated to the violation. No independent regulator ordering it to halt operations while the matter is investigated. The consequence, at least so far, is a legislative hearing and some uncomfortable questions.
The deeper grievance is structural. Private employers have no ability to absorb labor costs the way a state institution can. When the INS needs to cover the legal consequences of its dismissals, from wrongful termination claims to reinstatements to eventual damages, those costs fall on the institution’s budget, which ultimately means public funds.
The institution does not face insolvency. Its credit lines do not get called. Its ability to operate is not threatened. A private business in the same position might not survive the combination of litigation costs, reputational damage, and the cash flow impact of back pay orders. The law is the same law in theory, but the capacity to absorb its consequences is wildly different.
There is also the question of what signals this sends about the value of formal employment as an institution. Private employers are already competing against an informal sector where competitors pay no CCSS contributions, carry no severance liability, and face no maternity protection obligations.
Every time a state entity demonstrates that the formal system’s rules are applied unevenly, with full rigor against private employers and something closer to administrative inconvenience for state entities, it weakens the argument for why businesses should absorb the cost of formalization in the first place. The answer the Labor Ministry and the CCSS would give is that the rules protect workers and create a fair labor market.
The answer many small business owners give, looking at the INS case, is that the rules protect workers from private employers specifically, while the state reserves the right to manage its own workforce by different standards and call the difference a data problem.
As one business owner put it, this is no way to run a railroad.
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