ENDORSEMENT OR APPROVAL OF INDIVIDUAL EMPLOYMENT CONTRACTS: LEGAL ASPECTS EVERY EMPLOYER MUST CONSIDER

IS IT MANDATORY TO ENDORSE ALL EMPLOYMENT CONTRACTS?

The requirement to endorse a contract depends on the nature of the employment relationship. According to Article 6 of the General Labor Law, employment contracts may be concluded either verbally or in writing. However, in certain cases—such as fixed-term, seasonal, or project-based contracts—written form is necessary to clearly define the terms and conditions.

Additionally, under Article 22 of the General Labor Law and Article 14 of Supreme Decree No. 244 (dated August 23, 1943), a written contract must be endorsed by a Labor Inspector or the relevant administrative authority to have legal effect.

For example, under the second paragraph of Article 1 of Decree Law 16187 (dated February 16, 1979), if there is no written contract in a fixed-term employment relationship, it is presumed to be an indefinite-term contract unless proven otherwise.

Regardless of whether the contract is verbal or written, Bolivian labor law allows its existence to be proven by any legal means.

REQUIREMENTS FOR ENDORSING AN EMPLOYMENT CONTRACT

As of January 2, 2024, the Ministry of Labor, Employment, and Social Welfare approved Ministerial Resolution No. 001/24, which sets out the new “Regulation for the Endorsement of Individual Employment Contracts for National and Foreign Workers.” The regulation outlines different requirements and deadlines for Bolivian and foreign employees.

For Bolivian Workers:

General Requirements:

1. Copy of the employer’s or legal representative’s ID
2. Power of attorney authorizing the representative to hire and process the contract endorsement
3. Copy of the Employer Mandatory Registration (ROE)
4. Copy of the employer’s Tax Identification Number (NIT)
5. Latest declaration of payroll and workplace accident reports filed through the Virtual Processing Office (OVT)

Individual Requirements:

1. Three original copies of the Individual Employment Contract
2. Copy of the worker’s ID
3. Proof of individual deposit of Bs 19 per contract to account No. 1-6036425 (MTEPS Revenue, Banco Unión)

All documents must be submitted in a manila envelope.

For fixed-term contracts, supporting documentation and a justification letter are required as per R.A. 650/07.

Deadline for submission: 60 days from the start of the employment relationship.

For Foreign Workers:

General Requirements:

1. Copy of the employer’s or legal representative’s ID
2. Power of attorney with special authority to hire and process contract endorsement
3. Copy of the Employer Mandatory Registration (ROE)
4. Copy of the employer’s Tax Identification Number (NIT)
5. Latest declaration of payroll and workplace accident reports through the OVT
6. Written request for contract endorsement for a foreign worker

Individual Requirements:

1. Three original copies of the Individual Employment Contract
2. Copy of the foreign worker’s ID or work visa
3. Resolution issued by the Migration Office granting migration status
4. Proof of individual deposit for each contract to account No. 1-6036425, MTEPS Revenue (Banco Unión), amount based on the worker’s nationality, as per Ministerial Resolution No. 462/22 (April 28, 2022)

According to requirements from the Departmental Office of the Ministry of Labor in La Paz, a sketch of the workplace must be included. All documents must be submitted in a yellow folder with a fastener.

Deadline for submission: 30 days from the start of the employment relationship.

The endorsement process must be filed through the Single Window at the central Ministry of Labor office or the Departmental or Regional Labor Offices, depending on the employee’s work location.

LEGAL CONSEQUENCES OF NOT ENDORSING A WRITTEN EMPLOYMENT CONTRACT

According to the current regulation, the failure to endorse an employment contract has several consequences:

• It is considered a violation of labor law.
• In the case of foreign workers, failure to endorse the contract results in a fine calculated based on the number of foreign employees.
• The endorsement is not retroactive. The established deadlines are mandatory, and late submissions will be rejected by the administrative authority.
• For fixed-term or temporary contracts, if no endorsement is made, the relationship is presumed to be an indefinite verbal contract. This creates legal disadvantages for the employer and exposes them to potential labor disputes.

CONCLUSION

Endorsing an employment contract is mandatory in certain situations and provides an additional layer of legal protection for both parties. It ensures that the employment agreement complies with all applicable labor laws, enhances transparency in the relationship, and facilitates conflict resolution.

If you have an employment contract and are unsure whether it needs to be endorsed, consult a labor attorney or contact the Ministry of Labor to avoid future legal complications.