Regulations of the National Program for Hourly Employment

PURPOSES OF THE REGULATION. The purpose of this regulation is to develop complementary regulations to Legislative Decree 230-2010, published in the Official Gazette "La Gaceta" No. 32,358 on November 5, 2010, to enhance the execution of the "National Program for Employment by Hours".

PURPOSE OF THE PROGRAM. The purpose of the Program is to promote dignified employment, maintain existing job positions and prevent growth in unemployment and underemployment rates in the country, opening work opportunities to the population during the economic crisis cycle that currently affects the majority of countries in the world.

DURATION OF THE PROGRAM. The Program is classified as a matter of social urgency, with a duration of thirty-six (36) months from its approval, and its extension shall depend on the positive results obtained, in accordance with the requirements of economic conditions and the labor market; parameters that the National Congress shall consider, based on the reports that the Monitoring Commission and the State Secretariat of Labor and Social Security shall conduct in accordance with the Program.

SCOPE OF APPLICATION. The Program is of national application for all natural or legal persons who are employers, owners of productive or service units in the formal sector of the economy and special enterprises developed by the public sector, who decide to adhere to the Program.

For the purposes of this Regulation, the following shall be understood as: 1. Program - A special emergency program that promotes employment by hours, of temporary character, created in order to promote dignified employment, the maintenance of existing job positions and reduce unemployment and underemployment. 2. Base Salary - The remuneration fixed by hour, which shall not be less than the legally established minimum wage, calculated by dividing the minimum wage per ordinary workday by the number of hours established for the ordinary maximum daily workday, whether daytime, mixed or nighttime. 3. Qualified Labor - That offered by a person whose technical or professional studies or experience in the matter guarantee the result of service provision in terms of productivity and quality. 4. Unqualified Labor - That offered by a person who does not possess technical or professional training. 5. Payroll of Permanent Workers - The document that contains the set of workers contracted for an indefinite period by the productive or service units. 6. Urban Zone - That inhabited in populated centers of 2,000 or more inhabitants with an infrastructure defined or established by the competent authority. 7. Rural Zone - That which does not meet the characteristics indicated above and has a dispersed population. 8. Dignified and Decent Employment - That work performed under conditions of freedom, equity, security and human dignity. 9. Non-habitual Compensation - For the purposes of this program, the equivalent of twenty percent (20%) over the agreed base salary as compensation equivalent to the payment of the thirteenth month, fourteenth month and vacation, which shall not constitute salary. 10. Productive Units - Production units are classified into: Units of goods production and units of service production. Units of goods production are natural or legal persons dedicated to the production of goods for profit. Units of service production are natural or legal persons dedicated to the provision of services for profit.

QUALIFICATION. The State Secretariat of Labor and Social Security through the General Directorate of Employment shall qualify economic activities not enumerated in Article 3, numeral 2 of the Program Law, within a term of business days after receiving all required information. For the qualification of these activities, the criteria contained in the cited article shall be considered, which by their nature require the hiring of employment by hours and a percentage greater than forty percent (40%) established in Article No. 4 of Decree No. 230-2010 containing the National Program for Employment by Hours, for which the following criteria shall be taken into account: - Nature of the industry or activity that entails the hiring of workers by the hour. - Special programs coordinated by the State or non-profit organizations that seek the common good of the population, such as: attention to natural disasters, national health emergencies, national coverage surveys, consumer protection measures, food security and others that derive from a qualified national emergency. Upon expiration of the deadline established in the first paragraph of this Article, without the respective qualification resolution having been issued, the qualification shall be understood as approved. Special programs developed by the public sector must be registered with the General Directorate of Employment.

RECRUITMENT AND SELECTION OF WORKERS FOR THE PROGRAM. In support of the recruitment and selection of workers, the State Secretariat of Labor and Social Security through the General Directorate of Employment shall make available to employers the Network of Free Placement Services as a means to visualize the supply and demand of labor, without prejudice to the employment intermediation services without profit purpose that function and are managed by the private sector.

MODALITIES AND FORMS OF HIRING. Employment contracts entered into under this Program shall be in writing and shall be subject to the following modalities: a) For a limited period. b) For work or services determined.

When work by the hour is agreed upon, the minimum daily workday shall be two (2) hours in rural zones and three (3) hours in urban zones. When a half-day is agreed upon, this shall be four (4) hours for the daytime workday, three and a half (3.5) hours for the mixed workday and three (3) hours for the nighttime workday. The maximum weekly workday shall not exceed the workdays established in the Labor Code. Effective work executed outside the limits of the agreed workday constitutes overtime and shall be remunerated in accordance with the provisions of the Labor Code.

BASE SALARY. The hourly base salary shall not be less than the minimum wage established in accordance with Article 6 of Decree No. 230-2010 containing the National Program for Employment by Hours. Base salaries agreed and fixed, lower than the minimum wage in any hiring modality, are void as a matter of law.

NON-HABITUAL COMPENSATION. To every worker hired under the Program, in addition to the established base salary, there must be paid a non-habitual compensation of twenty percent (20%), which is equivalent to the payment of the thirteenth month, fourteenth month and vacation, which shall be made effective on the date agreed upon by the parties for the payment of salary. Non-habitual compensation shall not be applicable to qualified workers hired under the Program, provided that the agreed salary is greater than the legal minimum wage and the sum of the non-habitual compensation, without prejudice to the fact that in accordance with the Law the payment of vacation, thirteenth month and fourteenth month must be covered proportionally and shall be made effective on the date agreed upon between the parties.

RIGHTS OF WORKERS. Workers hired under the Program have the right to:

• a)

  Ordinary remuneration for services rendered;

• b)

  Non-habitual compensation, except for the exceptions established in the Law;

• c)

  Preferential right to be hired as a permanent employee, with the first option being the worker who qualifies or completes his or her primary or secondary education;

• d)

  Free unionization;

• e)

  Benefits of collective agreements that apply to them, subject to union dues;

• f)

  Social security benefits as established in the Program;

• g)

  Training and capacity building;

• h)

  Payment of overtime hours, which shall be calculated based on the minimum wage and not on the hours hired;

• i)

  Fundamental rights established in the Constitution of the Republic, International Agreements and the Labor Code. The foregoing is without prejudice to other rights that the parties may agree upon or that the employer may voluntarily grant.

Workers hired under the Program must enjoy adequate protection against any act of discrimination aimed at undermining freedom of association in relation to their employment. Such protection must be exercised against any act that has as its purpose: a) To condition the hiring of a worker on the basis that he does not affiliate or ceases to be a member of a union. b) To dismiss a worker or harm him in any other way because of his union affiliation or his participation in union activities outside working hours or with the consent of the employer during working hours.

OBLIGATIONS OF EMPLOYERS. Productive or service units, constituted as natural or legal persons, that adhere to the Program are obligated to:

• a)

  Execute an individual employment contract in writing in accordance with the model prepared by the State Secretariat of Labor and Social Security, where the rights, obligations and responsibilities of the parties shall be established, which must be registered with the General Directorate of Employment, and a copy must be delivered to the worker.

• b)

  Strictly comply with the regulations and prohibitions established in international agreements and national legislation on child labor and its worst forms.

• c)

  Hire workers belonging to vulnerable groups from the total number of workers under the Program, up to ten percent (10%) when it is productive or service units of one (1) to fifteen (15) salaried workers; and up to five percent (5%) in productive or service units of more than fifteen (15) salaried workers.

• d)

  Register the worker in the monitoring list or registration with the Honduran Social Security Institute (IHSS).

• e)

  Preferentially fill vacancies that arise as a result of the withdrawal or separation of permanent personnel with personnel hired under the Program modality.

• f)

  Deposit in the special trust account at the Central Bank of Honduras (BCH) the contributions corresponding to the National Institute of Professional Training (INFOP).

• g)

  Execute affiliation agreements with the Honduran Social Security Institute (IHSS), in order to guarantee workers hired under the Program the social security services; in the same manner they may contract these services through agreements with private clinics, company doctor systems, insurance and health plans.

• h)

  Provide workers hired under the Program the benefits included in the programs, health plans or collective insurance policies for accidents, medical services, disability, invalidity, old age and death or other social security benefits enjoyed by their permanent workers in areas where the Honduran Social Security Institute (IHSS) does not have coverage and provide the General Directorate of Employment with all information to feed the Program Monitoring and Evaluation System.

• i)

  Provide the General Directorate of Employment with all necessary information to feed the program monitoring and evaluation system.

PROHIBITIONS OF THE EMPLOYER. To hire workers under the regulations of the Program for work that in accordance with the Labor Code is considered temporary or seasonal. To make reductions of permanent salaried personnel after registering with the Program, except for just causes of dismissal, resignation or termination of the employment contract by mutual agreement.

EMPLOYERS' RIGHTS. The employer has the right to hire personnel under this Program, up to the percentage established in Article No. 4 of Decree No. 230-2010 containing the National Program for Employment by Hours, except as provided for in its exceptions. TITLE VI CHAPTER I OF THE TRUST

The contributions established in the Law of the National Institute of Professional Training (INFOP) that the employer adhering to the Program is required to contribute shall be managed through a trust in the Central Bank of Honduras (BCH), whose opening shall be requested by the State Department in the Offices of Labor and Social Security (STSS) to the State Department in the Office of Finance. For purposes of the program, the contributions do not affect the payments that employers make in concept of non-habitual compensation.

The trust has as its purpose to channel financial resources toward the training and education of workers subject to the Program according to the requirements of the labor market demand. The training or education shall be carried out through the National Institute of Professional Training (INFOP). In this regard, training and education programs shall be designed, organized, and executed in accordance with the intensive training and education plan within the framework of the Nation Plan.

The Trust Administration Committee is composed as follows:

• a)

  A representative of the Technical Secretariat of Planning and External Cooperation (SECPLAN), who shall preside over it.

• b)

  A representative of the State Department in the Offices of Labor and Social Security (STSS).

• c)

  A representative of the Center for Development of Human Resources of Honduras (CADERH).

• d)

  A representative of the Foundation for Development and Technology (FUNDETEC).

• e)

  A representative of the Association of Municipalities of Honduras (AMONH).

• f)

  A representative of the follow-up commission of the Program of the National Congress who shall act solely as an observer, with the right to speak, but without the right to vote.

The Trust Administration Committee has the following powers:

• a)

  Design the intensive training and education plan in consultation with the Honduran Business Council (COHEP), the Labor Confederations, and the National Institute of Professional Training (INFOP).

• b)

  Prepare the annual operational plan of the training activities to be developed during the year.

• c)

  Prioritize the training and education needs according to labor market needs.

• d)

  Monitor and evaluate the progress of the intensive training plan.

• e)

  Send to the General Employment Office the information on the list of workers trained within the framework of the Program.

• f)

  Present quarterly reports to the Economic and Social Council (CES) and to the National Council of Country Vision on the results of the training and education programs.

• g)

  Manage before the Central Bank of Honduras (BCH) as trustee, the necessary balances for the development of the annual operational plan. TITLE VII SUPERVISION, CONTROL AND COORDINATION CHAPTER I

SUPERVISION, CONTROL AND COORDINATION. It is the responsibility of the State Department in the Offices of Labor and Social Security through the General Employment Office the following institutions:

• a)

  Establish the procedure for registration and enrollment in the program.

• b)

  Establish the mechanisms for collecting information and generating statistics related to the Program.

• c)

  Keep updated the information necessary for evaluating the impact of the Program.

• d)

  Analyze the quantitative and qualitative aspects that the Program may cause or could cause in the existing inequalities in access to employment.

• e)

  Implement a single service window whose purpose shall be to provide assistance, guidance, reception and simplification of procedures derived from the Program.

• f)

  Provide relevant information to the follow-up commission on the results of the Program, as well as to the different sectors interested in its dynamics.

It is the responsibility of the State Department in the Offices of Labor and Social Security through the General Labor Inspectorate the following powers:

• a)

  Supervise the productive or service units in order to verify strict compliance with the obligations established for them in this regulation.

• b)

  Monitor compliance with the provisions contained in Decree No. 230-2010 containing the National Program for Employment by Hours and this regulation.

• c)

  Address complaints filed regarding abuses in the application of the Program, proceed to investigate and expand within the sanctions established in the Law and the applicable Labor Code.

• d)

  Prepare a report on the results of the investigations conducted.

• e)

  Perform other functions proper to the nature of its competence. CHAPTER II REGISTRATION AND MONITORING

REGISTRATION AND MONITORING. The State Department in the Offices of Labor and Social Security, through the General Employment Office, shall maintain the registration and monitoring of the National Program for Employment by Hours, for which purpose it shall implement a monitoring and evaluation system. To feed the system, natural or legal persons who are employers, owners of Productive or Service Units, as well as the special programs developed by the public sector that adhere to the Program, during the term of its duration, shall provide all necessary information in physical or electronic form to the General Office through employers' or workers' organizations, who shall have the obligation to forward it immediately to the State Department in the Offices of Labor and Social Security; for this purpose, agreements may be executed with the aforementioned sectors.

The productive or service units that adhere to the Program and that are operating when Decree No. 230-2010 containing the National Program for Employment by Hours goes into effect shall accredit before the General Employment Office the payroll of permanent and temporary workers for the last three (3) months prior to the effective date of such Decree; likewise, the productive or service units that are beginning operations shall present the payroll with which they will begin their activities. CHAPTER III FOLLOW-UP COMMISSION

FOLLOW-UP COMMISSION. The follow-up commission shall be composed as follows:

• a)

  The Secretary of State in the Offices of Labor and Social Security (STSS) or his representative, who shall preside over it;

• b)

  A representative of the Confederation of Workers of Honduras (CTH);

• c)

  A representative of the Unitary Confederation of Workers of Honduras (CUTH);

• d)

  A representative of the General Central of Workers (CGT);

• e)

  Three representatives of the Honduran Business Council (COHEP), which must include among them a representative of small and medium enterprises.

The follow-up commission has the following powers: a) Report quarterly to the State Department in the Offices of Labor and Social Security (STSS), the Economic and Social Council (CES), and the National Council of Country Vision on the results of the Program. b) Report quarterly to the National Institute of Statistics (INE) on the results of the Program. CHAPTER IV COORDINATION RELATIONS

It is the responsibility of the State Department in the Offices of Labor and Social Security:

• a)

  Establish coordination mechanisms with the institutions involved, to ensure the effective execution of the Program, as well as for the adoption of criteria regarding its expansion.

• b)

  Report quarterly to the National Congress on the results of the Program.

• c)

  Report to the National Congress the result of the investigations and sanctions applied to productive or service units that violate the provisions contained in Decree No. 230-2010 containing the National Program for Employment by Hours.

• d)

  Manage before the Special Follow-up Commission of the National Congress the enabling of fixed and mobile telecommunications operators with the corresponding codes to address complaints from the public.

The State Department in the Offices of Labor and Social Security jointly with the National Congress, shall establish the mechanisms for a broad dissemination and success of the Program.

The Technical Secretariat of Planning and External Cooperation (SECPLAN) in coordination with the State Department in the Office of Finance, shall provide to the State Department in the Offices of Labor and Social Security the financial resources necessary for the implementation, training of workers and workers covered by the Program as well as for its dissemination. TITLE VIII FINAL PROVISIONS

Given its exceptional and special character of the National Program for Employment by Hour, the situations not provided for in the Law and this Regulation shall be resolved in accordance with what is established in the Constitution of the Republic, International Labor Conventions, Labor Code, principles of labor law and other applicable labor regulations. SECOND: This Agreement shall come into effect as of the date of its publication in the Official Gazette "La Gaceta" Done in the city of Tegucigalpa, municipality of the Central District, on the twenty-first day of the month of January of two thousand eleven. PORFIRIO LOBO SOSA PRESIDENT OF THE REPUBLIC FELICITO ÁVILA ORDÓÑEZ SECRETARY OF STATE IN THE OFFICES OF LABOR AND SOCIAL SECURITY