Honduran Congress seeks to remove limits on state labor settlements

The National Congress of Honduras is pursuing a reform to Article 95-A of the General Budget Provisions to remove restrictions on labor lawsuit settlements against the state. Currently, the law imposes a ceiling of 80% of the claimed benefits and a maximum three-year payment period for conciliation agreements.

Congress President Tomás Zambrano stated that the initiative aims to eliminate these parameters to allow for voluntary negotiations. He argued that conciliation is inherently an agreement between parties and that the legislature should not impose a “straitjacket” or fixed percentages and deadlines on such settlements.

If approved, the reform would allow workers, their legal representatives, and state institutions to negotiate payment terms and amounts without the current legal limitations. While the reform removes the 80% cap, the final amounts will still depend on individual negotiations and applicable legal provisions.