# Honduran state labor settlement budget reform > Live situation record from CLSTR: https://clstr.news/situations/honduran-state-labor-settlement-budget-reform > Updated: 2026-10-20T00:11:49.000Z. Sources: 9. Developments: 2. The Honduran National Congress initiated a reform to Article 95-A of the General Budget Provisions to remove legal restrictions on labor lawsuit settlements against the state. Previously, the law imposed an 80% ceiling on claimed benefits and a maximum three-year payment period for conciliation agreements. Congress President Tomás Zambrano argued that these parameters acted as a “straitjacket” that hindered voluntary negotiations. The reform has since entered into force following its publication in the Official Gazette. The amendment eliminates both the 80% cap and the three-year timeframe, allowing centralized and decentralized public administration institutions, autonomous entities, public companies, and universities to engage in conciliation procedures. These procedures can now be completed within a maximum of 45 calendar days following a first-instance ruling or recognized act, without requiring intervention from the Attorney General of the Republic. ## Timeline ### 2026-10-20: Honduras implements budget reform to facilitate state labor settlements Honduras has implemented a budget reform that removes limits on settlement amounts and timelines for labor lawsuits against the state, allowing for faster direct negotiations. 3 sources. https://clstr.news/cluster/honduras-implements-budget-reform-to-facilitate-state-labor-settlements ### 2026-10-13: Honduran Congress seeks to remove limits on state labor settlements Honduras' National Congress proposes reforming budget laws to remove the 80% cap and three-year limit on labor settlement negotiations between workers and the state. 6 sources. https://clstr.news/cluster/honduran-congress-seeks-to-remove-limits-on-state-labor-settlements --- Cite as: Honduran state labor settlement budget reform. CLSTR, https://clstr.news/situations/honduran-state-labor-settlement-budget-reform