www.doingbusinessincolombia.com
EMAIL info@doingbusinessincolombia.com
TEL +57-305-461-9162
Colombia, a diverse and vibrant country in South America, has witnessed significant growth and development in recent years. With its improving economy, many businesses worldwide are considering hiring Colombian workers to tap into their skills and contribute to their ventures. However, before diving into recruitment, employers need to be aware of the legal and labor conditions associated with hiring a Colombian worker. This article provides a comprehensive guide on the subject, addressing critical aspects such as employment contracts, working hours, minimum wages, and employee benefits.
Employment Contracts:
When hiring a Colombian worker, it is crucial to establish a written employment contract despite that there is no need to have signed contract but in this specific condition the work contract is consider “labor contract under undefined term” which has other responsibilities for the employer and terms and amounts of compensation in case of termination of contract.
The labor written contract should contain essential details like wages, working hours, job duties, vacation entitlement, and termination clauses. Colombian labor law recognizes both fixed-term and open-ended contracts, with a probationary period of up to three months for the latter.
Working Hours and Overtime:
The standard working week in Colombia is 48 hours, typically spread over six days, with a maximum of eight hours per day however the law has been reducing the number of hours per year, now it is in year 2023 46 hours per week. However, an alternative schedule may be arranged if approved by the Ministry of Labor. Overtime work is allowed but limited to 12 hours per week and must be compensated at a higher rate or granted time off in lieu as per the labor regulations.
Minimum Wage:
Colombia has an annually determined minimum wage, adjusted according to the country’s economic conditions. As of 2023, the minimum monthly wage is around COP 1,160.000 (approximately USD 266). Additionally, employers may need to factor in other legally mandated benefits such as vacation bonuses, family subsidies, and transportation allowances, which can vary depending on the industry and geographical location.
Social Security:
Employers are required to register their Colombian employees with the social security system, which covers health, pension, unemployment, and occupational risks. Employers generally contribute 9% of the employee’s monthly salary towards social security, while the employee contributes 4%. Compliance with social security obligations is crucial to ensure the worker’s well-being and avoid any legal liabilities.
Termination and Severance:
Terminating an employment contract in Colombia requires adherence to specific legal procedures. Employers must provide just cause or comply with the notice period and severance payments specified in the labor regulations based on the employee’s years of service. Severance payments are typically calculated as one month’s salary for every year of service, up to a maximum of twelve months.
Benefits non considered salary for Colombian workers.
Thins that are unknown for US citizen are such as
Cesantia: The total amount that must be paid from cesantias pay is equivalent to one month’s salary for each year worked and, in the case of those people who have not completed the established time, they will receive an amount proportional to the period worked.
This is paid directly to a fund called authorized to receive the deposit of Cesantia, never directly to the worker.
Interests cesantias: Severance interest is a value that the company recognizes to its workers regarding the social benefit of severance pay. Its payment is made directly to the worker no later than January 31 of each year, according to the provisions of paragraph 2 of article 1 of Law 52 of 1975.
Prima de services the service bonuses the payment made by the employer for the economic and social benefits obtained from the worker. This benefit consists of one month’s salary for each year of work or proportional if you have worked less, which is paid in two installments during the year.
Collective Bargaining and Unions:
Colombian labor law allows collective bargaining and union participation. Employers should be aware of any sector-specific collective bargaining agreements that may exist to ensure compliance with negotiated terms and conditions. Employees have the right to associate freely and join existing unions. Employers should respect workers’ rights, maintain good employee relations, and facilitate constructive dialogue when collective bargaining is involved.
During our 17 years of experience, we have seen Americans citizens not paying or denying the right of Colombian worker to have his benefits. This ends in labor court and if American employer never paid, judge would declare him guilty and if necessary, will confiscate his assets to pay the worker.
The excuse of law is not justification to not pay Colombian workers benefits.
DOING BUSINESS IN COLOMBIA has navigate for 17 years the legal and labor conditions associated with hiring a Colombian worker involves careful consideration of the required employment contracts, working hours, minimum wages, social security obligations, termination procedures, and respect for collective bargaining. Employers must ensure compliance with all legal requirements to protect employees’ rights and foster a productive work environment. By doing so, businesses can establish successful partnerships with Colombian workers and contribute to the country’s ongoing growth and development.
If you are in a trouble with a worker, please contact us.
www.doingbusinessincolombia.com
EMAIL info@doingbusinessincolombia.com
TEL +57-305-461-9162
