Its natural resources, central geographical location, and free trade agreements are just some of the reasons why businesses are expanding into Colombia. In this post, we provide information on employing a worker in Colombia.
Capital GES created this postcard series to help businesses that are considering expansion and hiring global staff. In this postcard series, we provide helpful tips on international employment. Below, we answer the most common questions asked in relation to employing a worker in Colombia.
Colombia Overview
For businesses and investors looking to expand into Latin America, Colombia should be considered. Colombia is the third-largest economy in the region. Its natural resources, central geographical location, and free trade agreements with strategic partners make Colombia an attractive option for businesses and investors. Colombia offers businesses plenty of opportunities to invest in its traditional industries such as coffee and petroleum.
Furthermore, Colombia is a fast-growing country that is always looking to innovate. Over the last decade, Colombia has been transforming and modernising the country’s stable mining and agricultural industries. In addition, Colombia has developed technology and innovation centres in cities to become one of Latin America’s fastest-growing tech talent hubs.
Employing a worker in Colombia – Employment Laws to know
However, expanding into Colombia can be complex. Therefore, it is best to seek the right advice before expanding your business and hiring staff. Below, we look at the most common questions asked by clients regarding employment law in Colombia.
1. Contracts
Can I trial a worker using a fixed-term employment contract, as I am not sure whether it will work out in the long term?
Fixed-term contracts are available. However, employers must have a reason that justifies the transitory nature of the contract. The contracts must be in writing and available for a time-specific role.
Fixed-term contracts in Colombia are only available for three years maximum. Fixed-term contracts can be automatically renewed for the same period three times if their initial duration is less than one year, after which extension is automatically for one year, regardless of the initial agreement. A fixed-term contract that surpasses the extension period (after its extension) will automatically convert into an open-ended contract.
To ensure your worker stays fully compliant in Colombia, it is best to discuss your contract options with a local partner.
2. Termination Rules and Severance Pay
What do I need to know about termination and severance pay in Colombia?
Terminations in Colombia are often complex and should be considered with local experts before any notice is issued.
Termination costs and rules
Under Columbian labour law, contracts may be terminated by mutual agreement, or an employer may only terminate a worker for “just cause” in very limited circumstances or resignation.
The employer must communicate the termination in writing by registered mail or by hand delivery to the employee. There is no notice period required by law in Columbia to terminate a worker under an indefinite-term contract.
However, for fixed-term contracts, a 30-day notice must be given to inform the worker whether the contract will be extended or not.
Severance pay
Severance pay is due in case of termination of indefinite-term contracts and early termination of fixed-term contracts without cause by the employer and is equivalent to the below:
• Worker earning until ten minimum salaries per month: 30 days from day one of employment up to the 1st year plus 20 days for the subsequent years of employment.
• Worker earning ten minimum salaries or more per month: 20 days from day one of employment up to one year; and 15 days for the subsequent years of employment.
The employer must also pay out the accrued 13th salary and vacations. For a fixed-term contract terminated prematurely, additional severance equivalent to the salaries for the remaining term is due. Termination payment must be done immediately after termination (max. ten days after).
3. Statutory Benefits
Paid Holiday Leave
In Colombia, employees are entitled to 15 business days per year after one year of employment. This does not include public holidays. Holidays may be taken in blocks, provided that the worker takes at least six continuous days per year of vacations. In addition, employees must work at least half of the calendar year to be entitled to full holiday pay.
Up to half of the paid holiday leave can be converted into cash upon worker’s request. Holiday leave may be accumulated for up to two years, upon the worker’s request.
Maternity, Paternity, and Parental Leave
Maternity leave
In Colombia, mothers are entitled to 18 weeks maternity leave, which can be used before or after birth. During maternity leave, employees receive an allowance equal to 100% of the average salary. Maternity leave is paid by the employer who then claims it back from the Social Security system.
Paternity leave
In Colombia, fathers are entitled to eight days paid paternity leave which shall be taken immediately after childbirth. This leave is paid by the employer (while the employer requests compensation of the amounts to Social Security). Similar to maternity leave, workers are paid an allowance equal to 100% of the average salary.
Sick pay
Social Security in Colombia covers for sick leave pay from 21st day up to 11 months and ten days of sickness, under specific percentages and rules.
Sick pay due to non-work-related illness or injury shall be paid by the employer for the first two days of any period of absence. From the 3rd day onward, the employer shall pay 2/3 of the worker’s salary for up to 180 days, in case of non-work-related sickness, and 100% of the worker’s salary in case of work-related sickness, while the employer requests compensation of the amounts to Social Security.
How Capital’s Employer of Record Solution Can Help You Hire Workers in Colombia
Capital GES provides many employment services such as managing the worker’s onboarding, HR, payroll, and taxes.
If you are a business that is looking to expand internationally and want to employ workers in Colombia or any other country in Latin America, Capital GES can help. To establish what services you require, contact sales@capital-ges.com or phone +55 31 3194 8150.
