Table of Contents

Colombia

Table of Contents

Currency

Colombian Peso (COP)

Payroll Frequency

Bi-weekly/Monthly

Employer Taxes

20.52% - 26.96%

About Colombia

Colombia is a Latin American country surrounded by the Caribbean Sea, Panama, North Pacific, Venezuela, Ecuador, Brazil, and Peru. The country has Petroleum, natural gas, coal, nickel, gold, copper, emeralds, and hydropower. It has a fertile land of 37.5 percent of its total landmass with 54.4% being forested area. The largest ethnic groups are Mestizo and white (84.2 percent), followed by Afro-Colombian(10.4 percent). 79 percent of Colombians are Roman Catholics. It is governed by a presidential republic government.

Colombia is South America’s oldest democratic state. It has seen problems in the form of drug-funded guerilla attacks from Revolutionary Armed Forces of Colombia (FARC) that caused numerous casualties numbering in the hundreds of thousands. It comes in third after Brazil and Argentina in terms of economic power and relies on petroleum, coffee and cut flower exports. It enjoys the benefits of free trade agreements with many Pacific nations including the United States. The combined value of imports and exports is equal to 35 percent of the country’s GDP.

Employment Relationship

• Permanent Employment

Employment contracts concluded for indefinite term are considered permanent in Colombia. The Labor Code does not prohibit the use of fixed-term contracts for tasks of permanent nature. Fixed-term contracts can be indefinitely renewed. In contracts of indefinite duration or without fixed term, the parties have the right to terminate them at any time, by means of prior notice or eviction notified in writing to the other party with a term of not less than 45 days. Unless otherwise stipulated, the contract entered into for an indefinite period of time is understood to be extended for equal periods of 6 months duration.

• Fixed-Term or Specific-Purpose Contracts

According to Colombia's Labor Code, employment contracts can be concluded for a fixed duration, for tasks of a permanent nature, or the execution of specific work. The maximum length of a fixed-term contract is 3 years (36 months), however, the contract can be renewed indefinitely. Fixed term contracts must be made in writing. Fixed-term contracts for less than 1 year may be extended for up to 3 equal periods, after which the renewal term must be at least 1 year. Contracts whose duration has not been expressly stipulated or does not result from the nature of the work or service to be performed, are presumed to be entered into for successive terms of 6 months.

• Temporary Employment Contratcs

A temporary services company is defined as one that contracts the provision of services with third-party beneficiaries to collaborate temporarily in the development of its activities through the work carried out by natural persons hired directly by the temporary services company, which has with respect to these the character of the employer. Users are defined as any natural or legal person who contracts the services of temporary service companies. Temporary contracts may only be used in the following circumstances: For services required on an occasional, accidental, or transitory basis (for a maximum of 30 days) To replace workers of the user firm who are on vacation, maternity, or sickness leave (for the time required to cover the leave) To respond to an increase in production, transport, sales of goods, stationary periods of harvest, and in the provision of services (for 6 months, renewable for another 6 months) The contracts entered into between temporary service companies and users must be in writing and state that the temporary service company will be subject to the provisions of the law for purposes of payment of wages, social benefits, overtime, day and night surcharges, Sundays, and holidays.  

Probationary Period

The Labor Code of Colombia requires the probationary period to be stipulated in writing. If the original probationary period is less than one month, it can be extended before the expiration, but under no circumstances can the total probationary period exceed 2 months. Either party may unilaterally terminate the employment contract at any time during the probationary period without incurring penalties or obligations, and without prior notice.

Working Hours

The Labor Code of Colombia stipulates that the maximum working hours for adults are 42 hours per week. The number of hours of daily work can be distributed in a variable manner during the respective week, having a minimum of 4 continuous hours and a maximum of up to 9 hours per day without any surcharge for supplementary work, provided the number of working hours does not exceed the average of 42 weekly hours. The maximum working duration for minors is as follows: Persons between 15 and 17 years of age can work a maximum of 6 hours per day and 36 hours per week. Persons over 17 years of age can work a maximum of 8 hours per day and 48 hours per week. When the nature of the work does not require continuous activity and it is carried out in shifts, the duration of the workday can be extended to more than 8 hours, or 48 hours per week, provided that the average working hours do not exceed 8 hours per day or 48 per week.  Effective April 2022, Colombia enacted Decree 555 to regulate remote work. Furthermore, employees and public servants have the right to disconnect from work which begins once the working day is over. The employer must guarantee that the work and public servant can effectively and fully enjoy rest time, licenses, permits, vacations, and their personal and family life.

Holidays / PTO

• Statutory Holidays

New Year’s Day, January 1; Epiphany, January 6; Saint Joseph’s Day, March 25; Maundy Thursday, Variable; Good Friday, Variable; Easter Day, Variable; Labor Day/May Day, May 1; Ascension Day, Jun 3; Corpus Christi, June 24; Sacred Heart, July 1; Independence Day, July 20; Battle of Boyaca, August 7; The assumption of the Virgin, August 19; Race Day, October 15; All Saints Day, November 4; Independence of Cartagena, November 11; Day of the Immaculate Conception, December 8; Christmas, Dec 25.

• Paid Annual Leave

Colombia's labor law provides 15 consecutive working days of paid annual leave (one and two-thirds of a day for every month of service), after completion of 12 months of continuous service. Employer and employee can agree in writing, upon request of the employee, that up to half of the vacations be paid in money. The amount of the annual leave benefit is equal to the basic salary that the employee was earning the day on which the annual leave started. Payment for annual leave for employees with a variable salary is calculated as the average wage earned in the year immediately preceding the year in which annual leave commences. Employees have to take at least 6 continuous working days of vacation annually, which are not cumulative. However, the parties may agree to accumulate remaining leave for up to 2 years. 

• Sick Leave

According to Colombia's labor code, an employee is entitled to sick leave of up to 180 days (6 months) in the case of a non-occupational injury or disease. The law provides paid sick leave as follows: 2/3 (66.67%) of wages during the first 90 days of sick leave, and 1/2 (50%) of wages during the remaining period of sick leave The state health system is responsible for payment during non-occupational sickness leave. The benefits are paid through the state social security system that is funded through employees' (4% of monthly earnings) and employers' (8.5% of payroll) contributions.

• Maternity Leave

Female employees are entitled to 18 weeks of maternity leave with full pay, including at least one week of prenatal and 16 weeks of post-natal leave. Maternity leave can be extended up to 2 additional weeks in case of multiple or premature births. In the case of miscarriage and premature birth, a female employee is entitled to paid leave of 2 to 4 weeks. The leave is fully paid through Colombia's social security system, and the pay is provided in advance. Maternity leave and related benefits are also extended to adopting mothers. It is illegal for an employer to dismiss a female employee during her maternity leave and nursing period.

• Paternity Leave

Colombia's Labor Code provides paternity leave of 2 weeks paid by the government's social insurance scheme. Fathers are required to present a birth certificate for the leave to be approved. The certificate must be submitted to the EPS (Entidad Prestadora de Salud) within 30 days of birth.

Termination of Employment

• Notice Period

In Colombia, termination of a contract for indefinite duration requires a notice period of 45 days. Terminating a fixed-term contract of over 1 month requires prior notice of at least 30 days or 15 days in cases of termination for just cause. Employers may also give an employee pay in lieu of notice when terminating a fixed-term agreement.

• Severance Benefits

According to the Labor Code of Colombia, dismissed employees are entitled to severance pay for their service. If the termination was unilateral and without cause, indefinite term employees are entitled to receive severance as follows: For employees earning less than 10 times the minimum legal monthly wages, the compensation is 30 days of salary for the first year of service and 20 days of salary for each additional year of service (proportional to the fraction of a year). For employees who earn 10 minimum legal wages or more, the compensation is 20 days of salary for the first year of service and 15 days of salary for each additional year of service (proportional to the fraction of a year). In fixed-term contracts, the severance is paid as salary corresponding to the time remaining to fulfill the stipulated term of the contract or the period determined by the duration of the work or the contracted labor, in which case the severance pay shall not be less than 15 days.