Once a central part of the Mayan civilization, modern Guatemala got its independence from Spain in 1821. It is a Central American country bordered by Mexico to its north and El Salvador to its south. Guatemala is the most populated nation in Central America with agriculture accounting for 13.5% of the GDP. The country primarily exports products like sugar, vegetables, coffee, and bananas. Unfortunately, over half their national population lives below the poverty line and about 23% live in extreme poverty. With a population of 15.4 million, Guatemala has several ethnic groups including Mestizo and European (60%), Maya (39.3%), and non-Mestizo and Non-Maya. Spanish is the main language followed by Mayan languages. Religion in Guatemala includes Roman Catholic, Indigenous Mayan beliefs and Protestant Christianity. Guatemala is also known for its rich biodiversity and ecosystems, including several species that are endemic to the region. Resulting from political instability, lack of economic opportunities, and natural disasters, Guatemalans have a history of both legal and illegal immigration to neighboring countries.
All individual work contracts are considered to be made for an indefinite period unless expressly stated otherwise. An employee who performs activities that are permanent or continuous in a company must be signed to an indefinite-term agreement. Such contracts can be terminated at any time by giving a notice to the other party.
Consequently, fixed-term contracts and contracts for specific works are exceptional and can only be concluded in cases where the accidental or temporary nature of the service so requires.
In Guatemala, an individual work contract may be verbal when it refers to:
Agricultural or livestock work
Domestic service
Temporary or incidental work not exceeding 60 days
For the performance of a specific job, provided that its value does not exceed GTQ 100 (Guatemalan quetzales).
In all other cases, the contract of employment must be in writing and must contain information on the identity of parties, duration of agreement, working hours, salary and benefits, nature of work,etc.
The Labor Code of Guatemala offers no general regulation of temporary work agency employment. However, Article 5 of the Labor Code defines an intermediary as a person who hires one or more workers to perform activities for a third party (patrono). The third party is jointly and severally liable with the intermediary for the management of said employees in reference to their labor rights and obligations granted under the Constitution, Labor Code, internal manuals, and other applicable regulations.
The number of renewals and extensions of temporary work assignments is not restricted. Restrictions and renewals depend on what the parties agree upon privately.
According to the Labor Code, for contracts of indefinite duration, the first 2 months are considered a probationary period (although the parties can mutually agree to a shorter probation). During this period, either party can terminate the employment contract with or without cause, without any responsibility on their part. A probationary period cannot be extended.
Per the labor law, regular working hours are 8 per day and 44 per week (the standard workweek is six days). In case of mixed work day (day and night work), working hours cannot exceed 7 hours per day and 42 hours per week. In case of night work, working hours cannot exceed 6 hours a day or 36 hours a week.
The total working hours, including overtime, may not exceed 12 hours daily. Employees who work beyond the standard working hours are entitled to overtime pay at 150% of the regular hourly rate. Work performed beyond the limits provided by the contract between the parties is also considered overtime work and must be remunerated as such.
In Guatemala, the labor law grants an employee 15 consecutive working days of paid annual leave after completion of 12 months of continuous service with the same employer. The employee must have worked at least 150 days in the year of service to be entitled to leave. Annual leave pay must be issued to the employee before the start of the leave.
Workers must enjoy their vacation period without interruptions and are only obliged to divide them into 2 parts at most. Leave days are not cumulative from year to year. Employees cannot apply unused leave to the following year. However, at the termination of the contract employees can claim compensation in cash for leave that has been omitted in the last 5 years.
Guatemala's labor law stipulates that an employment contract is suspended during an employee's sickness. Workers are entitled to paid sick leave for up to 6 months, provided that the insured employee has at least 4 months of contributions in the 6 months before the sickness begins. The benefits are provided by the Guatemalan Social Security Institute (Instituto Guatemalteco de Seguridad Social) from the fourth day of the temporary suspension of work. Two-thirds of a worker's average earnings is paid as a sickness benefit up to a maximum of 180 days (the benefit may be extended for 39 weeks). The maximum combined benefit for multiple periods of incapacity is 52 weeks in a 24-month period. The Guatemalan Social Security Institute also sets a maximum monthly benefit.
Under the Labor Code of Guatemala, pregnant female employees are entitled to a maximum of 12 weeks (84 days) of maternity leave, including 30 days of prenatal leave and 54 days of postnatal leave.
An employee is entitled to receive her full salary while on maternity leave from the Guatemalan Institute of Social Security, provided she has paid contributions for 4 months in the 6 months preceding the prenatal leave and she is not engaged in any other paid work during the period of leave. If an employee is not registered with the Social Security Institute, the employer pays the full salary.
The Labor Code of Guatemala provides 2 days of fully paid paternity leave for the birth of a child. No qualifying conditions are stipulated regarding the entitlement to paternity leave.
In Guatemala, the length of a statutory notice period for termination of an indefinite contract is based on the employee's duration of service.
1-week notice for service under 6 months
10 days' notice for more than 6 but less than 12 months of service
2 weeks' notice for more than 1 year but less than 5 years of service
1-month notice for 5 or more years of service
The notice period listed above applies to workers who wish to terminate a contract for an indefinite period without just cause once the trial period has elapsed. These notice periods are not binding on employers and are superseded by a notice period stipulated in an employment contract. If an employer has to terminate an employee due to just cause or misconduct, a written dismissal notice must be provided to the employee before termination.
The Labor Code stipulates that an employee dismissed for just cause is not entitled to severance pay. The employer has the burden of proving that the dismissal was justified. Employees dismissed without cause or indirectly are entitled to severance pay equal to 1 month of salary per year of service. Severance must be paid proportionally when the employee works for a part of a year. Employees are not eligible for a severance payment if dismissed during a probationary period.
