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Hiring a Workforce

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Labor Regulations

Labor regulation in Colombia complies with the guidelines set out by the International Labor Organization (ILO). The following information contains the most important aspects of Colombian regulations that must be taken into account when hiring personnel.

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  • Types of Labor Contracts:

There are different types of contracts used by companies to hire personnel:

- Indefinite term contracts: This is the most used type of contract; a labor contract shall have indefinite duration, unless agreed otherwise It may be verbal or written.
- Fixed term contracts: these must always be stipulated in writing and cannot be longer than 3 years.
-Contracts for duration of the works: these must always be stipulated in writing, labor link lasts until the works are finished.
- Occasional, Casual or Temporary: This type of contract is celebrated for tasks that are not part of the regular activities of a company and its term is of less than one month.

  • Wages

In Colombia, there is a Minimum Monthly Legal Wage (or SMLMV for its acronym in Spanish) agreed annually between the government, employers unions and labor unions or set by a governmental decree. For the year 2019, this monthly wage is equivalent to COP 828.116or approximately USD 276(USD 1 = COP 3,000).

  • Work Day

In Colombia, the ordinary work day comprises of a maximum of 8 hours a day and up to 48 hours a week, which can be distributed from Monday to Friday or from Monday to Saturday. The day shift runs from 6:00 a.m. to 9:00 p.m. and the night shift from 9:00 p.m. to 6:00 a.m.

For the night shift, companies must pay a 35% surcharge on top of the day-shift hourly wage. For overtime, the following rule applies: for the day shift, a 25% surcharge must be paid per extra hour; if there is a night shift, a 75% surcharge must be paid per extra hour on top of the day shift hourly wage. (In either case, it must be taken into consideration that overtime must not exceed 2 hours per day or a total 12 hours per week). Overtime is only applicable to positions not belonging to management, directors or high-ranking officials.

  • Other payments

Finally, when hiring workers, the company must take into accountother labor-related costs generated:

- Contributions to the Social Security System (pensions, healthcare, and work-related risks).
- Benefits including but not limited to severance payment assistance, interests on severance payments, annual bonus (1 month per every year worked), contribution for transportation, work clothes and footwear, and family benefits.
- State tax contributions (payments to the Family Welfare Institute Instituto de Bienestar Familiar, the National Learning Service Servicio Nacional de Aprendizaje, and the Family Compensation Fund Caja de Compensacion Familiar).
- For employees earning up to 10 monthly legal minimum wages (i.e. USD 2.760 at the exchange rate of COP 3,000 per USD 1), there is an exemption from payments to the SENA, ICBF and social security in health.

For more information about the Colombian labor regime, please refer to Chapter 5 of the Legal Guide to Doing Business in Colombia, which can be found below.

Labor.pdf 265.41 KB

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