Labor aspects to take into account in Colombia

For companies that operate in Colombia or plan to expand to the country, it is essential to know and comply with the labor aspects that govern the Colombian labor market. The legal framework of labor in Colombia is designed to protect the duties and rights of employees and ensure compliance with business obligations. Therefore, it is essential to take into consideration how all these labor aspects are applied in Colombia to ensure effective and fair business management.

Labor legislation and employment contract in Colombia

Labor legislation in Colombia is governed by the Substantive Labor Code, which establishes the rights and duties of employers and employees. This is the branch of law that covers areas such as employment contracts, working hours, compensation, minimum wage, breaks, vacations, social security and dismissal procedures. Knowing the provisions of the code is essential to operate in accordance with the law and avoid penalties.

1. Type of employment contract

Labor contracts in Colombia can be of an indefinite term, a fixed term or for work or labor and are the document in which it is established the type of relationship that will exist between workers and employers. Each type of contract has its own characteristics and regulations, so it is important to choose the right one according to the needs of the company and the employee. In total, four types of employment contract can be recognized: 

• Permanent contract: It does not have a predefined end date and is the most stable way to agree on the contract.
• Fixed term contract: Features a specific contract duration and can be renewed, but termination cannot exceed three years.
• Contract for work or labor: Used for jobs whose duration is limited to a specific task or project.
• Contract for the provision of services: It is used when a natural person is hired to perform specific services, in most cases they can be supplementary work. 

Working day and breaks

According to labor law in Colombia, which is shaped by the provisions of the 1991 Constitution, the standard working day is 48 hours per week, with a maximum of 8 working hours per day. However, in 2021 a law was approved establishing a reduction to 42 hours per week. which will be done gradually, to reduce one or two hours per week per year. 

The law establishes that workers They are entitled to one day of rest for every six days worked, and any work on days that are outside the normal working day is considered overtime, which must be compensated according to the additional rates stipulated by law.

2. Vacations and licenses

Employees in Colombia They must receive 15 business days of vacation for each year of work. In addition to vacation, there are other mandatory leaves, such as maternity and paternity leave, and sick leave, which are covered by the social security system. These are mandatory rest days that cannot be denied to employees, because they are included in their workers’ rights and obligations. 

Social security system

In Colombia, according to workers’ rights, they are obliged to carry out the affiliation of its employees in the social security system, which includes health at work, pensions and measures to prevent occupational risks. Making contributions to the security system is a shared task between the employer and the employee, and is the responsibility of the employer ensure all contributions are made on time to avoid penalties.

3. Contributions to social security

The social security and health system in Colombia has three main components and these are:

• Health: The employer contributes 8.5% of the monthly salary, while the employee contributes 4%.
• Pension: The employer contributes 12% and the employee 4% of the monthly salary.
• Occupational risks: The employer is responsible for paying this contribution, the percentage of which varies depending on the level of risk of the company’s economic activity.

Layoffs and severance pay

Dismissals in Colombia can be with or without just cause. If the dismissal is unjustified, the employer is obliged to pay compensation, which varies depending on the type of contract and the time the employee has worked in the company. Furthermore, upon termination of the employment relationship, the employer must pay a settlement, which includes outstanding salary, social benefits, untaken vacations and service premium. All this with the intention of protecting workers in a fair and equitable way. 

4. Service premium and severance pay

In Colombian law, the service premium is established as an additional payment that corresponds to 30 days of salary per year worked, paid in two parts: one in June and the other in December. Severance benefits, for their part, are savings that the employer must deposit annually in a fund, and the employee can use them in case of unemployment, to purchase housing or for other workers’ needs.

Remote work according to labor legislation in Colombia

Finally, it should be noted that within the legal framework the possibility of employees working remotely is also contemplated. That is, through an internet connection, but without having to physically go to a work environment, so they can complete their workday from home or any other place of their choice. 

5. Possibility of working online

If Colombian workers want to work remotely, they can do so, but there are some exceptions and special cases in which they will have to go to the company in person and those are:

• When it is necessary to install or update the office tools and business programs that the employee will use on a daily basis. 
• When it is necessary to verify that the work tools meet the essential requirements to complete remote work days. 
• In the event that workers do not fulfill their obligations virtually. 

The importance of specialized advice on labor rights

Given the complexity of labor regulations in Colombia, It is crucial to have expert support that help you properly manage your obligations as an employer. In UR Global, we offer International Consulting and International Tax Consulting to ensure that your company complies with all regulations and avoids sanctions, while optimizing your business management.

Conclusion

Understanding and complying with labor aspects in Colombia is essential to ensure successful business operation and avoid legal problems. From the correct preparation of employment contracts to the management of social security and settlements, every detail counts. Have an expert team in Tax Optimization It can make a difference for your company when operating in the country.