Colombia boasts a thriving economy based primarily on agriculture, mining, oil, and manufacturing. Over the years, the country has become a hotspot for international businesses, offering exciting opportunities for global entrepreneurs and companies. 

If you wish to hire in Colombia, you must know some of the many regulation nuances guiding the employee-employer relationship, especially now with the advent of remote work. To make your job easier, this article will explore the critical aspects of contract employment law in Colombia.

Contractual Agreements

Article 23 of the Substantive Labor Code mentions the three fundamental aspects of an employment contract in Columbia:

• Details regarding the activity of the employee
• The compensation or salary for the work
• The continued dependence of the worker on the employer, where the employer's authority persists throughout the contract, dictating work details and imposing rules

Due to the high amount of data collected during the contracts, the Colombian Government has data protection laws and DPAs that safeguard the privacy of Colombian citizens during employment.

Types of Employment Contracts in Colombia

As per the labor laws of Colombia, there are two primary types of employment contracts in Colombia:

Indefinite term employment contract

• This type of contract is open-ended and has no specified end date. 

Fixed-term employment contracts

• It contains a specific duration agreed upon by both parties. 
• This type of contract is mainly used for temporary or project-based work. 

Obligations and rights for both parties

• In Colombia, employment rules and regulations are mandatory for employees and employers. This considers everything from providing a safe workplace, paying wages and benefits, complying with leave laws, and providing social security contributions.

Working Hours and Overtime

The employment laws in Colombia lay down specific regulations related to the standard working hours and permissible overtime. Those include

Regular working hours

Overtime regulations and compensation

Overtime is generally compensated at a rate higher than the regular wage. The specific rate may vary based on the circumstances, but it typically includes,

Minimum Wage and Compensation

Let’s look at some key points highlighted in labor laws in Colombia concerning minimum wage requirements and compensation. 

The minimum wage rate 

• The minimum wage in Colombia is 1,160,000.00 COP (Colombian Peso). 

Factors affecting wage determination 

Wage determination is a complex and multifaceted process that takes into account various factors. Those include

• Inflation

Inflation rates play a significant role in wage determination. Adjustments to wages may be made to counter the effects of inflation to maintain the purchasing power of workers. 

• Cost of living

Wages may be adjusted based on the varying costs of necessities such as housing, food, and transportation. 

• Economic growth

The country's overall economic growth can influence wage decisions. In periods of economic expansion, there may be room for higher wage increases.

Employee Benefits and Social Security

Let’s take a closer look at the employee benefits and social security regulations covered under the employment laws in Colombia.

Statutory benefits

Public Health Insurance

• Colombian labor law makes public health insurance mandatory for every employee. It is handled by the universal health care system in Colombia, the Sistema General de Seguridad Social en Salud (SGSSS).

13th-month pay

• Also known as ‘Prima de Servicios’, Colombia has a mandatory 13th-month pay policy.
• It is equivalent to one month’s salary and is generally paid by the employers in two installments at the end of January and the first 20 days of December.

Social Security contributions and requirements

Per labor laws in Colombia, every employee, except some foreign workers who opt for voluntary affiliation, must enroll in the comprehensive social security system. This includes provisions for pensions, healthcare, and coverage for professional risks. 

Monthly contributions are calculated based on the employee's salary. 

Vacations and Paid Time Off

Let’s look at the country's different public holidays and paid leaves, as mandated by the employment laws in Colombia.

Annual leave entitlement

• Employers must provide 15 days of annual paid leave to each employee. Rest are counted as unpaid leaves.

Public holidays and special leaves

Apart from the public holidays and the mandated annual leaves, all Colombian employees are entitled to certain special leaves:

Sick leave

• Employees in Colombia are entitled to 180 days of sick leave. To avail of the same, they must have verification from the Colombian social security authority. 
• Employees receive 2/3rd of their salary for the first 90 days. Following this, the salary drops to 50%, which employees must recover from the social security system.
• However, the employer must pay 100% of the salary if the injury or illness is related to or caused by the employment.

Maternity leave

•  Female employees in Colombia receive 18 weeks of paid maternity leave, divided into one week before the due date and 17 weeks post-delivery. 

Paternity leave

• The labor law in Colombia mandates 14 days of fully paid paternity leave.
• Employers have to pay salaries at a regular rate and are then reimbursed by Social Security (EPS).

Adoption leave

• Employees are authorized to six weeks of paid adoption leave in Colombia.

Compassionate leave

• In the event of the death of family members, partners, or in-laws, employees receive five days of paid compassionate leave.

Voting leave

• A half-day of voting leave is granted to every employee in Colombia, provided they have the necessary voting certification.

Termination and Severance

Termination of employment is a complex process that needs to be handled on a case-to-case basis. Mentioned below are some of the possible scenarios of termination in Colombia.

Probation

• For indefinite contracts, the probation period in Colombia is capped at two months. 
• For fixed-term contracts, the probation period is limited to the lesser of 1/5th the contract duration. However, labor laws in Colombia decree that this duration shouldn’t be more than two months.
• The Colombian labor law allows for termination without cause or notice by either party during Probation. However, the terminating party is liable for damages incurred by the other party.

Grounds for termination

Termination during probation period

Terminating an employee during the probationary period is a common practice for employers to assess an individual's suitability for the role. Here are some of the common grounds for termination during the probationary period:

• Poor performance
• Bad Behavior
• Role misfit
• Persistent absence from work

Termination due to poor performance

Employers are required to provide written documentation of concerns to the employee. Some of the common grounds for termination due to poor performance include:

• Unsatisfactory performance
• Absence from work due to illness or absconding

Termination without cause

• No prior notice is mandated in instances of misconduct or termination without cause, allowing employers to terminate contracts immediately.

Termination with cause

Common grounds for termination with cause are:

• Indefinite illness
• Absconding
• Breach of employment contract
• Working under influence 
• Gross misconduct

Termination due to business redundancy

Common grounds for termination due to business redundancy include:

• Cash crunch
• Restructuring
• Shutting down operations in the regions
• Economic reasons

Notice period & severance pay

Discrimination and Equal Opportunity

In Colombia, laws and regulations are in place to prohibit discrimination and promote equal opportunities in the workplace. Employers must comply with these rules to operate in the country.

Prohibitions against workplace discrimination

• Law 1010 of 2006 prohibits differential treatment in the workplace based on race, family orientation, gender, political viewpoints, and religious beliefs, among other subjective aspects.

Health and Safety Regulations 

The employment laws in Colombia direct companies to safeguard employee health and safety. In this regard, Law 1562 of 2012, also known as the Prevention of Industrial Hazards and Health & Safety at Work, aims to guarantee the well-being and safety of employees, shielding them from the repercussions of occupational diseases or accidents in the workplace. Its core focus is promoting and upholding workplace safety and health standards.

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FAQs

Q1: Does Colombia have labor laws?

Ans: Yes, Colombia has comprehensive labor laws that govern various aspects of employment relationships, ensuring employers' and employees' rights and responsibilities. The Substantive Labor Code of Colombia is the centerpiece of legislation regulating labor relations in the country.

Q2: What are the different types of employment in Colombia?

Ans: As per the contract employment law in Colombia, employment can be divided into two types. They are, namely, indefinite-term contracts and definite or fixed-term contracts.

Q3: What are the leave laws in Colombia?

Ans: In Colombia, leave laws cover various types of leaves, such as vacation, public holidays, maternity and paternity leave, and sick leave, among others. The regulations are outlined in Colombia's labor laws, which establish employers' and employees' rights and obligations regarding leave.