Colombia plays an important role in the Latin American region in that it often acts as a gateway for international companies to expand into other Central and South American states. Here are some guidelines to help you understand this pivotal country’s employment rules and regulations better:
Social security system
Colombia has a mandatory social security system, which provides healthcare, retirement, disability, death and labour risk-related benefits. Employers are obliged to affiliate their employees to it and both are required to make contributions, which must be paid within prescribed government deadlines. These contributions are:
o For employers, up to 36.5% of salary, including payroll taxes;
o For staff members, up to 10% of their salary.
Hiring/retrenchment issues
Employment contracts may be verbal or written as well as of fixed or indefinite duration. Employers can also enter into collective bargaining agreements with employees. On taking up employment, employers may require staff members to serve a trial period, not exceeding two months.
Either the employer or employee can terminate the employment contract without notice. If the employer does so, the effects of termination vary depending on the contract type and whether they have valid justification.
Employees dismissed without lawful cause are entitled to severance payment, the amount of which varies depending on their salary and length of service. Staff members earning a salary that is less than 10 legal monthly minimum wages are entitled to:
a) 30 days-worth of salary if they have undertaken less than a year of service;
b) A severance payment of 30 days-worth of salary for the first year and 20 days-worth of salary for each consequent year if they have provided more than one year of service.
Employees earning salaries that are equal to, or higher than, 10 legal monthly minimum wages are entitled to:
a) 20 days-worth of salary if they have given less than a year’s service;
b) A severance payment of 20 days-worth of salary for the first year of service, and 15 days for consequent years if they have provided more than one year of continuous service.
Employees working under a definite fixed-term contract have the right to receive compensation based on the time that is left to run on it, or the time determined on the contract, as long as the severance payment does not cover less than 15 days.
Foreign workers
Foreign nationals are required to hold a valid work visa to live and work in Colombia. People with technical, professional or academic qualifications and experience, who are perceived to contribute to helping develop the country’s economic, scientific, cultural or educational activities, are preferred.
In general, foreigners must comply with the same HR and payroll regulations as Colombian workers.
Work permits
Employers must consider Resolution 6045, which was issued in 2017 by the Ministry of Foreign Affairs of Colombia, in order to determine which visa or permit they should obtain for new workers. This Resolution classifies visa types into three main categories:
1. Visitor visa or “V” type visas;
2. Migrant visas or “M” type visas;
3. Resident visas or “R” type visas.
The “M” visa authorises foreign workers to take up permanent employment with an individual who is either naturalised or authorised to live and work in the country.
“V” visas enable foreign nationals to work under a temporary employment contract.
Paid leave
Employees are entitled to receive paid annual leave of 15 days each year. Staff members can also claim 18 weeks of paid maternity leave, eight days of paid paternity leave and five days of paid bereavement leave.
Payroll cycles
Employees are paid on either a monthly or biweekly basis. The monthly minimum wage is COP$737.717 (US$246) and will be in effect from 1 January 2017 until 31 December 2017.
• Night work is payable at a rate of at least 35% more than normal wage levels;
• Overtime during daytime working hours is paid at a rate of at least 25% above normal salary levels, while overtime at night is at least 75% above the norm;
• Overtime hours cannot exceed 12 hours per week or two hours per day;
• If employees work on a Sunday or during a public holiday, they are entitled to extra pay of 75% above normal rates as compensation.
HR legislation
• Employment in Colombia is governed primarily by the Labour Code, which applies to all employers and employees regardless of their nationality. It governs terms and conditions of employment such as the form and duration of employment contracts, probationary periods, wages, working hours, holidays, termination of employment and collective bargaining.
Mauricio Bermudez, HR planning manager at TMF Colombia, has more than 20 years’ experience in finance, payroll and corporate services, having worked for national and multinational companies such as Ernst & Young, Coopers & Lybrand and Grupo Devinil Ltda. He has a degree in Industrial Engineering and specialised in labour law, social security, private financing and marketing.
Colombia plays an important role in the Latin American region in that it often acts as a gateway for international companies to expand into other Central and South American states. Here are some guidelines to help you understand this pivotal country’s employment rules and regulations better:
Social security system
Colombia has a mandatory social security system, which provides healthcare, retirement, disability, death and labour risk-related benefits. Employers are obliged to affiliate their employees to it and both are required to make contributions, which must be paid within prescribed government deadlines. These contributions are:
o For employers, up to 36.5% of salary, including payroll taxes;
o For staff members, up to 10% of their salary.
Hiring/retrenchment issues
Employment contracts may be verbal or written as well as of fixed or indefinite duration. Employers can also enter into collective bargaining agreements with employees. On taking up employment, employers may require staff members to serve a trial period, not exceeding two months.
Either the employer or employee can terminate the employment contract without notice. If the employer does so, the effects of termination vary depending on the contract type and whether they have valid justification.
Employees dismissed without lawful cause are entitled to severance payment, the amount of which varies depending on their salary and length of service. Staff members earning a salary that is less than 10 legal monthly minimum wages are entitled to:
a) 30 days-worth of salary if they have undertaken less than a year of service;
b) A severance payment of 30 days-worth of salary for the first year and 20 days-worth of salary for each consequent year if they have provided more than one year of service.
Employees earning salaries that are equal to, or higher than, 10 legal monthly minimum wages are entitled to:
a) 20 days-worth of salary if they have given less than a year’s service;
b) A severance payment of 20 days-worth of salary for the first year of service, and 15 days for consequent years if they have provided more than one year of continuous service.
Employees working under a definite fixed-term contract have the right to receive compensation based on the time that is left to run on it, or the time determined on the contract, as long as the severance payment does not cover less than 15 days.
Foreign workers
Foreign nationals are required to hold a valid work visa to live and work in Colombia. People with technical, professional or academic qualifications and experience, who are perceived to contribute to helping develop the country’s economic, scientific, cultural or educational activities, are preferred.
In general, foreigners must comply with the same HR and payroll regulations as Colombian workers.
Work permits
Employers must consider Resolution 6045, which was issued in 2017 by the Ministry of Foreign Affairs of Colombia, in order to determine which visa or permit they should obtain for new workers. This Resolution classifies visa types into three main categories:
1. Visitor visa or “V” type visas;
2. Migrant visas or “M” type visas;
3. Resident visas or “R” type visas.
The “M” visa authorises foreign workers to take up permanent employment with an individual who is either naturalised or authorised to live and work in the country.
“V” visas enable foreign nationals to work under a temporary employment contract.
Paid leave
Employees are entitled to receive paid annual leave of 15 days each year. Staff members can also claim 18 weeks of paid maternity leave, eight days of paid paternity leave and five days of paid bereavement leave.
Payroll cycles
Employees are paid on either a monthly or biweekly basis. The monthly minimum wage is COP$737.717 (US$246) and will be in effect from 1 January 2017 until 31 December 2017.
• Night work is payable at a rate of at least 35% more than normal wage levels;
• Overtime during daytime working hours is paid at a rate of at least 25% above normal salary levels, while overtime at night is at least 75% above the norm;
• Overtime hours cannot exceed 12 hours per week or two hours per day;
• If employees work on a Sunday or during a public holiday, they are entitled to extra pay of 75% above normal rates as compensation.
HR legislation
• Employment in Colombia is governed primarily by the Labour Code, which applies to all employers and employees regardless of their nationality. It governs terms and conditions of employment such as the form and duration of employment contracts, probationary periods, wages, working hours, holidays, termination of employment and collective bargaining.
Mauricio Bermudez, HR planning manager at TMF Colombia, has more than 20 years’ experience in finance, payroll and corporate services, having worked for national and multinational companies such as Ernst & Young, Coopers & Lybrand and Grupo Devinil Ltda. He has a degree in Industrial Engineering and specialised in labour law, social security, private financing and marketing.
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